If you offer bundled home and auto insurance as a benefit, you could provide great value to your employees with little expense to you. How? […]
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If you’ve ever wondered why your car insurance premium differs from what your family and friends pay, you need to read this article! […]
Read More… from Factors That Affect Your Car Insurance Premium
Auto insurance prices rising slowly is due in large part to inflation, but you may have noticed that your auto insurance has risen more than normal lately. Most lines of insurance cycle between soft and hard markets over a number of years, which has a direct impact on the price you pay. Now, the auto insurance market is currently hardening after many years of a soft market, which has resulted in higher prices for personal auto policies. Download the PDF version All rights reserved. This Know Your Insurance document is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice. © 2020 MyTPG.com. Between 2011 and 2016, competition between insurance carriers created a soft, buyer-friendly market. Since then, however, a number of factors have caused carriers to exit the auto market or increase their prices in order to make a profit once again resulting in auto insurance prices rising. More Drivers Lead to More Accidents Thanks to low gasoline prices and rising employment rates, more Americans can afford to drive. However, more vehicles on the road have led to more accidents that must be paid for by insurance carriers, and many carriers have transferred this cost to policyholders by raising premiums. The number of accidents has also risen because of an increase in unsafe driving practices. According to the AAA Foundation for Traffic Safety, about 87% of drivers admitted to engaging in at least one risky behavior while behind the wheel, including using their phones and not wearing seat belts. Claim Severity The number of accidents isn’t the only factor affecting auto insurance claims. The size of the average insurance claim—also known as claim severity—has increased as well. The three largest drivers of claim severity include the increase in the costs of medical care, auto repairs and auto parts. According to a recent study by CarMD, the largest repair cost comes from replacing the expensive technology that’s common in newer vehicles, as body shops struggle to afford the special equipment and training required to perform the repairs. Uninsured Motorists Auto insurance is required in most states as a way to cover your own liability and provide compensation to others in the event that you’re responsible for an accident. Despite this, approximately 13% of drivers drive uninsured. Unfortunately, it’s the drivers who follow required insurance laws who end up paying the price in the form of uninsured motorist coverage. According to the Insurance Research Council, uninsured claim payments have risen by 75% over the past 10 years, resulting in a $14 premium increase for every insured individual. Autonomous Vehicles Although autonomous vehicles that can drive themselves have the potential to save lives and reduce injuries, they could also decrease the personal automobile insurance sector to less than 40% of its current size. While this change should be gradual, many insurance carriers have been slowly increasing their rates in anticipation of the shrinking market. Insurance Fraud Insurance is meant to protect you in the event of an accident, but many criminals try to illegally use insurance policies for their personal gain. Most fraud schemes involve a policyholder faking an injury and blaming a third party, or conspiring to cause an accident that can be blamed on someone else. Although insurance carriers attempt to uncover the truth during all insurance claims, the Insurance Information Institute estimates that insurance fraud costs the United States $32 billion per year. Unfortunately, much of this cost is transferred to law-abiding policyholders. Price Optimization Insurers commonly use applicants’ credit history as a factor in determining car insurance rates. However, they also use a practice called price optimization to see how much they can raise their customers’ rates before they decide to choose another company. For example, customers who tolerate small, regular increases to their internet or cable bills are more likely to stay loyal to their insurance carriers when premiums increase. How Can You Save During a Hard Market? With auto insurance premiums on the rise for the foreseeable future, it’s more important than ever to be aware of the steps you can take to save on your premiums. Contact us at 909-466-7876 to discuss your options for saving on your auto policy, even during a hard market. Download the PDF version […]
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Uber, Lyft and other ride-sharing services can make it easy to get a quick car ride or make some extra income, and they’re only becoming more popular. In fact, in the cities where these platforms are available, taxi ridership has declined anywhere from 10%-30%. However, the convenience of ride-sharing isn’t without risks. Most ride-sharing businesses are in the early stages of development, and the popularity, risk management and compliance issues they’re facing are all in uncharted territory. Download the PDF version © 2020 MyTPG.com. All rights reserved. This Know Your Insurance document is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice. How the Apps Work Each ride-sharing service has its differences, but they all operate under the same basic concept. Almost anyone can be a driver for these services, but each one has different minimum standards for screening drivers and their vehicles. Passengers can then see available drivers and make a request for a ride through an app on their smartphones. Most apps display the driver’s route and estimated time of arrival, in addition to the driver’s name, photo and vehicle information. The ride-sharing service then takes a cut of the fare, typically between 20%-25%, for each ride a driver completes. These apps are convenient for passengers who need a ride and for drivers looking to supplement their income. Still, they’re not without flaws. For example, it can be hard to determine what regulations or local laws each service and its drivers need to follow, what insurance coverages apply to them and who is considered liable in the event of an accident. When Insurance Kicks In Since ride-sharing drivers use their vehicles for both business and personal purposes, the ride-sharing services have to clarify when drivers are covered by different types of insurance. When a driver is not accepting rides, his or her personal auto insurance is the primary coverage. When the driver turns the app on, but has not yet accepted a ride, ride-sharing services