Auto Insurance Tips – Katy Insurance Agent


Every 27 seconds, somewhere a vehicle is stolen. Did you know that more than one million vehicles will be stolen just this year. What to avoid being a statistic? Follow these tips:

1. Install an antitheft device of some type. Audible alarm or some type of steering wheel locking device.
2. Never leave your car running or leave the keys in the ignition while it is unoccupied.
3. Keep your car doors locked at all times, especially when in the driveway, garage or parking lots.
4. If you have a garage, park your car inside and lock the car as well as the garage door.
5. Don’t leave purses, computer bags, phones, packages or anything of value in plain sight .
6. Always park your car in a safe, well-lit, and well-traveled area at night.
7. Have your vehicle identification number (VIN) etched and visible into the windows and major parts of your car. This makes your car parts harder to resell on the black market. Dealerships and body shops can perform this task for you.
8. When you park on the street, turn your wheels toward the curb, set the emergency brake, and try to park between other cars (this will make it harder for a thief to tow it)
9. Avoid parking your car in a long-term parking lots, even at the airport.
10. Remove any removable electronic devices (e.g. CD players, phones, IPods) upon leaving your car

Auto Insurance Facts You Should Know

Auto insurance can be extremely complicated and confusing. Making a claim can be a time consuming and emotionally draining process, but it doesn’t have to be. Here are 12 things every driver should know about your auto insurance policy and company. Complete understanding of these items saves drivers money, time and heartache in the long run.

1. How does your insurance company determine your car’s value after it’s declared a “total loss.”

Most insurers use three areas of information to determine the value of a car deemed a total loss: vendor quotes, value books such as Kelley Blue Book, and a market search of the local area. However, the local area isn’t specifically defined and an insurer may be unable to locate a replacement car within your neighborhood. If an insurer finds a replacement car outside of your living area, the valuation can be affected.

2. You may be entitled to payment for sales tax and registration fees for a new car.

Twenty-nine states require auto insurers to pay for sales tax when you replace your totaled vehicle with either a new or used car. How to handle this: Count on having to make the request; don’t depend on the insurer to offer to pay up front.

3. You may be entitled to a diminished value claim in some states.

Diminished value is based on the idea that any car that has been in an accident, regardless of how well the repairs are done, is worth less than the exact same car that hasn’t been in an accident.

4. You may be able to “stack” your coverage.

Stacking uninsured/underinsured motorist coverages means you can collect from more than one auto insurance policy that you hold. Most states forbid this practice, but 19 states either don’t address the issue or allow stacking.

5. How much making a claim could increase your rates.

Many insurance companies follow an industry standard of increasing your premium by 40 percent of their base rate after your first at-fault accident. So, for example, if the company’s base rate is $400, your premium will go up by $160. Not all auto insurers play by this rule, though, and some may increase your individual rate by 40 percent. Regardless of what formula they use, in the majority of cases, your rates will go up.

6. Your credit history can dramatically affect your auto insurance premium.

According to a 2001 survey of the top 100 insurers in the country by Conning & Co., 92 percent of responding insurers use credit information to create an “insurance risk score,” which they then use as a factor to determine your auto insurance rate. The theory is that there is a direct correlation between your insurance risk score and the likelihood that you will file a claim. Insurance scores are intended to evaluate your stability, meaning if you pay your bills in a timely fashion and have had the same credit accounts for long periods of time, you’re considered more stable than someone who pays late or sporadically and who opens and closes accounts frequently.

7. You must officially cancel your insurance policy when you switch insurers.

Most auto insurance companies state in your policy that you can cancel your coverage at any time by notifying the company in writing of the date of termination. However, most consumers assume that if they decide to terminate the policy at the end of the coverage period, all they have to do is ignore the bill. The insurance companies don’t see it that way. They will send you another bill for the next premium payment, and when you don’t pay it, the company will cancel you for nonpayment, which goes on your credit record.

8. You can wait to add your teenager to your policy until he or she is licensed.

In most cases, insurance companies don’t require you to add your teenager to your policy until they have their driver’s license. The exception may be if you are in a high-risk pool; you may then have to add your child when they receive their permit.

9. Paying in installments will usually increase your overall bill.

“Fractional premium” fees are usually charged when you divide your annual premium payment into installments rather than pay for a year of coverage all at once. Payments are usually offered on a six-month, quarterly, or monthly basis, but almost every insurance company charges an administrative fee for breaking up the payments. It can be as little as $10 per payment, but the more you break it down, the more it adds up.

10. How much your car model affects your premium.

You won’t get these numbers from your insurer; in fact, you may not be able to get them at all. But the auto insurers do have a premium rating system for every car model, based on ratings received from the Insurance Services Office. Cars are rated from three to 27, and the higher the number, the higher your premium. The ISO says it won’t release the numbers to the public because its employer is the insurance company, not the consumer.

11. You’ll pay for your friend’s bad driving.

If your friend borrows your car and crashes it, you’ll have to file a claim with your insurance company. You’ll have to pay any deductible that applies, and your rates will probably go up as a result of your claim.

12. Your personal property in your car isn’t covered by your auto insurance.

Stolen or damaged items like compact discs aren’t covered by your auto insurance.

Did you know your driving record affects Your Insurance Rate

Most states employ a type of “point” system, which is used to monitor your driving record. Usually, each infraction (moving violations, parking tickets, at-fault accidents, driving under the influence, etc.) is assigned a certain point value. When you are found guilty of one of these infractions, the appropriate number of points is added to your driving record. The more points you have, the worse your record.

