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Inland Marine Insurance for Auto Accessories

Written by W. Lane Startin. Posted in Research Last Updated: 03/22/2011

Why you need inland marine insurance for aftermarket auto accessories, what inland marine insurance is, how it works, and how it applies to personal and commercial situations.

Anyone can get inland marine insurance for their car, no riverboat needed.

You just got a killer new car stereo with all the accessories. You have the woofers and tweeters. Everything is top of the line. Now you can terrorize your neighborhood with all the latest block rockin’ beats. Congratulations.

The down side is now your vehicle is a magnet for car stereo thieves. Is that new system covered by your auto insurance?

Um, probably not.

Items that are not factory installed and bolted down are typically not covered by standard boilerplate auto insurance. At this point you need inland marine insurance for auto accessories – at least your aftermarket accessories.

What is Inland Marine Insurance?

“Inland marine” is an old term for a very contemporary concept. The term dates to the 19th Century, when it was common to transport goods by rivers and canals. The insurance was originally designed to protect those goods, differentiating it from goods transported across oceans. It all has a very distinct Mark Twain feel to it, doesn’t it?

Today inland marine simply refers to insurance for miscellaneous items, no raft or riverboat required. It can apply to insurance for such things as jewelry, rare coins and artwork. However, in the realm of auto insurance it usually applies to aftermarket accessories such as car stereo equipment, burglar alarms, radar detectors and other non-factory installed items.

How Inland Marine Insurance Works

Inland marine insurance is usually a stated value form of insurance, meaning that it’s based on a given value for a particular item. For example, to insure an aftermarket accessory such as a car stereo one would typically provide a value for the item, a year of manufacture and a serial number. The procedure would be repeated for each separate item. These items would then be placed on the auto insurance policy as endorsements, or amendments, which provides the coverage.

You don’t necessarily need to get top quality stuff to qualify for inland marine insurance. The key test is whether the item is factory installed or not. If it isn’t, inland marine is probably required, even if we’re just talking about a modest car stereo.

Remember, depreciation is typically not covered in any auto insurance policy, therefore as the equipment ages the actual coverage level drops. Also bear in mind any new items purchased must be placed on the policy as well; their inclusion is not automatic.

As with full coverage insurance, a deductible can be assigned to inland marine insurance, but many choose a zero deductible. Inland marine coverage in and of itself is often quite reasonable, even with a zero deductible.

Inland Marine for Fleet Vehicles

Inland marine insurance is at least as important for commercial or fleet vehicles (see: fleet insurance) than it is for personal vehicles, if not more. In commercial settings inland marine insurance is used for tools and equipment and is therefore of vital importance for general contractors and others in construction-related industries. It can also be used for larger aftermarket commercial items such as generators and winches.

The application and coverage process is much the same for commercial inland marine as it is for personal inland marine. Exact requirements may vary from company to company, but for the most part stated value, serial number and date of manufacture are required.

Assigned Risk Auto Insurance

Written by W. Lane Startin. Posted in Definitions Last Updated: 02/05/2011

What assigned risk auto insurance is, who needs it, how to apply for it, and knowing when to leave it behind.

Too many incidents like this can result in assigned risk.

All drivers are legally required to have auto insurance, but not all drivers have perfect records. Insurance companies recognize this and work to manage their risk by catering to those with tickets, claims, points and other driving blemishes.

But what if you’re convicted of multiple DUIs in a short period of time, or if your driving record is otherwise so bad that you don’t qualify for insurance even with high risk companies? Can you still get coverage?

The answer is yes, but it’s not cheap.

What Is Assigned Risk Auto Insurance?

At the most general level, assigned risk insurance, also known as the “assigned risk pool,” is a state- or regionally-run program that allows people who can’t otherwise qualify to get legally required insurance due to get insurance. The assigned risk concept is most commonly associated with workers compensation and auto insurance. Obviously, we’re only going to talk about the auto insurance portion of it here.

Assigned risk auto insurance programs assign drivers to various insurance companies, which are then required to take them. There’s little choice in assigned risk. You’re compelled to take what’s offered, and the company assigned to your policy is required to underwrite it. Any company which refuses risks losing their privilege to do business in your state, therefore none do.

Although rates and coverages for these policies are dictated by the assigned risk pool rather than the insurance company, they are still very basic and quite expensive. SR-22 filings are included.

In recent years more and more high risk and non-standard auto insurance companies have entered the market. This means that only those with truly awful driving records need assigned risk auto insurance. Indeed many agents will tell you an assigned risk auto insurance application is quite rare indeed.

Applying for Assigned Risk Auto Insurance

Your shouldn’t apply for assigned risk auto insurance unless you absolutely have to. Go through the application process through several different standard and high risk companies first. There is absolutely no point in saddling yourself with assigned risk auto insurance if you can get coverage elsewhere.

