Premium Quotes: Based On General & Not Accurate Assumptions
Most car insurance companies set their premiums based on their assumptions of what kind of driver you are. It is no wonder then that insurance for young drivers are a lot higher, again based from the assumption that they are more reckless behind the wheels. The more reckless you are perceived to be, the higher the risk for the provider. They need to translate this potential risk with a higher premium as a way for them to recover from the loss. The same assumption is applied to male drivers with women drivers capitalizing on the perception of insurance companies that they are more responsible on the road.
It may seem unfair though if you happen to be a young male driver, who is extremely cautious when driving. You will need to pay for the discriminatory rates of the many insurance companies in Australia. It is very unfortunate that these companies do not conduct individual investigation and would rather rely on general assumptions.
Insurance companies offer reasonable premium rates to the “average” driver, but fail to really define what they mean by “average.” There is clearly a need to lobby the insurance companies and educate them on the discriminatory assumptions that they practice. There must be a way for insurance companies to be really informed as to the manner of your driving. There are very few insurance companies who do take the trouble to find out about their customers. They manipulate modern technology in the process of making your quotes. They look at real and not just assumed risk factors. They look into the type of car you drive and find out the way you handle the wheel. These are factors that will determine the fitting rate for the kind of risk you offer to your providers. This method of assumption-testing quoting will require more questions. These questions will better enable you to make a more accurate quote as compared to the basic queries on your age, address and accident history.
These series of questions are particularly useful for buyers with unique driving background. Most Australians do not really fit into the calculations made by most insurance models for they simply assume the number of miles you have driven within a year and that you are using your car constantly in a given week. This assumption may have a sound basis in the past but our lifestyles have changed considerably especially with the advent of the information technology. Instead of going out to the malls, we often buy products online. Working from home is also fast becoming a trend. Many companies aim to be cost-effective and another way to do this is by maintaining virtual offices. There is no need to rent an office or handle voluminous amount of paper. Most communication are done via e-mails or other internet tools. The so called “average” driver may no longer be existing.
Homemakers, pilots and sailors are also people who do not meet the profile of the average driver. From these examples, one can deduce that most rates given by insurance companies do not really reflect the actual driving practice of many individuals. Since you are the buyer, you can refuse to be boxed in such a flawed system. You need not accept the arbitrary premium ratings that insurance firms give you. You can look for those companies who really try to get to know you and not just categorized you based on sweeping assumptions.
Why Women Tend To Have A Lower Car Insurance Rate
Car insurance is very essential since we rely on our dependable means of transportation in order to have a relatively easy life. It is a known fact that it is very difficult not having a car. It limits your movement not to mention the inconvenience of commuting or transferring from one vehicle to another. It can be a lot safer too to have a car rather than take a cab especially for women. If you have not insured your car, you will not only lose a reliable mode of transport, but may pay for the damages incurred if there are other vehicles involved.
There are a good number of considerations that a car insurance provider looks into before approving a certain application. One of these considerations is the gender of the driver. It just so happens that women get a relatively lower rate than men do. Men are perceived more naturally aggressive behind the wheels than women, who tend to be more careful especially if the kids are in tow.
The reasons why car insurance companies look into the demeanor and attitude of individuals while driving is because of the amount of risk involve. To put it simply, men are more at risk to have car accidents because they drive faster and are prone to break more traffic rules. If accidents do happen, then the car insurance company is required to pay the claim. Hence, the more chances of accident, the frequency of the claim. It will not be good for business if the company keeps on shelling out and covering the costs. This is the primary reason why certain individuals who are considered high risk may be denied of car insurance. Most car insurance providers will most likely reject individuals with a record of many road violations.
Many car insurance providers are relying more on statistics that shows that women are having less accidents than men are. This may be contested by some of the responsible male but this is what the numbers show. Thus, younger women easily get a cheaper insurance rate than younger men do.
There are other considerations than just gender. The type of car you will de driving and seeking coverage for will also affect your application. Obviously, a fast MGB compared to a regular family wagon will be considered more at risk. Teenagers or young persons may also be considered a high-risk group. Young people are not so responsible behind the wheels and they tend to be reckless.
