Category: Personal

Rising gas prices are forcing consumers to give up their SUVs and pickups in favor of smaller, more fuel-efficient cars. On the one hand, this shift will greatly reduce the number of rollover incidents, a risk that accounts for 25 percent of all traffic fatalities each year. On the other hand, some experts, such as those at the Insurance Institute for Highway Safety, feel that the growing number of smaller cars on the road poses even greater risks. That’s because over 40,000 people were killed on U.S. roads in traffic-related accidents in 2006, according to the National Highway Traffic Safety Administration (NHTSA). A little less than 18,000 of those victims were riding in passenger cars at the time of the accident.

Certain design features of smaller cars place their occupants at greater risk in the event of a crash. These cars are lighter and more flexible, which means they bend more easily upon impact. In fact, when a small car hits a fixed-object like a telephone pole with its front-end, especially at a high speed, it can cause such a deep intrusion, that the engine can be pulled from its mounts, and hurled through the firewall towards the occupants.

To prevent this hazard, automakers are learning how to make smaller cars stronger. The first priority is to find ways to maximize the amount of energy they can absorb in crashes, so that they will be less resistant to severe damage upon impact. One method is to design these cars using higher-strength steel. The other alternative is to use materials like aluminum and forged alloy. While these materials have the strength of steel without the weight, the downside is they are far more expensive. The situation is further complicated by the fact that the learning curve for developing these structural changes is extremely long, which means that it will be a quite some time before these improvements are available to the public.

Although they have design flaws that make them vulnerable in high-speed collisions, smaller cars have some features that actually give them an advantage over larger vehicles. Smaller cars are more likely to avoid accidents than heavier ones because they can stop more quickly and are easier to maneuver. They are also equipped with collision avoidance technologies that are designed to prevent the car from becoming involved in a traffic accident.

You’ve probably seen countless TV ads for lawyers who help car accident victims “get the money they deserve.” Critics often refer to these attorneys as “ambulance chasers,” accusing them of preying on accident victims.

However, sometimes it’s necessary to work with a lawyer to resolve car accident issues. Unfortunately, most drivers don’t know when they should contact a lawyer after a car crash. Do you really need to dial up an attorney every time you get into a little fender bender? What if you are seriously injured?

For example, let’s say a vehicle slams into your car as you drive through an intersection. You wake up in the hospital with a lawyer at your bedside pestering you to sign a contract with him. Soon after, the other driver’s insurance company calls urging you to settle with them. Should you sign the contract with that bedside lawyer? Or should you go at it alone, spending weeks or even months arguing with the insurance company until you get the money to cover your medical bills and vehicle damage?

Here are some tips to help you determine whether or not you should retain a lawyer involved after an accident:

• Hire a lawyer if you have to stay overnight in the hospital or if you suffer from any serious injury as a result of the accident. This could include permanent scarring, loss of a limb or loss of bodily function (such as excessive back or neck pain or a knee injury). You should also hire an attorney if you require long-term care as a result of your injuries.
• If you simply don’t want to negotiate with the driver’s insurance companies, you should consider contacting a lawyer.
• You may also want to consult with an attorney if the police report does not clearly state which driver is at fault.
• If you are not seriously injured, do not require a visit to the hospital and the police report clearly states who is at fault for the accident, it’s probably not necessary to contact a lawyer.

If you do decide to hire a lawyer, don’t simply go with the first lawyer who chases down your ambulance or shows up in your hospital room. Find a lawyer who you feel is trustworthy and experienced, or contact an attorney recommended by a friend or family member. If the lawyer seems desperate and pressures you to sign a contract, you may want to look elsewhere. Don’t discount free legal help—oftentimes, these can be the most dependable lawyers.

Also, don’t believe the television commercial hype that accident lawyers can win you hundreds of thousands of dollars. Although a lawyer may be able to get you a relatively large sum of money, remember that a large portion of that will go toward legal fees.

If you decide not to hire a lawyer, you’ll be on your own when it comes to dealing with insurers. Here are some things to keep in mind:

• After the accident, be sure to get a copy of the police report.
• Call your insurance company as soon as possible. Your agent can give you advice about what steps to take next and help cover your expenses if the other driver doesn’t have insurance.
• Take thorough notes and keep a record of everyone you talk to and when you spoke with them. This includes insurance representatives and doctors.
• Be sure to get a claim number from the insurance company, and include that number on any correspondence with the insurer.
• If the other driver is at fault, get his insurance information and call the company immediately. Tell his insurer that you want to file a third-party claim. They will probably ask you to describe the accident—remember to be very careful with your description. Simply state exactly what happened, and do not make any assumptions. If you change your story, they may try to claim you are at fault.
• If an insurer pressures you to settle your medical bills at the same time you settle your auto claim, do not give in unless you are certain your medical treatment is final. Once you settle your medical claim, you will be responsible for paying any future medical bills associated with your accident injury. Depending on the laws in your state, you may have three years or more to settle a personal-injury claim.

