In my opinion, there are 3 main factors that affect my homeowners insurance rates: 1) Inflation, 2) Cost of Repairs (claim activity), & 3) my credit scores. And the same can be said for affordable auto insurance.
Other than doing your best to avoid the making insurance claims, your credit is probably the only other thing you have control over that affects your renewal rate. But wait, Nick. Don't we have insurance so that someone will pay our claims? Yes, but who deserves to pay less in premium? You, who has a claim, or the couple next door who have never placed one? I agree. They deserve to pay less. Read more of my opinion here...Tip from Nick: Always get an estimate on the damage before starting the insurance claims process; home or auto, find out the cost before contacting your insurance agent or insurance company.
How long do tickets, accidents, & claims stay on my record?
Some insurance companies look back 3 years, some look back 5 years. Typically, those that look back 5 years have very little, if any, charge for accidents or tickets that occurred during years 4 & 5. They simply want to know how you’ve been doing for the last 5 years. Does this driver recently have a DUI or a Driving On A Suspended License? Recently, meaning sometime over the last 5 years. Most companies only go back 3 years. Regardless, if your auto insurance renews in June, and your ticket/accident falls off in July, your auto insurance rates won’t reflect the change in your driving record until it’s next renewal date. The same goes for getting a new ticket/claim in the middle of a policy period - you will not see an increase in premium until the insurance policy renews. Read more about my opinion on this subject...
Tip from Nick: Obviously a good driving record saves money, but so does retaining risk. What I mean by retaining risk is not making petty claims. Fix your own windshield chips. I do! Got a scratch on your fender? Get it buffed out. Tree fall on your fence? Don’t make that claim. Retain risk and save money.
What information do I need to get an auto insurance quote?
Your current policy is the best starting point for information like your current coverage and vehicle information. Having the Vehicle Identification Numbers (VIN) is a must at The Gann Agency. We want you to know exactly what it would cost to have your auto insurance policy with us. Without VINs, and without driver’s license numbers we aren’t able to give you an exact amount. Affordable auto insurance quotes are tricky if you don't have the needed information. Some agencies won’t run your driving record until they issue the policy, only to have it come back with tickets or accidents that you forgot about, and a higher rate. Your social security number (SSN) is also needed for an accurate rate.
Tip from Nick: Don’t waste your time getting an auto insurance quote without offering your VINs, driver’s license numbers, and your social security numbers. Do you want an exact rate, or do you want an approximate?
Why do auto insurance applications include questions about my credit?
Companies have studied insurance claims and learned that customers with higher credit scores produced less claim activity. Credit scores aren't the only factor in determining insurance rates, but it is one of the top 4. Insurance companies aren’t allowed to ‘hit’ your credit. It’s called a soft hit. No repercussions on your score. Sometimes insurance companies will re-run your credit when your policy renews. This could cause your rate to fluctuate when you’ve had no tickets and no accidents.
Tip from Nick: knowing our credit scores helps us to understand why we're paying more, or less in insurance premiums.
I'm marrying someone who has a poor driving record. Will my auto insurance rates go up?
The truth of the matter is marriage reveals so much that we never think about: like credit scores and driving records. The problem with marrying into a bad driving record is that your auto insurance company may not want your spouse. It’s OK. Ask them to exclude him or her from your policy. This means they shouldn’t be driving your vehicle. Auto insurance claims occurring while they're driving your vehicle won't be covered. However, it’s not a horrible option - they can get coverage, just not from your company. Not all will allow the exclusion. Some may cancel your policy when they learn of your new household driver, the one with a bad driving record. There is a work-around. Don’t lose hope, just find a knowledgable insurance agent.
Tip from Nick: No, I don’t suggest you ask your fiance for an MVR, or a credit report. However, be prepared for the circumstances that may arise from having a new household driver.
Is a broken windshield covered under my auto policy deductible?
Yes. Some insurande agents may tell you it won’t affect your rate, and that is partially true. However, if and/or when you try to move to another company, guess what follows you, on your auto insurance claims history? That’s right. That windshield claim. Unless you have a high-priced windshield, don’t claim that on your insurance. The goal here is to keep your premium low. You can’t do that if you’re making small insurance claims.
Tip from Nick: Buy a windshield repair kit and learn to fix chips yourself. Shop for the best windshield replacement and pay for it out of pocket, unless your windshield is too expensive.
If someone borrows my car, are they covered under my auto insurance?
In the state of Arkansas, insurance not only follows the driver, but also the car. Let’s dig a little deeper. If your friend is driving your car, and they aren’t specifically excluded (you’d know it if they were) then your car has coverage, by your policy. If your friend has an auto policy as well then it will also cover your car in the event you don’t have enough coverage or don’t have the proper coverage. The insurance policy that lists the car (VIN) always pays first. Meaning the driver’s insurance only comes into play once the car’s insurance is exhausted or been denied. Insurance companies tend to not like this law. They only want to pay claims on those drivers listed on the policy. Most insurance companies require that anyone driving your car be doing so with your permission. This doesn't mean that you have to give explicit permission each time someone takes your car for a spin, but the person driving must have a reasonable belief that he or she is entitled to do drive and but not on a regular basis.
