Tips To Avoid Car Insurance Premium Increases _ Becoming Ass

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Tips To Avoid Car Insurance Premium Increases _ Becoming Ass Powered By Docstoc
					by: Philip Franckel

Below are some tips to reduce your auto insurance bill, prevent substantial premium increases
and avoid becoming assigned risk.

Claim Reports: You know about credit reports, you should also know about claim reports.
C.L.U.E. (Comprehensive Loss Underwriting Exchange), is a claim report service provided by
ChoicePoint, Inc. ChoicePoint, Inc. states on their web site "C.L.U.E. is a claim history
information exchange that enables insurance companies to access prior claim information in the
underwriting and rating process. C.L.U.E. Personal Property reports contain up to five years of
personal property claims matching the search criteria submitted by the inquiring insurance
company. Data provided in C.L.U.E. reports includes policy information such as name, date of
birth and policy number, and claim information such as date of loss, type of loss and amounts

Tip: C.L.U.E. reports contain information on claims history by a residence address. Just like
credit reports, a C.L.U.E. report may have errors. It is advisable to obtain a copy of your
C.L.U.E. report at to check your report for errors.

Credit reports: Insurance companies are now looking at credit reports to determine future
premiums. They have determined that people with better credit scores have fewer claims.
Consequently, if you have a poor credit report you may find yourself paying more for car

Tip: Always make at least the minimum payment for your bills on time, particularly your
insurance bill.

Glass Coverage: Most auto insurance salespeople recommend "full" glass coverage for an
additional premium, when you purchase collision coverage for your car. They remind you how
much it costs to replace all your windows if broken by a vandal. What they do not tell you, and it
is unlikely that they would even know (I would only trust the answer from an underwriter, not a
sales representative), is whether your insurance company will use a previous glass claim to
increase your future premium and whether they will report your glass claims to C.L.U.E.

Some insurance companies will report glass claims to C.L.U.E. and then use these claims to raise
your premium or even worse, cancel your car insurance policy making you assigned risk with a
substantial premium increase. Allstate notified me that after four claims in less than five years,
they terminated my auto insurance policy and then offered to sell me coverage in their Indemnity
Company with a shocking premium increase. These claims consisted of two claims for a broken
windshield, one for a stolen and recovered car and one accident.

I had a sports car and had to endure a total premium increase over a period of four years of
approximately $12,000 and remain claim free before I became eligible for coverage outside of
the assigned risk pool. I wrote a letter to the president of Allstate complaining that they should
not have considered my glass claims when canceling my car insurance because the glass claims
were made under a separate part of the policy for which I paid a separate and additional
premium. Allstate responded in a letter stating "Although this claim activity does not indicate
that you were directly at fault in each loss, the frequency and severity of the above losses was not
within our range of acceptability. After careful review, I regret to inform you that we cannot
reverse our original decision regarding the above policy. We have however continued to offer
coverage in our Indemnity Company."

Tip: Check with the underwriting department of your insurance company to see if they will
consider glass claims when assessing premiums or if they report glass claims to C.L.U.E. If yes,
do not make a glass claim. The two windshields which Allstate provided me with were
aftermarket windshields which would have cost me less than $300 each. During the last 30 years
of my driving history, I have experienced two broken front windshields, one broken rear
windshield and two broken side windows. While the financial risk of totaling a car can be
substantial, the financial risk of replacing a windshield is comparatively insignificant. It does not
make sense to file a glass claim if it will increase your premium. You may even want to decline
this coverage altogether and save the premium.

Tip for leased vehicles: Some lease agreements require that the car be returned with an OEM
windshield. If you lease a car and replace a front windshield using your "full" glass coverage,
insist that the insurance company provide you with an OEM windshield from the manufacturer.
If you pay for the windshield yourself, check your lease agreement carefully to see if you must
use an OEM windshield from the manufacturer or if you can use an aftermarket windshield.
Some people with leased cars who have replaced a windshield with an aftermarket windshield
are shocked, when they return their car, to find that the leasing company is charging them $800
for a new OEM windshield, even though the aftermarket windshield is in perfect condition.

Car Rental & Towing Coverage: While it may be a good idea to have this coverage, it is not
always a good idea to use it. Some people have realized that this coverage is not just available
when an accident has occurred. For instance, some people have used the car rental coverage
when their car was in a repair shop or the towing coverage when their car broke down on the
road. As with glass coverage, using this coverage may be the same as filing a claim.

Tip: Check with the underwriting department of your insurance company to see if they will
consider rental or towing claims when assessing premiums or if they report these claims to
C.L.U.E. If yes, do not use car rental or towing coverage unless you have had an accident, in
which case it will be part of the accident claim. If you are concerned about towing costs when
your car breaks down, you can buy one of the roadside assistance memberships such as the one
available from AAA which provides additional benefits not provided by your automobile
insurance policy.

This article was posted on September 27, 2005

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