Let’s talk auto insurance for a bit. There are a number of factors that affect the cost of your auto insurance: previous driving records, history of auto accidents or lack there of, number of vehicles on the policy, zip code, how the vehicles are used, etc. Beyond the obvious factors, what else can increase or decrease my auto insurance rates?
Before we dig deeper into this topic, I do need to tell you that each insurance company is different when it comes to determining your rates. Your insurance agent will help connect you with the insurance company that best suits your specific auto insurance needs.
Alright-on we go!
So what types of things will affect your rates…
Both the number and severity of traffic violations you have will affect your insurance rates. In Indiana, police officers use a point system categorizing the severity of a violation. When you get a ticket, the points are added to your record and will remain there for 3-5 years depending on the insurance company. A minor violation is two points and a major violation is 4 or more points. Some insurance companies will forgive your first minor violation; however, there are companies that will not insure individuals who have severe traffic violations (i.e. DUI, OWI, etc.). Remember, insurance companies are focused on risk assessment. If the number of points on your driving record is high, you are considered a riskier driver. For more information on the Indiana Point System for traffic violations, here is a link to the DMV site.
Credit Score (aka insurance score)
Low credit score = higher rates. Why? Statistically, people with low credit scores are less likely to keep up the maintenance on their vehicle and/or claim a loss to their vehicle for which there is a greater payout. This isn’t the most pleasant theory, but there is evidence behind it. In 2003, the Bureau of Business Research conducted a study where they found that, “the average loss [amount of money paid out in the event of an accident] per policy is higher for the lowest credit score deciles* and lower for the highest credit score deciles” (Kellison and Brockett, 2003). In other words, after analyzing 175,647 separate policies they found that those with poor/low credit scores were more likely to file a claim and, therefore, have a greater record of loss. If you would like more information, the Federal Trade Commission also did a study that resulted in similar findings.
*1 decile represents 1/10th of the sample population.
This one feels a little more obvious, but it’s still worth noting. The age and condition of the car impact rates. For example, newer vehicles generally mean higher insurance rates because the cost of replacing parts is higher. Remember, insurance companies are assessing the value of the vehicle and the replacement cost in case of an accident. Conversely, an older vehicle that is in mediocre condition will most likely have a lower premium because the parts are cheaper. The exception is, of course, collectors vehicles. You’re 1934 Ford Custom is more unique and more valuable than my 2001 Dodge Neon; therefore, it costs more to insure. Something else to consider: Is your car customized? AKA Have you added enhancements to your vehicle that weren’t there originally? If you have custom upolstry and a lift kit , this adds to the value of the car. Your rates will probably increase, but you need to let your insurance agent know about any customization! If you get into an accident and we don’t know about these additions, you won’t be covered for them. Finally, I want to ease your mind a bit on one false bit of gossip. Contrary to popular belief, the color of a vehicle doesn’t effect the insurance. So, take a breathe all of you with those red cars!
Now for the good news!
I think that is enough bad news for one blog, so I wanted to conclude our time with something a bit more pleasant.
Here are a few discounts offered by most auto insurance companies:
Loss Free Credits
Never been in an auto accident? Most insurance companies offer discounts or credits to individuals with a clean accident history. If you are involved in an accident and file a claim, the record of that loss will remain on your driving history for 3-5 years depending on the insurance company. After that time, you may just see a decrease in your auto insurance premium.
Good Student Discount:
Good grades don't just look good on your child's transcript, but they can also save you money! Student drivers with a B grade point average or better qualify for a Good Student Discount. They are eligible through college. All you, the insured, need to do is bring a copy of your child's report card/ transcripts to your meeting with your Cardinal Insurance agent.
Multiple Cars/Packages policy
You can save money by purchasing all of your insurance (home, auto, etc.) through one company. We call this bundling! Also, some companies offer discounts for insuring multiple vehicles on a policy.
