Does Gender Impact Auto Insurance Rates?

A few facts you need to know

If you drive a vehicle, as most people do, auto insurance is a fact of life. And everyone is continuously looking for ways to cut their rates. But there are some interesting facts that you may not know when it comes to gender and its impact on those rates.

Car insurance rates are based on various factors, including your age; the make, model and year of your vehicle; and both your driving history and driving record. Location is also crucially important, with insurance rates varying greatly by state. But gender can also impact your rates, with women generally paying less than their male counterparts. While this may seem unfair on the surface, when you dig a bit deeper you’ll see there’s a rationale behind this decision as well.

The Insurance Institute for Highway Safety notes that “Many more men than women die each year in motor vehicle crashes. Men typically drive more miles than women and more often engage in risky driving practices including not using safety belts, driving while impaired by alcohol, and speeding. Crashes involving male drivers often are more severe than those involving female drivers.”

A 2015 study from InsuranceQuotes found that a 20-year-old male will pay just over 20 percent more than a 20-year-old female. “At the end of the day, young men are less cautious, riskier, more distracted drivers,” the study notes.

According to a 2015 article in the Huffington Post, there are three states (Massachusetts, North Carolina and Hawaii) that don’t allow gender to play a role in the setting of insurance rates. Pennsylvania, Michigan and Montana apply the same set of rating factors to both men and women, so there’s no difference in rates in those states either.

There are a few things you can do to alleviate the insurance burden you’re facing; this is especially true for younger drivers who may feel the heaviest crunch of high insurance costs. There are good student discounts of around 20 percent for students who maintain at least a 3.0 GPA and take part in a Driver’s Ed course. If you don’t drive a lot, you can also consider a pay-as-you drive policy that factors in how far, how well and how often you drive. Making fewer small claims and shopping around to compare pricing can also keep your premiums low.

There are many things to consider when it comes to auto insurance rates, but the most important thing you can do is speak to your insurance representative and ask about the best ways for you to save. If you do your homework, you may be able to save big.

Used with Permission. Published by IMN Bank Adviser Includes copyrighted material of IMakeNews, Inc. and its suppliers.

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How the Type of Car Impacts Auto Insurance Premiums

What you drive affects how much you pay for insurance

When you’re buying a vehicle,CarTypeInsure_Featured there are many aspects to consider — comfort, fuel economy, technological features. — but one consideration that is often overlooked is potential auto insurance rates. And this oversight could be a very costly one, depending on the vehicle.

There are a variety of factors that go into determining a car insurance premium, even when it comes down to the vehicle type itself.

Size – It’s a common misconception that smaller cars often have lower insurance rates due to the fact that they have better maneuverability and ability to avoid a potential accident. In actuality, the opposite is true.

“Statistics prove smaller, sportier cars are driven at higher rates of speed by younger, riskier drivers. Because they’re involved in more accidents, they’re more expensive to insure,” reports Kelly Blue Book’s website KBB.com.

Does that mean larger vehicles like trucks and SUVs are cheaper to insure? Not necessarily. Bigger vehicles mean there is a larger potential to cause damage to other vehicles in the event of an accident, which inflates liability costs.

Price/status – KBB.com states that the cost of a vehicle is the first and primary consideration for most insurance companies when setting the price of the policy. Insurers’ rationale is typically that the more expensive the car, the more expensive it is to repair — namely when it comes to replacing parts, especially on foreign luxury vehicles, or when an entire vehicle is “totaled.”

Engine size – Speed comes back into play here, as the more horsepower a motor has, the more likely the car will be driven faster, leading to a higher risk of accidents. If motor size is not an important factor to you when choosing a vehicle, KBB.com recommends opting for a vehicle with less horsepower.

Likelihood of theft – This factor is somewhat arbitrary, as there can be any number of reasons cars get stolen, from overall desirability to demand for rare parts or even demand for common parts. Unfortunately, it’s those more desired vehicles that can carry with them higher insurance premiums.

