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Continuous Car Insurance – Why It’s Important!

Written by Todd Clay. Posted in Research Last Updated: 10/21/2011

Having continuous car insurance on your vehicle will save you more money than you would if you were to cancel your current policy to save on the premium.

A Swinging Pendulum and Continuous Car Insurance Are both Best When They Don't Stop

Continuous car insurance works best for you financially if you never stop it.

Even when times are tough financially, dropping your car insurance is one of the worst things that you could possibly do to save yourself money. Car insurance, at least liability insurance, is required to be in place if you are going to drive your vehicle.

If you are caught without having insurance on your vehicle, not only will you be paying for a ticket, you will now be paying more for your insurance than you did before cancelling your policy. In the end you will not have saved yourself much money at all by cancelling your insurance and not keeping continuous car insurance.

High Risk Insurance for Those Without Continuous Car Insurance

If you are caught by a police officer or you have an accident and you have no continuous car insurance in place, you are both legally and financially in trouble. Setting aside the fact that you will have to pay the ticket for not having insurance coverage, any money that you thought that you would save by cancelling your policy won’t even be close to what you will now have to pay out of your own pocket.

First, if you get into an accident with no insurance and it is your fault, you are personally responsible for paying for the damages and medical bills for the other party. This can either happen with you being taken to small claims court by the other party or through subrogation through the other party’s insurance company. Subrogation is when the insurance company goes after the responsible party of a car accident to get back the money that they paid out for their insured’s damages and even their insured’s deductible.

On top of all that, you will then most likely have to carry SR-22 insurance which adds a surcharge on your now new insurance policy that you went out and got after the incident. Thought we were done there? Not even close. You will also be placed in high risk insurance which is significantly more expensive than in the standard market that you cancelled your continuous car insurance from in the first place.

The State of California Requires Continuous Car Insurance

If you live in the state of California, the state tracks your insurance coverage through a database that all insurance companies that sell in that state have to report to. If you fail to keep continuous insurance on your vehicle you are required to stop driving the vehicle and report that it is no being driven. If you do not keep continuous car insurance or at least replace your continuous car insurance with a new insurance policy within 45 days, the state will suspend your vehicle registration and you will face financial penalties.

If you don’t live in California, your state is not far behind – if not already there.

Lose Longevity Discount

One of the discounts that people can take advantage of to lower their insurance premium is a longevity discount. This discount is basically a reward to you for keeping continuous insurance with the same company. If you cancel your continuous car insurance you will lose this discount even if you return to the same company at a later time.

Insurance: What Exactly Does It Mean?

Written by Michele Wilmonen. Posted in Definitions Last Updated: 05/16/2011

Defining insurance, understanding the concept of indemnity and covered perils and how it relates to auto insurance.

Insurance Files

Insurance puts you back to where you were before a covered peril.

We all know what people mean when they are talking about insurance, but how many people can quote a solid definition?

The Webster’s dictionary description of insurance is: “Coverage by contract whereby one party undertakes to indemnify or guarantee another against loss by a specified contingency or peril”.  Do you understand now? If not, don’t worry we will explain further.

Indemnify After A Loss

As the definition says above, insurance is a contract to indemnify. The word indemnify is not a word that is used in everyday language, but it’s an important word here. Indemnify means to return someone to the condition that they were in prior to an incident happening.

As an example, if your auto insurance company were to indemnify you after you had an accident where you vehicle was a total loss, they would pay you for the worth of the vehicle prior to the accident. A lot of people get upset that their insurance company doesn’t pay them enough for their vehicle and believe they are actually in a worse place as they now have to go and get a new vehicle.

But remember this, your contract with your insurance company is to put you back into the very same place that you were prior to the accident, which means that they give you what the car is worth so that you can buy a replacement car that is similar.  If they were to pay you more so that you can get a better or a newer car, you are no longer being put back to where you were you as you are actually being put in a better position than you were in prior to the accident and this is not indemnification.

Specific Contingency or Peril

A specific contingency or peril is simply what you are purchasing the insurance policy to protect you against. If you purchase a commercial auto policy, you are purchasing protection for your vehicles that are used for your business. If you purchase health insurance, you are purchasing protection from high medical bills that you may have due to health issues. The policy that you purchase is specific to what you need protection for.

At the same time because this is specific, you cannot use one insurance policy to cover every single thing that you need protection for. A health insurance policy cannot protect your home from a fire and your commercial auto policy cannot protect your personal motorcycle in the case of an accident.

The insurance policy that you purchase also has specific perils that it does and does not cover. A peril is something bad that can happen and cause damage to the item that you are insuring. If you are concerned about a specific peril, you need to consult your insurance agent to make sure that you have coverage. If your basic policy does not provide the coverage that you need, they may be able to suggest additional coverage that you can add or a different insurance company that offers the coverage.