Hopefully, you will never have to walk through these steps—but it’s wise to be prepared for any type of accident.

It’s no secret that the price of gas is exorbitantly expensive right now. Although the cost per gallon is finally starting to decline, fuel is still far pricier than it was in past years. Outside of hanging up your car keys for good, how can you possibly keep from going broke? If you’re strapped for cash, follow these rules to make the most out of every last drop of gas. With these techniques, you could get up to 20 more miles per tank.Be an easy rider:Driving “gently” can help you conserve gas. If you accelerate quickly, brake suddenly and drive aggressively, you could decrease your fuel economy by up to 33%! This kind of forceful driving can add more than a dollar to each gallon when you fill up your tank.Look 30 seconds into the future:Pay close attention to the road. If you keep your eyes moving and continually scan the road ahead, you’ll know early on when you’ll need to brake. Some experts say you should constantly check the road that is 30 seconds ahead of your car. That’s about a block in the city or half a mile on the highway.This allows you to plan ahead so you won’t have to make sudden aggressive maneuvers at the last minute. For example, if you see a light turning red up ahead, go ahead and start easing off your accelerator so you won’t have to make an abrupt stop at the intersection. If you slow down for long enough, the light may be green by the time you reach it, which means you won’t have to brake at all.Give your engine a rest:Turn off your car whenever possible. Experts say that idling for just one minute uses up more gas than turning off and then restarting your car. So, if you’re waiting at the fast food drive through or the bank for even a minute or two, go ahead and turn off your car.Watch your speed:Driving slow may not be fun, but it can certainly save you some gas. Cars generally reach their optimum fuel efficiency between 45 and 60 miles per hour. Once you accelerate to over 60 mph, your engine has to burn much more fuel to keep the pace.Some studies have shown that every 5 mph increase you drive over 60 mph adds about 20 cents to your gas price tag—and that estimate is based on a $3.22 per gallon model, so it adds up to even more right now.Keep cruising:You can also conserve fuel by maintaining a steady speed. When used correctly, cruise control can boost fuel economy by up to 14% on the highway. This is because every tiny pressure change you make to your accelerator—even slight changes that aren’t registered by your speedometer—can burn up more gas.If you maintain a precise speed with cruise control, you’ll avoid these small accelerator movements and save more gas. However, cruise control won’t work if you’re sitting in bumper to bumper traffic. In heavy traffic, your constant braking and speed changes can burn up a lot of gas. If at all possible, take a route with less traffic so you can sustain a steady speed. Of course, traffic is pretty much unavoidable in many cities.Take the most direct route:We all know that shortest distance between any two points is a straight line. But did you know that driving in a straight line can actually save you gas? By taking the shortest and most fuel efficient route from point A to point B, you’ll burn up much less fuel. You should also drive as straight as possible on the road—if you constantly switch lanes on the highway, you’re wasting a lot of gas. When necessary, try to make smooth, gradual lane changes.Look out for hills:If you know you are approaching a hill in the road, build up your speed before you reach it. Try to maintain your speed as you ascend the hill by gradually accelerating. This will help you prevent full-throttle acceleration, which burns up excessive amounts of gas.Don’t lock out overdrive:The typical car with a four or five speed automatic transmission has overdrive as its highest gear. Overdrive allows the car to maintain steady highway speeds above 45 mph without making the engine work so hard. You should only lock out overdrive if you’re towing something and need extra torque or in other rare circumstances. However, if you want to save fuel on the highway, leave the overdrive button alone.Consolidate trips:Try to consolidate car trips whenever possible. For example, if you know you need to go to the grocery store and the post office, don’t split these up into two different trips. Take care of as many errands as possible in one run.Whenever possible, walk or ride your bike, especially if you’re traveling somewhere just a couple of miles from home. Not only will this keep you healthy and fit, but it will also help you save loads in gas money.

If you’ve recently gone somewhere on vacation and your car did not have a Global Positioning System (GPS), you probably wish it did. GPS systems have become increasingly popular as their prices have dropped. Navigationally challenged drivers who used to decipher hard-to-read maps can now rely on these small devices to help them reach their destinations. However, the popularity of GPS devices makes them particularly attractive to thieves. They are also susceptible to damage in car crashes, like any other item in a car. How will an auto insurance policy cover a stolen or damaged GPS?