generally offer contingent liability coverage if the driver’s personal auto insurance does not offer protection. When a passenger is picked up, the service’s policy is the primary policy until the end of the ride. State Involvement Unlike taxis, which are regulated on a city-by-city basis and have to follow specific guidelines, ride-sharing services haven’t had to adhere to the same strict regulations. However, this is beginning to change—some states are enacting laws to set standards and insurance requirements for ride-sharing. Additionally, upcoming court decisions will help determine who will be held liable for ride-sharing accidents in the future. Driver Risks Some ride-sharing companies provide liability insurance for their drivers in excess of their personal liability coverage. However, this doesn’t mean that drivers have insurance coverage for all of their risks. Drivers can be dropped by their insurance company if they engage in a commercial activity on a personal auto policy. As a result, drivers need to be honest about how they intend to use their vehicles when they obtain insurance. If a driver fails to indicate the intention to drive for commercial purposes, the insurer could not only deny claims, but also drop the driver from the policy entirely. However, some insurers have created hybrid policies that allow drivers to switch between personal and commercial coverage. Passenger Risks When a passenger gets into a car arranged by a ride-sharing app, he or she automatically agrees to a number of terms and conditions. If the driver gets into an accident and the passenger is hurt, there’s no guarantee that the driver’s insurance company or the ride-sharing service will pay for damages. For example, a driver’s personal insurance company may decide that he or she was driving for profit and, for that reason, isn’t required to pay any medical bills. The passenger would then need to take the driver to court for damages, which can be a costly and time-consuming process. On the other hand, passengers can approach taxi companies directly regarding liability and other safety issues. Safety is also a concern for both drivers and passengers. A driver never knows the type of person about to get into the back seat. Likewise, a passenger only knows how reliable a driver is from the information a ride-sharing service shares about the driver on its app. Tips for Passengers Using a ride-sharing app is generally a safe and reliable method of transportation, but there are safety risks to consider. Keep these safety tips in mind when using ride-sharing services: Share your trip details with a friend or family member in case a ride goes unexpectedly. Some apps allow you to share your route and driver information. Before you get in the car, check that the driver’s photo, name and license plate match what’s listed on the app. Never enter a car with a driver who offers you a ride and claims to be with a ride-sharing service. Never share any personal information that the driver doesn’t need to complete the ride. This includes phone numbers, as ride-sharing apps typically anonymize their passengers’ phone numbers to protect their privacy. Always wear your seat belt. If the car you’re riding in doesn’t have one or appears to be unsafe, instruct your driver to pull over and cancel the ride. Report any unsafe driving on the ride-sharing app immediately. While ride-sharing services evolve to meet the safety needs of drivers and passengers, insurance companies are taking different approaches to claims. Contact us at 909-466-7876 to discuss your auto insurance coverage and make sure you’re always protected. Download the PDF version […]
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Auto liability insurance is an important type of auto coverage that pays for the other driver’s expenses if you are at fault in an accident. Watch this video to learn more. […]
Read More… from [Video] Understanding Auto Liability Coverage
Though state laws may not require you to purchase both collision and comprehensive coverage for your policy, doing so can protect your financial well-being. Read on to learn more about these types of coverage. Collision and Comprehensive Coverage: The Basics Collision and comprehensive coverages provide financial safety nets in the event that your vehicle is physically damaged and needs to be repaired or replaced. Although these coverages are generally not required by state laws, they can reduce your financial hardship during a loss. Download the PDF version: Collision VS Comprehensive Coverage.pdf Disclaimer: This resource is provided for informational purposes only. The information provided herein is not intended to be exhaustive, nor should it be construed as advice regarding coverage. Eligibility for coverage is not guaranteed and limited to the terms and conditions contained in the applicable policy. © 2020 MyTPG.com Also, if you are financing a loan for a car, your lender will most likely require both collision and comprehensive coverage as part of your car insurance policy. Collision Coverage Collision coverage pays for the cost to repair damages to a vehicle due to an accident, either with another vehicle or an object. Typically, you will collect only the actual cash value of your car versus the replacement cost value. Gap insurance protects you in the event you owe more than your vehicle is worth. Collision coverage is generally the most expensive portion of a car insurance policy. Premiums are based on a number of factors, including your deductible, driving record and the type of car you drive. If your driving record is fairly clean (no or very few tickets or accidents), your premiums will be lower because you are less likely to have a collision. Comprehensive Coverage Comprehensive coverage pays for damage to your vehicle that is caused by theft, vandalism, fire, natural disasters or hitting an animal. Comprehensive coverage comes with a deductible and the insurer will only pay as much as the vehicle is worth at the time of the incident. To calculate how much your car is worth, look up the Kelley Blue Book value or the National Automobile Dealers Association’s Official Used Car Guide value. If your car is low in value, the yearly premiums for comprehensive coverage may not be a sound investment. Comprehensive coverage has many limitations, so it’s best to review your policy carefully to make sure you are properly covered. We’re Here to Help Call our office today at 909-466-7876 to learn more about collision and comprehensive coverage, and how we can protect you against losses. 4 Ways to Save on Your Auto Premiums: Consider raising your deductible. Maintain a clean driving record. Establish a solid credit history. Install an anti-theft device in your vehicle. Download the PDF version: Collision VS Comprehensive Coverage.pdf […]
