auto

Markets vary state to state, and you should compare quotes from as many markets as you can when shopping for anything. But if you get a good price from an agent who only deals with one company, you (and the agent) will never see other current rates to compare. An agent who is licensed with numerous companies that he or she obtains contracts with is called an Independent agent. Agents licensed with companies that require their agents to represent them exclusively are called Captive agents. There is this expression: Independent Agents Serve You Best.

Independent companies include Aetna, American Casualty (CNA), and Liberty Mutual.

Examples of Captive companies include Allstate, Nationwide and State Farm.

Examples of companies that deal direct, without agents, include Geico and USAA

The Insurance industry was built on the agency system. The agent is the sales force, and the agency saves the carrier from a lot of real expense. You should realize that when you call any company, for a policy change or a quote, someone earning a living is sitting in a furnished office with overhead that someone has to pay for (out of your premiums). There might be savings by centralizing, but someone has to do all the same work. Independent agents as well as Captive agents are offended at Geico. Their ads say, "Drop an expensive part of your car insurance... The middleman!"

Whom do you expect to get honest, impartial advice from? The company??? The Claims Department?

There are complaints as well as praise about every insurance company. There are a lot of claims, and having many examples is just the law of large numbers. Some companies have a better record than others, but basically, the auto industry has a fairly good record of satisfied customers (maybe because of regulation).

Auto Insurance is the number one insurance need and for many, and the first insurance that they negotiate and maintain themselves. The process can be confusing and intimidating, like any legal contract. Most of us can't have an attorney advise us everywhere.

But you certainly should hire a competent attorney when you purchase real estate.

Home Insurance is not only for homeowners, it includes a renter's policy (maybe the best bargain of all).

When you purchase a house, the bank requires the dwelling be protected by what they call hazard insurance. The don't care about some of the variables available to you. They don't care if your furniture is covered to replacement value, they don't care if it is covered at all. You want more that the basic fire policy.

You don't want to hear, "That isn't covered on your policy!" You want the broad form, all risks policy. Instead of listing the insured perils like Fire, Theft, Wind, Hail... it says everything is covered except what is specifically excluded by the policy.

Until the process and options of your insurance needs are familiar, like after a decade of driving, a professional advisor is more than a little valuable. An experienced agent or legal professional might consider buying direct, but you (and you know who you are...) need the guidance of an independent agent. If you think you are informed (and things change), when you move, laws vary. Almost half the states have no-fault laws, and they vary.

In some states with true no-fault auto insurance, victims of auto accidents are covered by their own insurers, regardless of who was at fault in an accident. Victims can sue the other party under certain circumstances; the limitations vary among no-fault states. The basic concept is a good one, take the matter out of the courts. No-fault insurance laws vary widely, so (if you are not in DC, MD or VA) you should check with your insurance commissioner's office or an insurance agent for requirements in your state. If part of your coverage is based on no-fault laws, find out if it covers you when you drive in other states.

Virginia and Washington DC have the legal tort system (what I like to call Yes-Fault)! Maryland is similar, but a no-fault coverage called Personal Injury Protection is a required part of liability insurance. It pays up to a $2500 limit per passenger, and not only covers medical, but other out of pocket expenses. Since its inception years ago lawyers have had a field day with it. In the recent past a policyholder was given an option. Now they can waive the coverage (and most of the premium) for themselves.

You can call your state insurance commissioner's office for answers to these questions and ask what other insurance information is available to consumers. All state insurance commissioners are located in the state capitals, and most have toll-free telephone numbers listed in local telephone directories under "state government."

Owning and operating a vehicle brings risks of being responsible for damage. That is a big hunk of steel that you propel so easily with your foot. Think of all the property, not to mention people, that you pass by with or without distractions like your phone and car stereo. Accidents happen. Losses add up to billions of dollars annually. Automobile insurance plays an important role in protecting us all from serious financial loss arising out of such accidents.

You could hit one school bus and do more damage than your policy limit. States require that you have a minimum amount of liability insurance, and you should increase it substantially if you can.

With standard carriers the increased limit premium is very reasonable. You should request the maximum they offer, usually $300,000. That is still not enough! Everyone should really have an Umbrella, raising limits an additional million (or two).

Now I realize there are those who find paying basic coverage such a burden that they feel they can't afford any more. They might be right. I understand what it is like to have less than enough take-home pay to cover all the bills. It should be an educated decision, but this is a place for advice. You should buy as much liability coverage as you can afford.