In addition, most car insurance companies also look into the number of hours that you will de driving. An individual who will only use his car every Sunday to worship is less risky than a person who will be driving to work, covering a distance of thirty miles everyday.
You can actually ask for a more affordable quote by making sure that your driving record is clean. Moreover, try to ask for several quotes from various companies so that you may compare them and choose the ones you can afford. Remember to also look into the company’s underwriting rules for these vary depending on the policy of the provider. The best way is to have three quotes that you can study and peruse further.
How Young Drivers Can Get Lower Car Insurance Rates
Having your own set of wheels is not only a luxury but often a necessity even for young people. Driving is not just for fun and entertainment, but equally important, to go to school or the workplace. However, young drivers are required to pay the high insurance premiums before they could drive. Young people are seen as less cautious behind the wheels and therefore, run a greater accident risk. These high fees are enough to dissuade them from driving since the fee is evidently not affordable to them. There are a number of ways to reduce the cost especially for young drivers that are women.
Women drivers are considered more cautious and thus, required to pay a relatively lower rate than men drivers, who may have the tendency to be more aggressive on the road. If you are a young woman driver, you may capitalize on this despite the disadvantage of your youth by first getting a fairly safe and practical car. The insurance company will certainly take comfort in your smart choice.
Young drivers, in general, may also avail of a defensive driving or driver’s safety training programs. These programs train young drivers to focus on their driving and gain expertise in defensive driving. Most insurance companies believe that young drivers are so inexperienced and inattentive that they often have road mishaps or get carnapped.
Another option is to know and study the terms and conditions set by the insurance companies. Ask if they give discounts if you make the following safety precautions like adding an alarm system, parking in an enclosed garage, or even keeping to a mileage limit.
If you happen to be a young student driver, you can capitalize on having a high GPA. A high GPA is as good as having a high credit rating score in the insurance company’s perspective. They assume that young drivers excelling in school are far more responsible behind the wheels.
Lastly, make sure to compare insurance quotes from various companies. Choose the ones with lowest rates and try to negotiate an even lower premium given certain conditions. The challenge to young drivers is to convince and persuade the insurance companies to see them differently. Perhaps, if they are fewer occasions of road mishaps involving young drivers and fewer cases of car thefts due to negligence, then this may be possible sooner than you expected.
Car Insurance Coverage: Know More Coverage Options
Just as it is good for you to get car insurance coverage, it is also wise for you to know that your coverage should not be limited to normal liability and collision procedures only. As such, you have many options to choose from such as uninsured motorist, comprehensive, towing or rental car coverage which can provide you more comfort and free you from stressful situations just in case the inevitable happens.
There are different kinds of coverage. For one, the Liability Auto Insurance Coverage Liability deals with the damages to the other party, brought about by the insured car owner. This kind of insurance is usually compulsory. There may be ceiling limits as to the costs to be paid for coverage depending on the area or state you are in. You have to know that there are two kinds of this liability coverage.
1.Bodily Injury refers to the coverage that would cover medical costs
caused by the other party included in the accident.
2.Property Damage covers damage to other vehicles and personal possessions
included in the accident.
The Collision Auto Insurance Coverage offers coverage to the policyholder’s car when involved in a collision accident. There is a deductible included and as a car owner, you must choose for the highest possible deductible that can be offered to you. You must keep in mind that the higher the deductible, the lower is your policy amount. If you have an older car, the collision insurance coverage would depend on the car’s value; thus it would not be good to opt for this kind of coverage. The insurance would only pay the maximum worth value of your vehicle and if the damage is more than the value, then you have to shoulder the excess costs.
Whereas, when a car is loaned or rented, the lender would often oblige the car owner to get the collision insurance coverage as a requirement of the loan or lease.
The Comprehensive Insurance Coverage offers cover for the car owner’s motor vehicle for damage that doesn’t involve any collision. This kind of coverage is commonly enforced on car owners whose cars are rented or financed. These non-collision damages consist of theft, vandalism and nature (flood, snow, hail… etc)
The Uninsured Motorist Insurance offers coverage for medical and property damage when the other parties at fault don’t have insurance or don’t have adequate insurance to pay for damages and injuries. This kind of coverage is compulsory in some states.