Remember, different companies look at different things when considering driving record. Therefore, while one company may consider you too risky, another may not. Also keep in mind companies look at driving records for different periods of time. Some are only interested in three years of driving history, while others will want to know about five.

If you find you do need assigned risk auto insurance, fill out the application with your agent and pay the necessary premium. The agent will then send the application to the pool where it will get assigned. Chances are good your policy will wind up with a different company than the one your agent represents.

Assigned Risk Is NOT Forever

The nice thing about auto insurance driving records is that nothing is forever. If one truly turns the page on bad driving habits, even the worst driver can shed his or her horrendous driving record and become any insurance company’s preferred customer.

If you do have an assigned risk policy, meet with your agent every six months or so to see if you can get qualified with a high risk or even a standard company again. There’s no reason whatsoever to stay on assigned risk even one day longer than you have to.

Non-Owned Auto Insurance

Written by W. Lane Startin. Posted in Definitions Last Updated: 02/01/2011

What non-owned auto insurance is, who qualifies for it, and why it may be a good idea for some drivers to get it.

Sometimes it's a good idea to get auto insurance well before doing this.

What if we were to tell you it might be to your advantage to get auto insurance even if you don’t own a car? Now stay with us here, there’s a method to our madness in suggesting this. There are instances where buying auto insurance before owning a car is actually a good idea.

Many insurance companies fill this need with an auto insurance product called non-owned auto insurance. As the name implies, non-owned auto insurance is auto insurance for people who don’t own a car. It may sound contradictory, but it really isn’t.

What Exactly is Non-Owned Auto Insurance?

Non-owned auto insurance is a liability only auto insurance policy necessarily tied to a driver rather than a vehicle. Because there is no vehicle, there is no full coverage option. Also, only people who don’t own a vehicle are eligible to have non-owned auto insurance. If auto insurance company underwriters find any vehicle titled to you – even if it’s junked and on cinder blocks – your non-owned auto insurance application will likely be turned down flat.

You’ll have to insure that vehicle instead.

Since a non-owned policy follows you, it supersedes any liability coverage that would otherwise apply to the vehicle you may be driving, if any. In other words, if you drive your friend’s car, you don’t have to worry about whether your friend’s liability auto insurance coverage covers you. You have your own. Generally speaking non-owned coverage doesn’t apply to commercial auto insurance situations; that’s a whole other ball of wax entirely.

State liability limit requirements for non-owned auto insurance policies are exactly the same as they are for any other type of personal car insurance. Just because you don’t own a car doesn’t make you exempt from your state’s laws.

Sorry about that.

Good Uses For Non-Owned Auto Insurance

Giving friends and family peace of mind is all fine and good when borrowing their car. But why spend money on auto insurance when you don’t have a car, especially when many auto insurance policies cover third party drivers anyway?

Good question.

For some, that’s reason enough to stay away from non-owned auto insurance. High school and college age drivers who are still on their parent’s policy don’t need non-owned insurance either, even if they don’t have a car to call their own. However, if you’re thinking about buying a car soon and in need of establishing auto insurance history, non-owned auto insurance may be something to consider.

Most standard insurance companies require at least six continuous months of prior insurance history before they will write a policy on you, even if your prior driving history is immaculate. Until then, you have to carry a policy in a high risk or non-standard company. That means higher premiums.

However, since a non-owned policy is necessarily less expensive than a comparable traditional auto insurance policy (reason: there’s no car), it can be a cost-effective way to get the clock started on your auto insurance history sooner rather than later. It counts towards it.

Another reason to consider non-owned auto insurance is for situations such as job applications which require proof of auto insurance. It’s a quick, easy and relatively inexpensive way to fulfill that requirement without visiting a used car lot first.

Teen Drivers: What’s the Deal?!

Written by Todd Clay. Posted in Research Last Updated: 01/29/2011

Why teen drivers have higher insurance premiums, tracking their driving activity, teaching them responsibility, and getting a lower rate when you add them to your policy.

Teen Driver: Behind the Wheel

Ever seen a scarier picture than this?

Nothing makes a parent cringe like the thought of their teen drivers.  Them getting behind the wheel of a vehicle, you not being there to control the situation – not to mention the huge jump your insurance premiums are about to take.

But, there are things that parents can do to keep their teen driver responsible and while the insurance increase is inevitable there are ways to make it more manageable.

Higher Rates for Teens

Statistics have shown that teen drivers have a higher chance of getting into an accident than any other group of drivers.  This is due to the lack of experience that teens have behind the wheel and teen drivers are more likely to engage in risky driving behavior – often to show off for friends.