The National Insurance Crime Bureau’s (NICB) most recent Hot Wheels report chronicles the most stolen vehicles in the United States. Honda Accord and Honda Civic were the top two most frequently stolen, respectively, in 2014. The list was also inundated with sporty imports due to their high desirability and to the fact that many are convertibles, and soft tops are relatively simple to break into.

Age – When it comes to used versus new in the fight for lower insurance premiums, you may be surprised that there is no clear-cut answer. It’s commonly believed that new vehicles will just cost more due to the fact that they’re new, but the advanced technological safety features and structure of new vehicles drive down those costs. Cars can now more easily avoid accidents before they occur and can also better protect their occupants if an accident does happen.

On the other hand, used vehicles aren’t always cheaper, due to their likelihood of theft.

“Newer cars may be more desirable but are actually targeted for theft far less often, as they are often equipped with anti-theft devices and GPS tracking systems,” auto information research site DMV.org discloses. “Also, car thieves tend to target older cars because they can easily disassemble them and sell their parts for profit.”

With so many varying factors affecting insurance rates, you are not likely to find one single vehicle with the lowest possible premiums. Instead, speak with your insurance provider for more information and guidance.

Used with Permission. Published by IMN Bank Adviser Includes copyrighted material of IMakeNews, Inc. and its suppliers.

How Car Insurance Varies by Location

Where premiums are highest and lowest, and why

If you’ve lived in differentCarInsurance_Featured states or regions of the country throughout your life, you may have noticed something about your cost of living — the price you pay for your auto insurance varies drastically by location. These differences are not arbitrary, however; several factors go into determining insurance rates:

Legal environment – “Next time you’re in your car driving down the road, take a look at the billboards. Do you see a lot of ads for what are known as ‘ambulance chasers?’” queries Gigi Douban of Marketplace.org.

Robert Hoyt, a risk management and insurance professor at the University of Georgia, explains that rates are higher in areas where residents tend to sue each other often, thus creating an ideal environment for lawyers who specialize in cases seeking damages for personal injury. Insurance companies track litigation rates, how often juries award for damages and other factors when setting insurance rates in any given area.

State laws – Varying insurance regulations also contribute to the difference. Hoyt says that in his experience, states in which drivers have the highest auto insurance costs are the no-fault states, meaning the insurance company covers your injuries in those states.

Population density – People in urban areas tend to pay more for car insurance. “The more cars, the more accidents that happen,” explains Laura Adams, senior analyst with InsuranceQuotes.

Other sociopolitical factors – The level of competition among insurance providers is another factor that is taken into consideration; think of it as supply and demand.

Also, Forbes reports that rates are costlier in states that have a higher-than-average percentage of uninsured and underinsured motorists (largely because of economic reasons) who cause crashes for which they aren’t covered and can’t pay. One other way prices can vary by state is if you are in an area prone to storms and thus storm damage. Rates increase if there was severe weather the previous year that produced more claims than normal the year before that.

Put into practice
A 2015 report from InsuranceQuotes shows that drivers from North Carolina, Wisconsin and Maine pay the least for auto insurance. North Carolina’s rates run 41 percent less than the national average, while Michigan’s rates are more than double that average.

According to Insure.com, Falmouth, Maine, has been known to boast the lowest premiums in the country, a fact largely accredited to relatively low traffic density, active competition among carriers, low crime rates and the absence of recent natural disasters.

“Many of these problems are outside the control of drivers,” says Amy Danise, editorial director of Insure.com. “But even if you live in an expensive state, you can hold down your insurance costs by keeping your driving record as clean as possible and selecting a car that is cheap to insure.”

Whether it’s automotive or anything else, stop by today to see if we have any insurance products that can be of assistance to you.

Used with Permission. Published by IMN Bank Adviser Includes copyrighted material of IMakeNews, Inc. and its suppliers.

What You Should Know About Car Rental Insurance

Factors to consider before, during and after renting a vehicle

Last year, automobilebankingon_e_a003034760 rental was a $24-billion-plus industry, according to Auto Rental News. Needless to say, a lot of people are renting cars. But do these individuals know what they should about the insurance they need for rental cars? Read on.