The Gap Auto Insurance is applied most especially when a new car is financed. Make it a point to remember that once you get your new car and you drive off with it, its value depreciates once you use it. This kind of insurance gives coverage for the difference between the price of your car and the amount of cost you still owe to fully pay your car. To illustrate, if your car is worth about $30,000 and if the amount owed to the car is about $40,000, then the difference is $10,000 which is the amount the Gap Insurance is allowed to cover.
There are still other kinds of auto insurance that can be included in your insurance plan.
1.Towing- offers coverage for jump-starts and lockouts
2.Rental car coverage- when your car can’t be used due to accidents
3.Classic car coverage- for cars older than 25 years
Of course, you must also realize that car insurance rates and costs may differ depending on the car model, location, the car owner’s driving history and some other circumstances due deemed important by the insurance company. That said, it is a smart move for you to compare and do some research about car insurance companies which you think you can afford and offer you the best kind of coverage that you need for your car.
Auto Liability Insurance Policy: Important Facts You Should Know About
If you are planning to get car insurance it would be an advantage for you if you include the auto liability insurance coverage in your policy. This basically refers to the accountability an individual has for somebody else’s damage or loss. Disputes about car liability are normally resolved in courts, and these can lead to spending a lot of money. So to help provide protection for you against that problem, having an auto insurance liability policy is a wise and smart move.
There are two kinds of auto liability insurance coverage. The commercial auto liability insurance is a good protection for your car. If you and a company employee is involved in a severe accident and consequently sued by the other party, the car liability insurance policy protects your company’s resources. The auto liability insurance policy has its limits and that limit is the full amount of money the policy will give to protect you.
The business auto liability insurance provides coverage for the financial responsibility if you or a company employee is at fault causing physical injury and damage to property. This kind of insurance is required in most states. This coverage also protects you just in case the other party involved in the accident would not be able to pay you damages.
You should be aware that there are two different kinds of liability auto policies. One is the Combined Single Limit policies which covers both property damage and physical injury. The second kind is the Split Limit policies which have split costs for property damage and physical injury. However, coverage for physical injury is often separate. You can avail of coverage that would be the highest or maximum payment per person or highest or maximum payment per accident.
Most companies prefer to get insurance protection above the minimum level to protect their interests. This is just in case that if the other party sues them for larger damages costs, then the auto liability insurance coverage can help them cope up with these costs.
However, remember to keep in mind and identify the kind of protection coverage that you need. Keep it within the budget range you have in mind. Be sensible and practical enough to know what you can afford. You can get the minimum level coverage that could provide you enough protection against property damage and physical injury. At least, you are still covered by insurance no matter how small it is at the time being.
Basic Steps to Remember to Get Good Car Insurance
If you are thinking of getting a car be sure that you are ready to handle the expenses that go along with it. You may like to buy your dream car. You like a car that would be a fast and sleek one that would make you feel proud of owning it. With that in mind, you might as well also think of how you are going to take care of your dream car. The best option for you to do is to get car insurance for your car, a good one for that matter, one that would give the best quality protection for it in case something bad happens.
1. If you have the money to buy a car, then it also means you have already planned of getting insurance for it. You must have allotted a good amount to cover that idea. Most people in the know, however, advice that car insurance coverage should come first before actually buying a car. The key here is that you should afford car insurance for your car within your means. If your dream car is a Ferrari, you might be in for a shock about the cost of car insurance you would have to pay. So for practical purposes and for you not to be sorry later on, it would be wise to look around for a car insurance first that would match the model of the car you intend to buy.
2. Do your research about car insurance coverage and the companies that provide them. Get a directory and call the ones which you think can give you a good quote. You can also go online and check their history and their reputation in providing car insurance to users. Be sure to inquire thoroughly about premium costs because they may vary from one insurer to the other and the area where you come from. You can get more information about this by checking from the NWS Motor Accidents Authority (www.maa.nsw.gov.au).