Unfortunately, standard policies provide little or no coverage for a GPS. Many older policy editions explicitly state that they do not cover losses to any electronic equipment that receives or transmits data signals. A GPS would seem to fall within that description. More recent policy editions do cover electronic equipment, but only if it is permanently installed in the vehicle. These policies provide a small amount of insurance for electronic equipment; $1,000 coverage is typical.

It is possible to buy additional coverage for GPS devices. Any car owner with equipment worth more than $1,000 should speak with her insurance agent about buying a special policy form. It increases the coverage to a specific amount shown on the form. Typically, insurance companies will not offer more than $5,000 coverage.

If the policyholder has an older edition of the policy, she will need a different form to cover a GPS. This form covers sound reproducing equipment; audio, visual and data electronic equipment; and tapes, records and disks while in a vehicle. A GPS device falls within the data electronic equipment category. Coverage applies if the unit is permanently installed in the vehicle or if it is removable from a permanently installed housing unit, designed to be powered solely by the car’s electrical system, and in or upon the car at the time of the loss. The form provides coverage for devices in cars the policyholder owns and those she rents or borrows. As with the other form, she can buy coverage in amounts up to $5,000.

The additional premium for this coverage is normally small. A rate of $4 for every $100 of coverage is typical. For example, the cost for $2,500 of coverage might be around $100.

As car buyers ask carmakers to add more and more gadgets to cars, insurance coverage for those gadgets will continue to evolve. It is unwise to assume that an insurance policy automatically provides much coverage for these gadgets. All insurance buyers should carefully review their policies and ask their agents questions if GPS coverage is a concern. With a GPS and the right insurance coverage, a driver can be confident that she’s going in the right direction.

Roy is a retiree who owns two cars – one that he drives during the winter, the other for the warmer months. He keeps license plates on only one car at a time. When the time comes to take one off the road and put the other one on, he visits his local motor vehicle bureau’s office, fills out a form and transfers the license plates. Last spring, he phoned his car insurance agent on a Tuesday and informed the service representative that he would be switching the plates that Friday. He asked her to remove coverage from the old vehicle and add coverage to the new one, with the changes to take effect on Friday. The service rep ordered the policy change as he requested.

On Friday morning as Roy drove to the motor vehicle bureau, he changed lanes without checking his blind spot. His car struck a vehicle in the right lane, damaging it and his car. He notified his insurance agent at once, the agent notified his insurance company, and the company promptly told him that he had no coverage. Roy, already not in the best of moods, demanded an explanation.

Why did Roy not have the insurance coverage he expected? The answer lies in the instructions he gave his insurance agent. The standard practice in the insurance industry is for coverage to both begin and cease at 12:01 AM on the effective date. For example, an auto insurance policy that takes effect on January 1, 2009 will state on its information page that coverage will begin at 12:01 AM on January 1, 2009 and end at the same time on January 1, 2010. Further, when an insurance company sends a formal notice to a customer that it is canceling his policy, the notice always states that the policy will cancel at 12:01 AM on the specified date. The purpose of this is to set clearly defined moments when coverage begins and ends. By setting the time at 12:01, there can be no doubt as to the date when that moment occurs.

When Roy asked his agent to remove coverage from the first car on Friday, his insurance on that vehicle ended at 12:01 AM Friday. Unfortunately, he was still using it; his accident occurred several hours later. Unbeknownst to him, he was driving an uninsured vehicle at his own request.

This problem is not limited to auto insurance. Suppose John and Mary Smith are selling a house and buying another one. Closings on both sales are scheduled for June 15. If John and Mary cancel the homeowner’s insurance policy covering the first house effective June 15, they are without coverage on it after 12:01 AM, even though they have not yet closed on the sale. If a window were to break in the early morning hours and allow rain to enter the house and damage carpeting, John and Mary have no insurance to pay for the new carpeting their buyers will expect.

Anyone selling a house or a car or taking a car off the road should ask the insurance company to remove coverage the day after the sale. He needs coverage on the property while he has ownership, even if it is only for a fraction of the day. If he has any doubts about the right time to remove coverage, he should discuss it with his insurance agent. While he may end up paying for insurance that he doesn’t need for a few hours after he sells the property, it is a small price to pay for avoiding an uninsured loss.

With the soaring cost of gasoline, many people are seeking more economical ways of getting around. Increasingly, people are car-pooling or taking the bus. Many city dwellers rely solely on mass transit and taxis to get around; they rent cars whenever they need to take longer trips. In at least 20 American cities, car-sharing clubs have sprung up. These clubs own vehicles that are available for hourly rentals to club members. The idea is to give people who occasionally need a car access to one without the cost and inconvenience of ownership.

