Cheap Car Insurance Isn't Always What It Seems
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Added: 31-01-12
- It is becoming apparent than car insurance companies are secretly blacklisting certain postcodes which is why honest motorists are facing soaring premiums as a 'fraud epidemic' sweeps the country.
Motorists have seen a record 40% hike in premiums over the past year, with the average annual comprehensive policy forecast to break the 1,000 barrier within the next 12 months. Car insurance companies say a major reason for this increase is fraudulent claims that are estimated to cost 2.7bn a year, adding 44 to the annual premium of honest motorists.
Common frauds include staged accidents where more than often gangs are involved, bogus injury claims - whiplash being the most common and fronting, where parents cut costs by claiming they are the main driver on an insurance policy for their child's car.
3. Marital Status - regardless of driving history, married people would still pay less car insurance premiums compared to single people.
Birmingham is the worst 'blackspot' and generates almost one in ten of the suspicious claims. This compares with fewer than one in a hundred in West London. This analysis, which is given to car insurers, also shows huge variations within individual towns and cities. For example, the postcode B8 - east of Digbeth in Birmingham - generated almost 13% of suspicious claims in the city. Meanwhile, B15 Edgbaston in Birmingham accounted for just over 1%.
The chief executive of Brake said, "The Government must do more to make drivers aware that their medication may make them unsafe behind the wheel. There needs to be clear warnings on all prescription and over-the-counter medicine. As we start the hayfever season drivers need to be aware that by taking what seems to be an innocent anti-allergy tablet they could be putting lives at risk. If you think your driving may be impaired as a result of taking medication then the message is simple; don't risk it."
Hopefully, action will be taken quickly to prevent these ridiculous premiums, in the mean time it is recommended that young drivers look into taking the Pass Plus course which can reduce premiums. It is also advisable to start with a car with a small engine which should ensure the car fits into a lower insurance bracket from day one. Other tips to reduce
Here at CoverGirl Car Insurance Services, we spoke to several people who had been involved in near misses after taking medication for their hayfever allergies. Here is what one of them had to say:
4. Accident Claims - car insurance rates certainly, when you have more car accident claims under your belt, then you're more likely to pay higher insurance compared to those who've clean records.
Some insurance companies take a drivers' credit history into account when configuring the car insurance quote. If you have a low credit score, it is more likely that you will stop making payments on your insurance. However, once your credit score is factored in, most people end up with a lower rate
Last but not least, keep a box of tissues handy in your car to prevent a runny nose. You never know who might be parked by your side at the next set of traffic lights!
Each state has set the required minimum level of insurance coverage, here in California it is $15,000 per person injured, a maximum of $30,000 per accident and $5,000 property damage liability. These limits are very low. Emergency medical services are very expensive and $5,000 worth of damage can be exhausted in a very minor fender bender between two relatively new vehicles. It is a serious mistake to maintain these low coverage levels. You could face a serious financial collapse if you find yourself paying out for medical bills and property damage as a result of being under-insured. Being under-insured could make you vulnerable if another driver decides to sue after an accident.
7. "Insurance companies make up their prices and charge whatever they want."
Insurance companies are required to describe how the rates are calculated and then the rates must be filed for review and for approval or rejection. Any increases or decreases must be filed through the state of California department of Insurance for a review and then the rate is accepted or rejected.
8. "My insurance covers any car I drive."
Some insurance polices, called broad coverage policies, transfer coverage to a vehicle that is made available to you on an incidental basis. Every policy is different. Some companies only transfer the car insurance rates minimum state liability requirements while others are a true broad coverage policy that transfers your specific liability limits. However, many insurance policies are restricted policies or named-operator insurance policies that only cover the named drivers, everyone else is automatically excluded and coverage is not afforded.
9. "If my car is stolen, my insurance company will pay off the loan."
If you bought GAP Insurance when you bought your vehicle, this is true. However, if you have comprehensive insurance and your car is stolen or totaled in an accident, the insurance company will establish the fair market value of your pre-accident vehicle and pay you the actual cash value. This estimation excludes finance charges, interest rates, licensing fees, taxes and other charges you may have accrued throughout the lifetime of your loan.
10. "My insurance company will pay for my car rental."
Your insurance company will not pay for your car rental unless you have purchased car rental expense. This coverage is typically sold only in conjunction with comprehensive and collision coverage.
It is important to read and understand your insurance policy. It is also important to ask questions and address your concerns to your car insurance rates agent.
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