Car insurance for teens is high for a reason. Because the likelihood of an accident with a teen driver is higher, the insurance companies charge a much higher premium to try and offset the cost of an accident if one were to happen.  The more premium that they can collect, the less money they will lose if the teen is in an accident.

Tracking Teen Drivers

Some insurance companies have started programs that allow parents to track a teens driving behavior.  This tracking is made possible by a tracking device that is attached to a teen driver’s vehicle, it can even be placed in such a way that the teen doesn’t know that it is there.  This device can track where a teen driver goes, any erratic and dangerous driver, and also if they go over the speed limit.

If a parent agrees to use a tracking device, the insurance company may decrease the premiums of the teen driver.  Of course, the availability of these programs are different from one insurance company to another, as is the cost of the device and any discounts that the insurance company would allow.

Making Teen Drivers Responsible

Pro-active parenting can go a long way in making sure that teen drivers act responsibly.  First, if you are planning on buying your teen their own car to drive, make them pay for at least half of the vehicle themselves.  Having to work and get the money to pay for something out of their own pocket makes anyone more appreciative of the item that they had to pay for.

With a teen, they are less likely to engage in behavior that could possibly damage or even destroy the vehicle that they had to buy.  It brings a whole different attitude than if you paid for the car and they did nothing to earn it.  It also makes them more likely that they will form the mindset that you will just buy them another one if they destroy the first one.

Make your teen driver pay for their own insurance also.  There is no unwritten parenting law that states a parent must pay for the insurance on their teen driver.  If a teen wants to enjoy the privilege of driving, they are going to have to learn sooner or later that they also have to pay to be able to have this privilege.  This is something that they should learn while they are living with you and you can help them.

Teen Driver on the Cheaper Car

With insurance the insurance coverage follows the vehicle, but insurance rates are based on both the vehicle that is being insured and the drivers on the policy.  With some insurance companies, they base the insurance rates on each vehicle according to which driver is driving it the most.  If your insurance company bases their rates this way, make sure that your teen driver is listed as driving the oldest and least expensive of the vehicles that you own – assuming your company will go for that. Your premium should be lower than it would be if the teen driver was assigned to the most expensive vehicle.

Collector Car Insurance and Why You Need It

Written by Todd Clay. Posted in Definitions, Research Last Updated: 03/23/2011

What qualifies as a collector car, how is the car insured, and the restrictions that may apply.

Collector Car Insurance: Interior or 50's Car

Why you may need a special policy for your classic car.

What is collector car insurance?  It is an auto insurance policy that is specifically designed to cover cars that are not used for everyday transportation and are considered a collector item or a hobby – like classic car insurance.

Collector car insurance is specialty insurance and it is not offered by all companies.  If your current insurance company does not offer this specialty insurance, you may have to seek out coverage with a company that specializes in this type of policy.

What Qualifies as a Collector Car?

Muscle cars, antiques, imports, rare vehicles and street rods all make up part of the list of cars that can be considered for collector car insurance. The vehicles that people pay beaucoup bucks for because they are rare or that they spent years restoring are the most frequently insured vehicles under this type of policy.

Because the term ‘collector car’ can mean so many different things to different people, it is best to contact your insurance company for more information as to whether your car would qualify as a collector car.

Coverage for Collector Cars

Collector cars are not insured according to a certain value that is found in a book.  Collector cars can be rare and the value of the vehicle is generally not something that can be determined to be the same as every other vehicle that was made in the same time period, especially of that time period was a long time ago.

Instead collector car insurance policies use a stated value or an agreed value to determine the worth of the vehicle in the event of an accident.  Stated value is the value of the vehicle that is determined at the beginning of the policy minus any depreciation during the course of the policy up to the time of the accident.

Agreed value is the more popular method of insuring with collector car policies, at the beginning of the policy the person buying the policy and the insurance company “agree” on the value of the vehicle at the time the policy is written.  If there is a car accident and the agreed value was $53,000, then $53,000 is what is paid if the car is totaled, there is no depreciation with this type of value.

Regulating Collector Car Use

How you use your collector car is strictly regulated by the insurance company. This is why they are able to keep the lower rates that you pay for your collector car insurance down.  Driving restrictions include not being able to use the car for everyday use or commuting to work.   More specifically, your insurance company may place an annual mileage limit on your vehicle, usually around 2500 miles a year.

How you store your collector car is also important. You must keep it in an enclosed garage or storage facility that has a lock on it to keep it safe. You also cannot leave it out on the street or in parking lots for long periods of time when you drive it around.  This is to protect the car from theft or vandalism.

In addition, to make sure that the insurance company has a lower chance of having to pay out on a claim they allow only good drivers to start collector car policies with them.  The driver of the collector car has to have been driving for a minimum amount of years and can only have so many at-fault accident and tickets.

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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.