In all of these circumstances, people retain the option of driving when the need arises. This is not a problem if nothing goes wrong. However, what happens if someone has an accident while using a car-sharing club vehicle? Who will pay for the resulting injuries or damage? The driver will likely assume that the vehicle’s owner has insurance to pay for any damages, and that may be true. However, there are some good reasons not to rely on the club’s insurance:

• The club may fail to pay the premium on its policy, causing the insurance company to cancel it.
• The club may fail to inform the insurance company that it has purchased the vehicle the member is driving. There is no guarantee that the club’s policy automatically covers newly acquired autos.
• The club may fail to comply with a policy condition, giving the insurance company justification for denying the claim.
• The club’s policy may exclude coverage for that particular loss.
• The club’s insurance limits may not be high enough to fully cover the loss.

In truth, the driver of one of these vehicles has no control over the amount and terms of the club’s insurance, nor can he control the club’s actions in the event of a claim. These same issues will apply if he rents a car or borrows one from a friend. What is the occasional driver to do? Strange as it may sound, he should consider buying an auto insurance policy.

Insurance companies can offer auto insurance with a special policy change titled Named Non-Owner Coverage. This policy provides coverage for specifically named individuals when they use vehicles not ordinarily available to them. A standard policy written for a car owner already has this coverage, but a policy for someone who doesn’t own a car must include the special form. The policy covers the driver for:

• His liability for injuries or damage to others,
• Medical payments for relatively minor injuries he suffers while using the car, and
• Major injuries he suffers in accidents with uninsured or underinsured motorists.

Coverage requirements may vary from one state to another, so it is advisable to check with an insurance agent about the coverage in your state. Should the policyholder buy a vehicle, the policy insures the vehicle for these coverages automatically for 14 days.

It is important to understand that the liability insurance this policy provides will pay only after the vehicle owner’s liability insurance is used up. It also does not insure other family members unless it specifically lists their names. Finally, it does not insure the vehicle for collision or other causes of physical damage. An insurance agent can explain options for insuring these types of losses. Because of these coverage limitations, however, the cost of the policy may be relatively inexpensive.

Operating a motor vehicle is always risky, whether the driver owns, rents or borrows the car. Car accidents can be financially devastating. All who plan to drive at some point should make sure they have proper and adequate insurance backing them up.

Parents of teens and young adults know the pattern all too well. A child hits the magic age when he can finally get a learner’s permit to drive. After multiple tries, he passes the driving test and gets his license. Mom and Dad open their wallets and tell the insurance company about the new driver. Their insurance policy covers him during high school, while he’s in college, and while he’s back home. At some point, however, he moves out on his own for good. Maybe he moves to a city with convenient mass transit, and his job doesn’t pay well enough for him to buy a car, so he goes without.

One day, he asks out that girl in the accounting department he’s been flirting with for a month. Meeting her at a subway stop just won’t do, so he grovels at the feet of the best friend with a new set of wheels. The friend, though appalled at the shameless pleading, agrees to lend him the car. Young Romeo picks up his date, pulls out into traffic, and rear-ends a Lexus at the first red light. Flustered, he pops it in reverse and backs hard into the BMW behind him. Two questions immediately come to his mind: 1) Will she still want to go to the movie? and 2) Does he have insurance coverage for this little adventure?

Bad news for Romeo: His date takes a cab home and his friend sort of forgot to pay his car insurance bill; the insurance company cancelled the policy. Then he gets an idea: It hasn’t been all that long since he lived with Mom and Dad. Maybe their insurance will pay for the repairs.

Every insurance policy has specific descriptions of who the insurance company will cover. The standard Personal Auto Policy published by the Insurance Services Office says that the person whose name is on the policy and any “family members” have coverage for the ownership, maintenance or use of any auto. Maybe Romeo’s in luck.

Maybe not. The policy also has a specific definition of the term, “family member:” A person related to the person named on the policy. The family member must be related by blood, marriage or adoption and must also be a resident of the other person’s household. Romeo has moved out of his parents’ home, which is why he got the job, met the girl, borrowed the car and had the double dent-fest. Is he still a resident of his parents’ household?

Chances are, the insurance company will decide he’s not, and it may have the law on its side. A California court ruled in 1975 that an adult son who lived in a separate apartment on his parents’ street and who relied on his parents for financial support was not a resident of the parents’ household and not entitled to coverage under their auto insurance.

Circumstances may change the answer. Courts have recognized that college students, though they live elsewhere the majority of the year, are still residents of their parents’ household. A self-supporting child who lives in her old bedroom and pays rent to her parents also qualifies as a resident.