Even if someone is without any assets, they could be sued for future earnings. If you think you have nothing to lose, you haven't been through the ordeal. An unsatisfied judgment can follow you around, and a bankruptcy (the only way to get rid of a judgment other than paying it) is not a simple procedure. Bankruptcy can be a really emotionally draining event. If you really have nothing, are already judgment proof, and plan on dying soon, it still would be irresponsible to drive with insufficient coverage.

a) Bodily Injury Liability. Pays your legal defense costs and claims against you if your car injures or kills someone. Covers family members living with you and others driving with your permission.

b) Property Damage Liability. Pays your legal defense costs and claims against you if your car damages another's property. Does not cover your property, including your auto.

Pays medical expenses resulting from an accident for you and others riding in your car. Also pays for you or your family members injured while riding in another's car or while walking.

Do you need medical payments coverage if you have health insurance? Not necessarily. On the other hand, it is inexpensive and can simplify certain situations. Medical payments coverage pays emergency medical expenses and other costs for anyone hurt while in, on, or around your vehicle, such as a neighbor who accidentally slams his fingers in the car door. If everyone had good medical coverage, or socialized medicine (sorry, that slipped out), medical payments coverage would be an unnecessary duplication of coverage.

Being an agent is a series of what ifs. Medical payments can pay for passengers regardless of liability, just because it happened in or around the vehicle. With some companies it is overpriced, and with some it is a bargain. Having the coverage allows your company to cover these medical expenses without admitting liability.

a) Collision. Pays for repairs of damage to your car caused by a collision with another vehicle or any other object, regardless of who was responsible.

b) Comprehensive Damage. Pays for damages to your car resulting from theft, fire, hail, vandalism, and a variety of other causes. Comprehensive means everything other than collision, or other things specifically excluded in the policy. Sometimes a company issues a more limited, named-peril policy. This may not satisfy a bank or lienholder. If it says Fire, Theft and Collision, you probably don't get vandalism or glass coverage.

Pays for costs related to injuries or property damage to you or your family members and guests in your car caused by an (at fault) uninsured, underinsured, or hit-and- run driver. A hit and run must be reported to the proper authorities.

There are many places to look for the frequently asked insurance questions. Our front page has hyperlinks to some state insurance departments, company publications and websites.

Discrimination is not always a dirty word. Companies can't discriminate by race, creed etc. but some other things that statistics show as indicators can be used. Do you think everyone should pay the same? There are some things and some forms of insurance that charge everybody the same, but it seems fair to surcharge risks that have an increased exposure.

A recent driver history that includes accidents is a reasonable indicator of risk. Everyone should agree with that, as well as whether or not you commute in rush hour daily. Everyone won't agree with all the rating criteria that is being used, but the car model (including 2dr or 4), where you live and who drives your car can all be factors.

In the last ten years a few carriers have ordered credit reports and surcharged drivers (or even rejected them) who had declared bankruptcy. Bad credit can effect you here too.

As a real radical thought, read a small out-of-print paperback called Auto Insurance Alert!/Why the System Stinks, How to Fix It, and What to Do in the Meantime, by Andrew Tobias.

He makes a lot of sense, and points out the incredible duplication of expense by having us be forced to purchase auto coverage individually.

Auto Insurance Alert! by Andrew Tobias

Here is a quote, as I remember it, to make his central point:

Suppose in order to get a job, you had to purchase your own policy for Worker's Comp, protecting you if you were hurt on the job. You would go to a company, or an agent, and shop for the coverage.

The agent would ask what kind of work you did, and need to see a history of your past work experience along with claim and accident history. He would have some variations in coverage you would have to decide and then you would pay a premium and he would then give you a contract with pages of legalese, printed on onion skin paper (well, he didn't write this recently...), that you would take to your new employer. If you changed jobs, you would have to go back and amend the policy.

That is basically what you do to obtain automobile insurance in order to register a vehicle! I don't need to rewrite his book here, but what Mr. Tobias suggests is we be divided into homogeneous groups of vehicle owners. Insurance companies would remain, and competition would continue. Instead of signing up one customer at a time, the insurance carriers would have to take a unit of 1000 grouped, homogenous vehicle owners (we're called risks). They would also receive a large sum ($1M?) of collected premiums. Maybe there would be bidding.

The funds raised would not come from a traditional policy premium. Instead, the government would add a large (dollar a gallon?) gas tax. These fees are paid for by the vehicles actually out there on the street! What a concept... In addition, registration and inspection fees would go up substantially. Higher fines for violations that cause accidents. But these fees, although smaller now, are already being collected. The gas station is already collecting at least two taxes and having them deposited daily to a tax account. The registration fee when you renew your tags is already being collected. It wouldn't cost anymore to collect the higher amounts.

A cynic might say too many people are invested in the status-quo for this to happen.