A few Ideas on How to Save Money
Here is my last bit of advice for this week. Setting up payments for every 6 months or once a year can save you money because most companies charge a $5-$10 processing fee per bill. I do understand that this may be a large sum of money leaving your bank account at one time. My recommendation in that case would be to sign up for Electronic Funds Transfer (EFT). Signing up for EFT can save you money and help you avoid lapse in payment. Lapse in payment will result in late fees-and that is just not my idea of a good day.
Thanks for reading! I hope you found this week's topic to be helpful. Most of the information was gleaned in a interview with Kevin Wheeler, CIC, CPIA. If you have any questions about insurance, our agents would love to hear from you!
THE AUTHOR: My name is Anna and I just started working at Cardinal. I am new to the insurance business, but I have already learned so much. I have many questions about insurance, as I'm sure is the case with many of you. While I may not have the answers - I will be picking the brains of the Cardinal Insurance Team. Shoot me an email with your questions - and I will get the answers! mailto:firstname.lastname@example.org
Even though I have only been at Cardinal Insurance for a few months, I have learned many things about insurance that I never thought I would need to know! Being a regular Uber user and knowing friends who supplement their income by delivering food, this topic was particularly interesting to me.
Let’s dive in:
My child delivers pizza, am I covered by my personal auto policy? I am delivering food for an independent food delivery service (i.e. Delivery Dudes, Door Dash, etc.), do I need business (aka “commercial”) auto insurance?
Let’s unpack this a little. As a rule, if your personal vehicle is being used for anything other than commuting, you should ask your insurance agent about purchasing commercial auto insurance.
Generally speaking - personal insurance policies don't like business exposures. The policy is loaded with exclusion for the business use of a vehicle. This means - no liability coverage to protect you if you hit someone, no medical payments coverage, no coverage for physical damage to your car and no coverage if your hit by an uninsured motorist.
Here are a few things to consider:
Does the company you work for provide a vehicle?
My name is Anna and I just started working at Cardinal. I am new to the insurance business, but I have already learned so much. I have many questions about insurance, as I'm sure is the case with many of you. While I may not have the answers - I will be picking the brains of the Cardinal Insurance Team. Shoot me an email with your questions - and I will get the answers! mailto:email@example.com
There have been a massive increase of ransomware attacks that have been spreading across the globe. Some have completely paralyzed business options. While ransomware is only one form that is burden, cyber criminals are finding more and more ways to disrupt businesses and add to unbudgeted expenses.
They are coming in all forms, and not just emails!
Our office had our phones hacked from a group when they called random phone numbers till they found an automated answering system. Once they established we had a automated phone system, they kept dialing phone extensions until they found one that did not have a password to access. Once that was accomplished - they redirected phone calls thru that extension to overseas phone calls. We were able to catch and shut it down within 30 minutes, but the criminals had racked up over $250 of phone charges in the middle of the night. Had we not caught this, it could have been thousands of dollars of expense....and no, the phone company didn't waive the fees!
A local school system had a suspicious email that went out to all the teachers from the school administrator - by the time the school IT people caught what had happened teachers had already mistakenly open their email and the virus was in the system causing havoc and disruption to the day. In fact the cyber criminals had infected the Google search for the school. When you searched for the school and clicked the link for their website, the ransomware infected your computer.
Common way ransomware hits is thru a well-designed phishing campaign that comes in a variety of email messages. Complete with legitimate logos and notices of shipment status, status of your accounts, flight itinerary notice, and more. But, the all have one thing in common - the email ends with wording referencing a password for the attached Word document. We also see hyper links to get more information too.
DO NOT OPEN THESE EMAILS. If you receive any unfamiliar email, it's best to permanently delete it. Once you click on the attachment, a program encrypts specific files on your computer and demands a payment by Bitcoin, a virtual currency. After the initial infection, it spreads to other systems within the network that haven't applied the latest Microsoft patches. This secondary infection is causing the majority of the issues you are hearing about in news reports.
How to avoid an attack.
Concerned on how to protect your business - contact one of our agents for more info.