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What is an Auto Insurance Binder

Written by Todd Clay. Posted in Definitions Last Updated: 12/31/2017

An auto insurance binder is simply a letter promising you temporary car insurance, issued to you by an auto insurance company. A Binder letter is provided to you once you make an initial payment with your auto insurance application and serves as your de facto insurance coverage until an official auto insurance policy has been issued to you by your auto insurance company. When you apply for auto insurance, the policy must be underwritten, which means your application must be fully reviewed and the risk assessed for insuring you. Since this underwriting period can take up to 60 days, the Auto Insurance Binder is an important element of initial coverage. (110 words)

How to Get an Auto Insurance Binder

An Auto Insurance Binder letter is issued to the consumer once the application for coverage has been submitted and the estimated first month’s policy has been paid in full. It is becoming more common that an auto insurance company can issue a policy immediately, in which case a Binder isn’t necessary; however, if the policy is more complicated (eg: written for more than one auto, different types of autos or a fleet), the insurance company can take up to 60 days to issue a policy. In this case, the Auto Insurance Binder is very important because it guarantees coverage before the final policy is issued.

Auto Insurance Binder

Auto insurance binder serves as your de facto insurance coverage until you get the official auto insurance policy

Foreign Driver in Need of Temporary Car Insurance

Written by Michele Wilmonen. Posted in Ask An Insurance Question Last Updated: 01/01/2018

Q: I am french, temporarily visitor in CA. A friend of mine is lending his car, but as I don’t have a CA dirver’s license, I need to get a temporary car insurance; and only for January to march.

How can I do ? So far, I have been rejected everywhere…

A: Your friend’s insurance will cover you without you having to be listed on the policy as you are only a temporary driver. Always remember, insurance follows the vehicle not the driver.

As far as you getting your own temporary car insurance for your friend’s vehicle with you as the driver, just give up now, as you are trying something that is almost impossible for a number of reasons.

  1. It’s your friends vehicle, you are not the owner and have no financial interest in the vehicle. No insurance company is going to write you a policy to cover your friend’s vehicle while you are driving it.
  2. You don’t reside in the United States and you have a foreign driver’s license. I have seen insurance policies being written for those that have had foreign licenses, but they are surcharged heavily and everyone of them had just moved to the United States. Also, none of them were only here temporarily.
  3. Car insurance companies don’t write temporary car insurance policies.
  4. If you were a resident with a United States driver’s license, you could get a non-owners policy as your temporary car insurance. However, this would only provide liability coverage and I have never seen a non-owners policy be issued as a temporary car insurance policy to a foreign visitor.

My Car Insurance Agent Switched Me

Written by Michele Wilmonen. Posted in Ask An Insurance Question Last Updated: 12/31/2017

Q: Trying to stay in same office. It is just the agents name changed. The car insurance agent that is retiring had already changed us to different office we do not want.

A: Something sounds off in your car insurance agent’s office. Usually when a car insurance agent retires they pass their book of business (all of their clients) to another agent in their office. If they moved their book of business to another agency completely they may trust the agency they moved you to more. I would get online and check the reviews of your agency to see if maybe something has gone downhill recently. This does not mean there is a trust issue necessarily, but it is always good to check before you try and switch your policy back.

Was your agent the owner of the agency, is that why the name changed? Was the car insurance agent that is in the office now, there before or did they just arrive as your agent announced his or her retirement?

Sometimes when a car insurance agent gets ready to retire, they sell their agency. Now, the person they sold the agency to may not want to write all of the same types of policies your car insurance agent did. So, the new owners will buy the agency and the part of the book of business they want and the remaining part of the book of business will be given to or sold to a different agency that does work with those types of policies. This could very well have happened also.

Best thing to do? Talk to your old car insurance agent and ask why they moved your business to a new agency.

 

Rates Goes Up After No Car Insurance Claim?

Written by Michele Wilmonen. Posted in Ask An Insurance Question Last Updated: 12/31/2017

Q: I got a parked big big truck …( I know how the hell do I not see a truck the size of a mobile home it was a semi that was pulling out a 3 bedroom mobile home) I hit it not a scratch on the big truck my truck back fender was done
I reported it because my daughter said to but I did not put a claim in I fixed it myself paid out of pocket no damage to anyone biggest damn mistake ever even though I didn’t cause any damage and no car insurance claim and know when I call I got a quote for 135 but then they see the accident and it goes up to 210 a month and went from 180 down to 250 down and that’s the cheapest There’s higher ones.

A: Unfortunately, yes, this happens. Any claim that is reported on your car insurance goes on your CLUE report and can be counted against you even if nothing is paid out.

Is this fair? No, it is not. But car insurance companies argue that any accident that is reported, whether they pay out anything or not, is a glimpse into what your driving is like. Any accident you have increases your risk that you will have other accidents in the future and they want to charge you a higher rate to protect themselves from this likelihood.

For the many times I have been asked if someone should report a claim, I always tell them that it is up to them. The car insurance is there to pay for events like this, but there is always the chance that their car insurance premiums will go up with any car insurance claim they report, regardless if it is closed without pay.

 

Car Accident = Auto Insurance Rate Increase?

Written by Michele Wilmonen. Posted in Ask An Insurance Question Last Updated: 01/02/2018

Q: How much does Ins go up if U was in a car accident?

A: Have no idea.

It may not go up at all. Then again, it may very well triple the auto insurance rates you are paying now.  Just like with your auto insurance rates, everyone’s policy will be affected differently by a car accident. On top of that, every car accident will affect your rates different. Not to mention, it also depends on which driver on your policy caused the accident.

A policy with no previous accidents and something like accident forgiveness won’t see an increase at all. A policy that has seen a number of accidents is going to see a substantial increase.

An accident with a deer is going to have much less impact on your car insurance than a car accident with another car that resulted in injuries.

A car accident caused by your 16-year-old son is going to create much more of an increase than if you were in a car accident.

There are so many variables when it comes to the impact that a particular car accident will have on auto insurance rates, no one will ever be able to tell you how much insurance will go up if you were in a car accident.

 

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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.