When to Stop Paying Collision

Written by Todd Clay. Posted in Research Last Updated: 10/21/2011

Collision insurance is there to protect you from having to pay for damages that may happen to your vehicle, but it is not required to be able to drive and may not be needed in some cases.

A damaged vehicle needing collision insurance

If you stop paying your collision coverage, at-fault damage like this will not be covered.

Unlike liability coverage, collision insurance is not required to be in place for you to be able to drive. There are situations that you have to carry collision insurance on your vehicle, but this is not something that is required by your state government.

For those situations that you do not have to have it on your vehicle and you are looking to save some money in your budget this may be when to stop paying collision insurance on your car.

Stop Paying Collision Insurnace if You Can’t Afford It

Some people live on a very tight budget and have to cut corners where ever they can. If you need to cut some expenses, dropping your collision insurance from your insurance policy will save you money and you will still be able to drive your vehicle. However, you have to weigh the good with the bad in this situation.

Dropping collision insurance will do you good in saving you money, but you may be in a bad place financially if you cannot afford to fix any damages to your car from out of your own pocket. Because you dropped your collision insurance, your insurance company is no longer going to be stepping in to pay for the cost of damages above and beyond your deductible.

Stop Paying Collision Insurance With No Lienholder

The one situation in which you will be required to carry collision insurance on your vehicle is if you have a lienholder on it. A lienholder is the business that gave you the money to buy your vehicle and who you are now making monthly car payments to. They require that you carry collision insurance on your vehicle because until you pay off your car loan, the vehicle actually belongs to them and they want to make sure that it is protected from damages.

Once you have paid off your car loan and your lienholder sends you the title of the car, you are no longer required to carry collision insurance on this vehicle. If you wish to remove this coverage to save money on your premium you are now free to do so.

Stop Paying Collision Insurance when Your Vehicle is Old

If your vehicle is in pretty bad shape or it is just old, it may not be worth your money to even worry about putting collision insurance on it. If you were to get into an accident and the vehicle is a total loss, the insurance company is only going to pay up to a certain percentage of the vehicles worth.

If you have paid out more in insurance premium for the collision insurance than what the insurance company is going to pay out, you are better off just putting that money in a bank account and paying for any damages yourself. At least with having the money that you would have paid for collision insurance with in a bank account you can earn some interest off of the money.

Should You Trust Car Insurance Reviews?

Written by Michele Wilmonen. Posted in Research Last Updated: 05/16/2011

An unbiased car insurance review is a great way to get information on other people’s experience with an insurance company so that you can avoid bad companies and find a good company to go with.

Giving a thumbs up or down to insurance companies through reviews

A good car insurance review will give you more information than any company advertisement.

In the world of business, word of mouth advertising can be just as important as any other form of advertising. Word of mouth advertising is when a client of a business tells people about their experience with that business.

Car insurance reviews are a form of word of mouth advertising for car insurance companies as they are not paid for by the insurance company and are written by people that have had experience with the company.

While this is a great way to see a company in a more realistic light than from the advertising they put out about themselves, car insurance reviews are not without their downfalls and should you trust car insurance reviews?

Car Insurance Reviews Should Be Unbiased

The most important thing that you need to look for is that a review is unbiased. If the review has nothing but good things to say about a company and no suggestions that they could improve on anything or any negative experiences, you may want to question the source of the review.

A good review has a “person looking into a box” type of feeling about it. The person writing the review should be able to see the company as a whole and how each part works together for the insured.

Watch Out for Very Negative Car Insurance Reviews

On the other side of a biased review are those that are extremely negative. If the review has nothing good to say about an insurance company this is not a review to form an opinion of the insurance company from.  A review that is very negative could very well have been written by a person that has had a very unpleasant experience with this company or it could be a former, disgruntled employee.

Either way you are not getting a good idea of how the company works.

Who is Sponsoring the Car Insurance Review?

Take a look around the site that is hosting the insurance company review that you are reading. Is there a company that is listed as sponsoring these reviews and is it the same company that you just read a review about? If that same company is sponsoring the review you can almost be sure that this site is going to present that company in the best light possible.

Now keep in mind that this is only if you see that the company is directly sponsoring the review or the site as a whole. This is not the case if an advertisement for the company is visible on the same page through Google or on a banner on the top of the site’s page. The person that runs the site sometimes has no control over what shows up as advertisements on their page if they have agreed to sell part of the space on their site for rotating advertising to a third party.

Read Multiple Car Insurance Reviews

Never, ever base your whole opinion of an insurance company on a single review. While the review that you read may have a great unbiased view of the company and may have covered all of the information that you need, it is still just one person’s view of the company. To make a solid decision about an insurance company, seek out multiple reviews and notice if there is any pattern in each of the reviews. For example, is the company listed as having rude claims adjusters in all of the reviews or maybe they have a quick pay out time on their claims.