Properly preparing for a trip to the rental car counter sounds silly, but research is important! You wouldn’t want to make costly mistakes like purchasing coverage that you don’t need, or worse, not purchasing coverage that you do need!

There are, however, a few things you need to consider before you even rent the car. First, states have minimum age requirements for renters, and most major rental car companies won’t rent to someone under the age of 21. The younger the renter, the higher the rental rates. Additionally, some rental companies look into credit history and driving record before car pickup, so it helps to know if that is the case ahead of time.

Calls to Make
According to the Insurance Information Institute (I.I.I.), the first step anyone attempting to rent a car should take is to call your insurance company.

“Find out how much coverage you currently have on your own car. In most cases, whatever coverage and deductibles you have on your own car would apply when you rent a car, providing you are using the car for recreation and not for business,” the I.I.I. recommends. “If you have dropped either comprehensive or collision on your own car as a way to reduce costs, you will not be covered if your rental car is stolen or damaged in an accident.”

Insurance companies may also pay for administrative fees, loss of use or towing charges, as well. However, in most states, diminished value is not covered by insurers, so make sure to ask all the right questions.

Credit card companies also offer insurance benefits at times, but it always differs by company and/or bank issuing the card and the type of card. Other cars or property and personal belongings are not usually covered, but damage to or loss of the rented vehicle may very well be. Likewise, some cards cover personal liability coverage for bodily injury or death claims, but most do not – same with towing coverage, diminished value and administrative fees.

Policies are always changing, so call the toll-free number on the back of the card to find out exactly what kind of coverage is available to you. If you have multiple credit cards, call around to find out which offer is best. Request that the credit card company send you their coverage information in writing, if you do decide to depend on a credit card for insurance protection, instead of that from an insurance company. You may need that confirmation when picking up the vehicle. With all that being said, credit card benefits are usually secondary to the insurance offered by the rental car company or your personal insurance protection.

Types of Insurance
Insurance is regulated at the state level, so coverage and costs will vary. However, coverage options are generally similar nationwide:

Loss Damage Waiver (LDW)
An LDW is not technically a type of insurance. It is, however, a document that will relieve renters of financial responsibility if their rental car is damaged or stolen. These waivers may or may not provide towing and administrative fees and coverage for “loss of use,” in the event the rental car company charges the renter for the time a damaged car cannot be used because it is being fixed. Keep in mind that the waivers are voided if an accident is caused by speeding, driving on unpaved roads or driving while intoxicated. If, upon checking with your current insurance company, you deem the LDW necessary, it usually costs between $9 and $19 a day.

Liability Insurance
The state-required amount of liability insurance that is lawfully required to be provided by rental companies doesn’t provide much protection. Usually sticking with your own liability insurance will suffice, but supplemental insurance through the renter will run between $7 and $14 a day. A more cost-effective option may be to elect an umbrella liability policy.

“Umbrella liability insurance is so named because it acts like an umbrella, sitting on top of your auto and homeowners (or renters) liability policies to provide extra protection including accidents while driving your own car or one that you rent,” states the I.I.I.

For a million dollars’ worth of coverage, these policies typically cost $200 to $300 per year.

Personal Accident Insurance
This protection usually costs around $1 to $5 a day, and is used to cover medical and ambulance bills for injuries you or your passengers sustain in a car wreck. Current health or auto insurance may already cover this, as well, so be sure to check.

Personal Effects Coverage
This is insurance for the items in your car in the event of their theft. Through the rental car company, this coverage costs between $1 and $4 a day, but it’s not necessary if your current homeowners or renters policy includes off-premise theft coverage. Similarly, a “personal articles floater” under your homeowner’s policy protects valuable items such as jewelry and musical equipment both at home and while traveling.

Yes, there seems to be countless things to think about before renting a car, but if you do your homework, you can save yourself a lot of money that adds up during a trip. As a side note, keep in mind that there are special considerations for renting vehicles abroad, regarding both insurance and other factors, like needing an international driver’s license.


Used with Permission. Published by IMN Bank Adviser
Includes copyrighted material of IMakeNews, Inc. and its suppliers.