3. Think Third Party Property Insurance or TPP. You must get this important kind of insurance as a minimum. It is a very good kind of car insurance protection for your car against damage or accidents. Just in case you hit an expensive car like the latest model of Audi and you have to pay the repair costs for it plus the costs to repair your car would make you totally broke; the TPP saves you from that. TPP also covers fire and theft for your car. You may have to pay for a higher premium for it, though. It is considered a risk by most insurers but then they need to have that kind of insurance coverage to please their clients.
The TPP is usually applied for older and very pricey cars that require higher insurance. It can also provide coverage damage up to about $20 million. Some insurers may propose for a free limited cover for damage just in case a non- insured car caused damaged to your car which can go as high as $4000.
4. Get comprehensive car motor insurance to cover any damage to your car. Inquire about this from car insurers and get the best deal that you can get to save you money. Some insurers offer discounted premiums for drivers who are older than 25 years old.
5. Most of all, don’t forget to read and understand the fine print. Be frank and honest when getting your car insurance coverage. Some insurance companies will not pay for damages if something’s amiss in your coverage. Ask questions, inquire and understand; and let the insurer explain what you don’t understand in the fine print. That way you won’t be shortchanged just in case your insurer disputes your claim and you would know what to do just in case that happens.
So to lessen your worries about protecting your car from any damage or accidents, think of a getting a car insurance that would suit your needs and provide the best protection for your car. Old or new, your car deserves it and keep in mind that it would do you a lot of good too, since you’re the one driving the car.
Bouquet of products from Virgin Money
Virgin Money has been diversifying into a variety of products in the last few years and the latest product it has planned to offer in its bouquet is the sale of a car insurance product to its customers. The company has plans to introduce personal loans, deposits, credit cards and home loans as well in the next two years as per statement issued by Sir Richards.
The company had first got into the business of credit cards some five years back when it launched a low cost credit card in collaboration with Westpac and soon had about 750,000 accounts. All these customers were inherited by Westpac when the contract between Virgin Money and Westpac ended about a year back.
Virgin Money has recently entered into a 10 year contract with Citibank for rolling out credit cards with an exclusive profit sharing agreement during this period. This credit card called the Citibank-Virgin card is expected to be issued from July, 2010, which is likely to be followed by online deposit account and retail savings. These accounts will not have any branch access and are planned to be operated online or through Citibank’s call centres existing at present. The Citibank Virgin joint venture also has plans for introducing a Virgin Blue credit card that will be linked to budget airline with provisions for reward points. This card will have direct competition with Quantas-associated credit cards.
The Australian car insurance segment is highly concentrated with about 75% of the market covered by brands owned by Suncorp-Metway and IAG. The focus of the strategy of Virgin Money as regards selling car insurance products is to offer customers insurance at a much cheaper cost compared to the existing rates in the market. The company plans to offer its products at about 35 to 40% cheaper. Virgin Money was targeting a customer base in this segment of about 40000 to 50000 in about one year time. It is planning to offer insurance products that are capped for two years and thirteen months at the price of 12 for comprehensive cover chosen by customers online. The Auto & General Insurance Company, the largest insurer of South Africa, which is planning to expand into Australian market, is underwriting the Virgin Money’s car insurance offerings.
Old and low insured value cars are more prone to theft than others
According to the data for claims released by RACV Insurance, most of car thieves in Victoria are targeting cars which are insured for small amounts and those which are almost a decade old. Cars that were more than nine years old were the favourites of thieves, as they accounted for about 73 percent of car theft claims. Cars having less than $6000 insurance value accounted for more than half the claims filed with RACV. Vehicles that were less than three years old accounted for only 4.5 percent of the theft claims with the company.
Car owners are quite careful if they are driving a new car, but they become less careful when they have an older model and they think that probably the new model of the car parked next to theirs will be the easier target for theft than their car, apparently because of the high value of the new ones. But they forget that those new models would be having all kinds of anti-theft devices installed in their cars and thieves would not like taking a risk with those models.
So if you are driving an older model, you have all the more reason to be more vigilant than others when you are parking your car at train stations, shopping malls or even outside your home. Some of the older models, such as Toyota Camry, Ford Falcon and Holden Commodores were most likely target for these thieves, though a part of the reason for high theft rate of these cars is also because there are more cars of these models on the road than other models.