Most of the time, an auto insurance company has the right to review the driving record of anyone who applies for an auto insurance policy from that company.  However, each insurance company handles this differently and employs a different method of evaluating applicants; therefore, the “points” you’ve accumulated may or may not have an impact on the your rates.

Once an insurance policy is issued, your provider has the right to review your driving record at any time (depending on your state). Only a few of the larger insurance providers have the resources or the inclination to run daily checks on driving records of every policyholder, so the frequency of these checks actually may be quite low. There are certain times that you can be sure an insurance company will check your driving record with the appropriate entities. These include:

  • First application for coverage
  • Request for changes to your policy (increased coverage amounts, etc.)
  • Upon adding or removing a new/different vehicle to your policy
  • Close to renewal dates

If negative information is reported on your driving record, there’s a pretty good chance your insurance rates will increase. Most insurers use a system based on the Safe Driver Insurance Plan, which is issued by the Insurance Services Office (ISO).

Auto Insurance Discounts

Most auto insurance discounts fall into three (3) categories.

1. Policy Discounts:

  • Coverage Selection – For people who own older cars, it may not be necessary or cost-effective to protect them with collision and comprehensive coverage. By comparing the book value of a car against its current premium combined with its deductible, it may make sense to drop some coverage. Another way to lower a premium is to select a higher deductible. The money saved annually could be significant, especially if the vehicle is never involved in an accident.
  • Consolidate – Most providers offer multi-policy and multi-vehicle discounts. Consolidating policies – combining car and homeowners insurance – offers convenience and can save both time and money. Additional discounts may also be available for people who have more than one vehicle insured with the same provider.

2. Vehicle-Related Discounts:

  • Choose a highly rated model – Do some research before buying a car. Industry agencies assign a rating to every car model based on historical collision, injury and theft claims, among other factors. The higher the rating, the more consumers will reduce their premium. Conversely, choosing a flashy red sports car with a lower rating can significantly raise a premium because insurance providers associate the model with more risk, due to the increased probability of theft and fast drivers.
  • Take preventative measures – Many providers award discounts to customers who take steps to protect their cars from physical damage and theft. By opting for anti-lock brakes, airbags, alarm systems and other security devices, consumers often can save significantly on their premiums.

3. Driver-Related Discounts:

  • Drive carefully – A clean driving record can save money. The more careful and experienced the driver, the less risk insurance providers take, therefore lowering the premium. Some insurance companies also offer discounts to policyholders who complete a defensive driving class.
  • Drive a friend to work – The premium also ties to how often a car is used. Discounts can apply to carpool participants, for example, because each individual’s car is at less risk than if they commuted separately. Commuter discounts also are available for car owners using public transportation because their vehicles will have lower annual mileage than if they drove to work each day.

Shopping For Affordable Auto Insurance

Many insurance companies issue automobile insurance, so there should be little trouble finding a good one. There are many shopping options when looking for insurance:

1.) Shop online to compare multiple companies and rates at once. You’ll save time and probably money as well, if you take the time to shop around.

2.) Contact a local insurance agent. You may want to look for an independent agent who can explain coverage and give you quotes from several companies. The best way to find a good agent is by asking for recommendations from people you know.

3.) You can also purchase insurance from a company that sells directly to consumers rather than through agents.

Remember that your profile will be a good fit for some companies but possibly not for others. This can result in quite a big variance in rate quotes. Shopping around will help you find the policy that’s right for you.

My Credit Affects My Insurance Rate?

You probably know that lenders use information in your credit report to determine if they’ll give you credit. But did you know that in some states, insurance companies also consider your credit history? Good or bad, your credit history may affect your ability to purchase homeowners or auto insurance coverage and help determine what premium you’ll pay.

For example, consider these scenarios:

  • Two years ago, you were unemployed for six months. Before you could find a new job, you fell behind on several credit card payments. Now your auto insurance rates are going up, even though you’ve never filed a claim against your policy.
  • You’ve always paid your bills on time, and you’ve always paid cash instead of applying for credit. Why could this be a problem? Similar to when you apply for a mortgage or credit card, your lack of credit history means you’re an unknown quantity – there is no history of monthly credit card payments.

Many people believe that only their driving record is important, but that’s simply not the case. The majority of auto insurance companies consider credit to be a very important rating variable.

Prevent Your Car From Being Stolen

Do you want to keep your car from being stolen? Here are various tips designed to head off car thieves.

  • Close car windows and the sunroof when parking your car.
  • Don’t leave a spare car key in the vehicle, because, Kelly warns, car thieves “know where to look.”
  • Keep in your possession your vehicle registration, proof of insurance, etc. “Your vehicle pink slip should be kept wherever you keep your valuable papers – (and) not in your wallet.”
  • Leave nothing with your name and address, social security number or other personal information in your vehicle.
  • Make photocopies of vehicle registration, proof of insurance and other important information for other drivers in your immediate family to carry.
  • Don’t leave your car with the motor running. A car left unattended and with the motor running is an open invitation to a thief. “Sometimes people on a cold morning warm up the car then race back inside to gather their belongings for work, then come out and find there vehicle is gone.”
  • Your car is safer in your driveway than on the street; but it’s even safer in a locked garage.
  • Park your vehicle on a well-lighted street and in well-traveled place if possible.
  • Turn car wheels sharply toward or away from the curb and set the brake.
  • Leave your car parked in first gear or in reverse if your car has a manual transmission. Use the parking gear if you have an automatic transmission.
  • Don’t tempt thieves by leaving items in plain sight on car seats or on the floor.
  • Burglar alarms and steering wheel locks, such as The Club, may help keep out thieves.