If you are able to see the same information in multiple reviews, this is the information that is best to base your opinion on. For more reviews on car insurance companies, checkout these reviews:

Auto Insurance Customer Reviews

Insurance Commissioner: Helping Insurance Work In Your State

Written by Michele Wilmonen. Posted in Definitions Last Updated: 05/16/2011

The Insurance Commissioner – or Director – for your state handles every insurance complaint, insurance license application and rate request that sets your insurance premiums.

The Insurance Commissioner is found in the state capital

Your state Insurance Commissioner is located in your state capital.

When we hear the word commissioner, the first two associations that come to mind for most is a police commissioner and Commissioner Gordon from the series Batman®. The majority of us have no clue that there is another commissioner that affects our lives almost daily and that is our state’s Insurance Commissioner.

The decisions that are made by your Insurance Commissioner’s office have an effect on every insurance policy that you have purchased to protect your belongings and your life.

Who Is the Insurance Commissioner?

The Insurance Commissioner, also known in some states as the Insurance Director, is the head of all things insurance in your state. The actual commissioner is just the head of the department and oversees the operations, they are not the person that you would see directly if you had to get an insurance license or file a complaint.

The Insurance Commissioner’s office works the same as any other government department, you have the head of the department as a whole (Insurance Commissioner or Director), then you have someone that is in charge of each smaller department (life insurance, personal insurance, ect) and then you have all the employees below them that do most of the work.

So when you are advised to file a complaint or ask a question about an insurance agent in your area with your Insurance Commissioner, you will actually be contacting the Insurance Commissioner’s office and an employee that works in that office will be helping you.

Where is the Insurance Commissioner located?

Insurance Commissioners are located in every state and are usually located in your state’s capital.  If you wish to find out information about your insurance company or to file a complaint you would contact the Insurance Commissioner that is in your state, you do not have to find out what state the insurance company is based out of. This is because your insurance company had to be licensed to do business in your state and is subject to your state’s insurance rules and regulations, which are most likely different from the state that the insurance company is based out of.

To find out who to contact in your state the National Association of Insurance Commissioners has a map on their site that will not only tell you who your Insurance Commissioner is, but also has a link that will take you straight to your state’s insurance website.

What does the Insurance Commissioner Do?

The office of the Insurance Commissioner (or Insurance Director) handles everything that you can possibly imagine that is connected to insurance. This means complaints about insurance companies that write in their states, complaints about rates, they approve or deny an insurance companies request to raise or set insurance rates in their state, they license companies and agents, offer continuing education and they enforce and create the insurance rules and regulations for the state.  They can also answer questions that you may have about the reliability of specific agents or insurance companies that write in your state.

The Insurance Commissioner is not just in charge of auto insurance either, they are the authority for all fields of insurance; auto, home, commercial and health just to name a few.

®Batman is the property of DC Comics.

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Car Insurance Guidebook Unravels the Car Insurance Mystery

Unless you work in the car insurance industry, the topic is probably a mystery to you. The words deductible, comprehensive, collision, liability, premium, loss of use and bodily injury are all gibberish when they reach your ears.

Unfortunately, insurance is something that you are required to have by law if you want to drive. Because of how confusing it is many people go around in almost an insurance daze while they get car insurance quotes from the auto insurance companies that they have heard of. In reality, they are completely lost as to what they are actually buying.

Instead of looking at what each insurance company offers in the terms of protection for both themselves and their car, they are instead looking for cheap car insurance. Finding the cheapest car insurance coverage makes having to buy the required product all that much less painful, but misses the whole point of having insurance.

Learning about insurance through your insurance agent or websites like Car Insurance Guidebook will give you the upper hand when you looking for car insurance. You can take your knowledge and not only find the best price for insurance, you can use it to find really great insurance to protect you and your assets. Then you aren’t stuck settling for just average car insurance that can hurt you financially if you ever need it because there isn’t enough protection.

For example, when looking for insurance the car insurance rates are just the first of many factors that need to be taken into account when you are shopping around for car insurance. You also need to take into account the type of vehicle that you are driving. Many people don’t know this.

Are you driving around a vehicle that is a new sedan and can be protected under any blanket insurance policy? Or do you have an old car that you fixed up that needs special protection and could be better covered under classic car insurance?

Don’t just assume that when you compare car insurance that it will be a one-size-fits-all policy. This is where the insurance knowledge will come in handy; you will know what you need to protect yourself and your vehicle.

You will understand what your insurance agent is talking about when they use insurance terms and you will actually be able to make an informed decision. This is much better for you instead of the “nod and smile” approach people take in their insurance agent’s office.

Also just like your life changes your insurance needs will change. This year you may just need to learn about the best deductible to have. Next year you may need to educate yourself on car insurance for young drivers. As the years pass, motorcycle insurance may be something you will need to know.

Many wise people say that you never stop learning, so take their advice and educate yourself on the insurance that you spend a lot of money on and can’t get away with not having.