One of the reasons why older cars are more prone to theft is that newer cars these days are equipped with various kinds of anti-theft devices, which are most likely not installed in older cars. They were either not installed in the first place or they went out of order and then were not replaced by the owner because of high cost involved. It is also mandatory since 2001 that all the new cars have an engine immobilizers installed in them.
However, this is not the only reason why older cars are the prime target for theft. Many cars that were hot sellers when they were launched a few years ago are also soft targets for thieves because many of these old model cars in the market needed replacement parts. Parts such as catalytic converters and various engine parts of these older models are in high demand in the market and this demand drives theft of these cars so that reselling these components in the market can fetch them good price.
Insurance is legally required – Pass the message loud and clear to young motorists
Many drivers, especially those between the age group of 17 to 20 are unaware of the fact that car insurance is a legal requirement and people may be convicted if they take an uninsured car on the road. In Australia, about 230,000 people are convicted every year for taking out an uninsured car on the road, and a majority among them is the youth.
It has been found from various researches that about 10% of youth mostly drive uninsured cars. This is basically because of two reasons - the higher premium rates of car insurance for young drivers as well as ignorance of the legal requirement of cars to be insured. High rates of premiums that are charged by car insurance companies dissuade young drivers to go for it. Young drivers are mostly students and have a tight monthly budget and are not very keen on cutting their expenses for paying high car insurance premiums. Most young drivers are also unaware of the legal requirement in this regard and also about possible consequences if they get involved in an accident while driving a car that is not insured.
The Environmental Transport Association (ETA) believes that the main reason behind youth driving uninsured cars is that law is quite soft in dealing with the offenders. Although, the cops have been given the power to not only seize, but also destroy an uninsured car, but with so many vehicles being quite low in value, it does not act as a strong enough deterrent for drivers committing the offence.
It has also bee found that most of the accidents involving young drivers occur in uninsured vehicles. Because most people in this age group are students, it is necessary that they be properly educated about this legal requirement. It will be better if this could be somehow integrated into the process of issuing the driving license. Such a move will make sure that whosoever has a driving license, knows the legal provision regarding car insurance.
At times, these young drivers are taking an uninsured vehicle out on the road because they are too confident about themselves and their driving skills. Probably due to their age, they are not afraid of taking risk without thinking about the consequences that might follow. To deal with such kind of drivers, some major changes in the legal provisions are required so that some really harsh punishment could be imposed on drivers, if they are caught driving an uninsured vehicle on the road, and an even harsher punishment if they get involved in an accident while driving such a vehicle.
Pay insurance premium as you drive
The usage based policy or the pay as you drive (PAYD) policy introduced recently in Australian car insurance market is a great boon for people who are infrequent drivers spending much less time on the road driving as compared to an average person. The traditional car insurance policy basically discriminates against those drivers who drive less and are therefore involved in less car accidents as compared to those who spend more time on the drive and are naturally involved in more number of accidents. This policy basically results into low-mileage drivers subsidizing the insurance cost of high-mileage drivers.
The PAYD policy is designed for people above the age of 25 years, with provision to roll over or get a refund of the unused kilometers. Even new kilometers can be purchased to top up the existing limit without much hassle just over phone. There is a discount in the premium if no claim has been made in the first three years after taking the policy. This policy has the potential to become extremely popular among infrequent drivers, as the new policy may end up in a substantial amount of saving.
This kind of policy has been introduced in a number of countries, with some variations. In some countries, the insurance premium is determined dynamically based on current usage, day and time the vehicle is taken out on the road, etc. Some countries also have a strictly kilometer-based policy, and companies use different methodology to monitor the car. In some cases, the cover is based on simply the odometer reading of the car, while in others, the car is tracked by a GPS device fitted in the car.
This concept is beneficial to the insurance company as well, because there is a better alignment of insurance premium with actual risk as compared to the traditional policy. However, you have to be a good driver to qualify for this policy, as the premium could go quite high if you get involved in an accident. If you are a careful driver, not used to speeding unnecessarily on the highways, then it is a good option where you can have a complete control over your insurance cost during a particular year, as the less you drive, the less you pay.