Tip from Nick: Be cautious when allowing others to drive your vehicle. Insurance companies charge higher premiums to those who have a driving record - they tend to drive in a manner that causes accidents/claims.
My teenager just got his license. How can I insure him without going broke?
Growing up, my dad always made me pay my auto insurance rates. It did a fairly decent job of reminding me to be a smart driver. Plus, I wasn’t in an expensive vehicle, and I didn’t need full coverage. Sometimes I wonder if those parents complaining about not having affordable auto insurnace are the same parents buying their youths an expensive car. The question is how can you insure your child without going broke: start with the vehicle you purchase for them, and maybe even for yourself. Just because you’re the listed driver on your Mustang doesn't mean your son or daughter will never drive it. Insurance companies know this, and charge you accordingly. Secondly, I would enroll your child in every driving course possible. Allow them to learn from experts on how to be a safe driver, which typically translates to ‘less expensive'.
Also, remember, the more friends he or she is allowed to drive around, the more liability for you, the parents. Insurance follows the car first, driver second.
Tip from Nick: Insuring your child without going broke starts with the vehicle they're driving. Give them opportunities to improve, through classroom settings and on-the-job training. Maybe even show them a video of just how bad auto accidents can be.
I am adding my son to my auto insurance policy and he'll be taking one of my cars with him to college. What do I need to do?
First and foremost be sure your child is listed as a driver on your auto insurance policy. Listed! Once your child moves to college they are no longer a family member living at home. This changes their status and removes the coverage afforded to them as a household member - unless they're listed. The college move is a fairly simple base to cover, especially if they've been listed as a driver all along. This is just another reason why it’s important to have a good relationship with a knowledgable insurance agent.
Tip from Nick: When in doubt ask your agent. Always give full details of your current situation. After an accident occurs is not the time to learn you have no coverage.
Why was my insurance claim denied?
Chances are you didn’t have coverage for whatever caused the damage. This changes the question from "Why was my claim denied?" to "Why didn’t I have coverage for that?". If truth be told, most agents simply don’t know all a policy covers, or doesn’t cover. Should they know? Absolutely! Can they easily find out? Yes. Insurance companies (the folks who write the claim check) take most of the blame when claims don’t turn out the way a customer thinks it should. It’s very seldom that it’s the companies fault. The insurance agent (the person you visit) is almost always where the blame should fall. If the agent had told you up front that you had no coverage if a raccoon chewed a hole through your roof then you would know the company isn’t doing you wrong. If you find out this type of information after the claim happens, then of course you’ll blame the company, and not the agent.
When it comes to homeowners insurance claims, I’ve seen claims denied because the house was left vacant for over 60 or 90 days. This is considered neglect. Insurance companies won't pay for neglect, which also includes faulty workmanship. If you’re going to hire a roofer, you should be sure they have insurance. The same goes for any other person or business you hire to do work on your behalf (i.e. mechanic, yard maintenance, etc).
I once busted a car windshield with a rock from my mower. If I had chosen not to fix that windshield, the homeowners association would have been required to pay that auto insurance claim. Reason: I was mowing their grass, making them vicariously responsible for that windshield.
Tip from Nick: Telling you to choose a knowledgeable insurance agent is a no-brainer, but we so often assume we have one, when we rarely do. Insurance is an industry in which you put your assets in the hands of others. Ask your agent to email you a list of 10 things that are covered and 10 that aren’t. This list will strike a conversation that should have happened before you purchased the policy.
I'm buying a new vehicle. Am I covered when I drive off the lot?
The Arkansas Department of Insurance has a couple laws that really help out when current insurance customers are trading in or simply adding a vehicle. As a consumer with a current auto insurance policy, we are given 14 days to add a vehicle that has not been traded for (meaning we didn't trade in a vehicle, we simply purchased another vehicle). During that 14 days we have the best coverage listed on our policy. If you have full coverage on any particular vehicle listed on your policy, that is also what you'll have on the new vehicle, for 14 days. If you only have liability on your currently listed vehicles, you'll have full coverage for 4 days, and then liability only for the remaining 10 days. After the allotted time, you'll only have coverage once you request coverage.
If you're trading in a vehicle, you are not required to add it to your policy. It is covered with the exact same coverage of the vehicle you traded in. You will need to make the change at your policy renewal date.
Tip from Nick: add the vehicle at your earliest convenience, not to exceed the 4 or 14-day mark. Just know, as long as you have liability or full coverage, you do have at least 4 days of full coverage when purchasing a vehicle, regardless of your insurance company knowing.