It’s when the move away from home looks permanent that the break in coverage may occur. Even if she doesn’t own a car, she should consider buying an auto insurance policy with a special coverage called Named Non-Owner Coverage. This will cover her liability for injuries or damage she may cause while renting or borrowing a car. Coverage will apply after other available insurance (such as the car owner’s coverage) is used up.

And, while it wouldn’t have salvaged Romeo’s date, it would have saved him a whole lot of money.

If you have a need for speed and buy a small, sporty car that can burn up the road, you’ll likely face higher insurance premiums. Research shows that small cars are more accident-prone because owners of sporty models drive their cars in ways that make them more vulnerable to crashes. The other reason is that younger drivers who love taking risks typically buy them because they are affordably priced.

Every year, the Insurance Institute for Highway Safety examines statistics concerning the insurance losses associated with the most popular vehicles. Since insurance companies use similar yardsticks to set premiums, knowing what a car will cost to insure prior to purchase may save you from making a costly mistake. This year, the Institute rated the Subaru Impreza WRX, the Hyundai Tiburon, the Mitsubishi Lancer, and the Scion tC among the top 5 most expensive cars to insure.

Surprisingly, the car that heads the Institute’s list, the Cadillac Escalade, is a luxury SUV usually driven by a more affluent and older driver. So what makes this vehicle so expensive to insure? Car thieves love it. The car has developed a cult status because of its association with pop culture icons, making it so desirable among thieves, that comprehensive coverage of this vehicle costs six times the national average.

Of course, when you talk about the most expensive cars to insure, you eventually get around to a discussion of the least costly to cover. If you’re looking to cut your insurance bill, look for the current version of what used to be known as “the family car.” Cars in that class are usually large sedans, mid-size SUVs, and minivans. Those who drive these “family cars” have a reputation for cherishing safety. These cars are also rarely found in the commute and, therefore, avoid the risks associated with rush hour. Some of the cars considered the least expensive to insure include the Buick Rendezvous, the Subaru Outback, the Honda Pilot, and the Chrysler Town & Country. The Ford Taurus, a medium-sized sedan, tops this list. Insurers favor Taurus drivers because they prize safety above everything else. Cars like the Taurus are tucked away in garages when not in use, lessening their risk of being stolen. In addition, car thieves typically do not seek out these kinds of cars, increasing their value to insurers.

Before you buy your next car, consider the following tips:

• Ask your insurance agent if any of the models you are considering have premiums that are substantially different.
• Find out if any of the models have high repair costs or theft rates.
• Avoid more expensive cars because they usually come with a higher insurance bill.
• Shop safety. Look at crash tests results, rollover ratings, recalls, service bulletins, and consumer complaints.

If you were a car thief, which car would appeal to you? A shiny, new Cadillac with a navigation system, alloy wheels, and DVD player or a 13-year-old junker with peeling paint, a stick shift transmission and 200,000 miles on the odometer? You’d probably pick the Cadillac, but a legitimate car thief wants the junker. At least that’s the word from the National Insurance Crime Bureau’s “Hot Wheels 2008” auto theft report which ranks the most stolen vehicles in 2007. Leading the list for the fourth year in a row is the 1995 Honda Civic, followed by the 1991 Honda Accord. 

What may seem like to junk to you is considered gold to car thieves. Although your junker may not be worth much as a whole, its individual parts — engine, transmission, sound system, airbags, etc. — when sold individually are worth a lot on the street.

For 2007, the most stolen vehicles in the nation were:

1. 1995 Honda Civic
2. 1991 Honda Accord
3. 1989 Toyota Camry
4. 1997 Ford F-150 Series Pickup
5. 1994 Chevrolet C/K 1500 Pickup
6. 1994 Acura Integra
7. 2004 Dodge Ram Pickup
8. 1994 Nissan Sentra
9. 1988 Toyota Pickup
10. 2007 Toyota Corolla

To protect their investment, vehicle owners are urged to follow NICB’s “layered approach” to auto theft prevention by employing simple, low-cost suggestions to make their vehicles less attractive to thieves. Following are NICB’s four layers of protection:

• Common sense — The cheapest form of defense is to simply employ the anti-theft devices that are standard on all vehicles — locks. Lock your car and take your keys.
• Warning device — Having and using a visible or audible warning device is another way to ensure that your car remains where you left it.
• Immobilizing device — “Kill” switches, fuel cut-offs, and smart keys are among the devices which are high and low tech, but extremely effective. Generally speaking, if your car won’t start, it won’t get stolen.

Tracking device — Some systems use GPS devices to track your vehicle. Others use radio frequency technology, which helps law enforcement track and recover it quickly.