Beating the Rate Hike on Car Insurance

Gas prices are down by a third from a year ago, but the costs of owning a car may be heading up, courtesy of your auto insurance. After two years of staying flat, rates rose an average of 2.5 percent in 2008 and could rise up to 7 percent this year—the biggest increase in more than five years, according to brokerage firm Stifel Nicolaus. Some tips to avoid the jump:

Bargain hard
Insurance companies may refuse to budge if you ask for a rate rollback. But “there’s always room to bargain,” says Michael McRaith, director of Illinois’s insurance division. One thing your underwriter might do is apply new discounts. Some carriers offer discounts for professional degrees—even a master’s in education may qualify—while others may apply a “persistency” credit just for being a longtime customer. If you’ve started working from home or get laid off, let your insurer know you’re no longer commuting by car. You could save up to 10 percent, for example, if you now drive less than 10 miles a day.

Tweak your policy
Most experts don’t advise going with your state’s minimum liability coverage, since a lawsuit over a severe bodily injury could then wipe out your net worth. But opting for a higher collision deductible—from $500 on a typical policy to $1,000—could knock 5 percent off the premium on that line of the policy, analysts say. Most consumers file claims only once every eight to 10 years, so you’ll probably come out ahead in the long run, says Jeanne Salvatore, senior vice president at the Insurance Information Institute. Bundling your auto and home insurance with the same carrier could shave a few bucks too, as could trading in your car for one that’s less costly to insure.

Get smarter about credit
Underwriters use a credit-based score to help calculate your premium—and if you have a few black marks on your record, you’ll probably get hit hardest. Paying overdue bills and fixing errors on your credit report are good places to start. Using less of your available credit can hike your score too, according to Fair Isaac, the big credit-scoring firm. Insurers such as State Farm may also give you a break for a hardship such as a job loss, divorce or identity theft. Only certain hardships qualify, and only if they negatively affect your score. But you won’t get a break if you don’t ask.

Bank holiday warning issued by car insurance firm

The AA is appealing for drivers to ensure they take regular breaks when on road trips this bank holiday weekend.

According to research from the car insurance provider, one in 10 motorists admit to falling asleep while at the wheel with 28% saying they keep driving while tired in order to reach their destination quicker.

The study revealed that nearly half of those questioned drive through the night, when the body is in a naturally more relaxed state.

Andrew Howard, head of road safety at the AA, said: "The risk of death or serious injury from falling asleep at the wheel is greater as the grim fact is that these accidents tend to happen at higher speed, as drivers don't brake before crashing.

"Many of the motorists driving this weekend will not regularly drive long distances, so there will be a temptation to skip breaks and keep driving. If they do this while tired, they are in danger of becoming a statistic."

The AA advises drivers to plan journeys before setting off and make sure take stops at regular intervals.

Safe young drivers 'deserve better insurance deals'

The insurance industry should recognise the efforts of young drivers who are trying to improve the standard of their driving, one insurer has said.

According to the AA, young drivers who can demonstrate they are driving safely and therefore less likely to end up claiming need to be rewarded.

Simon Douglas, director of AA Insurance, said that young drivers face high premiums as figures from the firm show that they are 10 times more likely to be involved in a serious collision than an experienced driver.

"But that doesn't mean all young drivers are reckless or careless when behind the wheel. I believe the industry must work together to find a formula that recognises those who are able to demonstrate they take a responsible approach to driving," he added.

The AA said that many insurers will not provide cover for some drivers under 21, or even 25, which means premiums become higher and could encourage more fraudulent claims.

Drive Smart, a new campaign to encourage young people to drive safely, has recently been launched by the insurer.

During recession consumers should keep insurance

CHARLOTTE, N.C. (AP) — Barry Miller figured he was saving $100 a month when he scaled back his disability insurance. After all, he was healthy.

"It just looked like the policy was too expensive," said Miller, who was paying for his own disability insurance carried over from a previous job. "Sometimes you don't know what will happen."

What happened was this: In January, he was diagnosed with Bell's palsy, a condition that causes facial paralysis. Now, at 61, he has left his job as a sales manager for a girls' accessories company, and the Ridgewood, N.J., resident is out $3,000 a month in disability payments.

This is the summer of the new frugality. Americans everywhere are clipping coupons, searching for freebies and finding all sorts of creative ways to save money. Saving money is chic; another way to impress the neighbors. But others are making far tougher choices that threaten to cost them far more than they save.

Reducing insurance coverage, whether it's a consumer or a small business making the cuts, does mean instant cost savings. But it's proving to be problematic for some people, leaving homes and businesses underinsured and their owners facing huge monetary losses should disaster or illness strike. It's also making families vulnerable to financial hardship because some are giving up their life insurance.

"The economy is prompting a lot of people to reassess or re-evaluate everything everywhere and they are looking to make sure they are getting the most for their money," said Mark Gibson, assistant vice president of advertising for State Farm Insurance Cos. "Our industry is no different."

That creates something of a buyers' market. Many consumers are shopping around for the best price.

After receiving a rate increase notice last year for polices on two automobiles and two homes, Justin Gregonis decided to leave his current insurance provider and go with a cheaper company. Gregonis, of Phoenix, said he was able to get the same amount of coverage without changing his deductibles for a savings of about $1,200 a year.

"I was willing to go with whomever was going to get me the best rate and have the best coverages," he said. "Insurance in itself is just basically like playing the lottery. It's just a gamble, but you have to have it."

Consumers' willingness to abandon their insurers is making some companies work with customers to try to retain them.

Companies like Allstate Corp. and Travelers Cos. are introducing new discounts and lower priced products. But consumers need to be careful about discounts, for example, when carriers offer lower prices to customers who buy both homeowners and auto policies.

To help consumers, President Barack Obama has been advocating health care reform, which could pressure private insurers to keep premiums reasonable. And state regulators limit how much insurers can charge for coverage such as auto and homeowners insurance.

But many consumers are still cutting back on all types of insurance.

Al Tobin, managing director and leader of Aon Corp.'s property practice, said some clients aren't renewing the same limits on what are known as specialized policies, such as California earthquake coverage, because they can't afford them. Aon, an insurance broker, helps companies find commercial insurance coverage.

"We have seen a trend for quite a few months where clients are buying less," he said.

Insurers don't release figures on how much their customers are reducing or ending their coverage. But according to an Insurance Resource Council survey that questioned 1,000 adult consumers by telephone in December, 28 percent with at least one vehicle shopped for lower auto insurance rates, while 9 percent said they had canceled or decided not to renew their auto coverage.

Five percent of homeowners surveyed said they had canceled or not renewed their homeowners insurance, as did 14 percent of renters.

Tips for planning your motorcycle trip

Anyone planning a long motorcycle trip knows the unique feeling experienced in the days just before you “head out.” Call it anxiety, nervousness, excitement or worry, we’ve all felt it. We’ve checked the bike and the gear, usually multiple times. Then we’ve thought about checking the bike and the gear many more times! We think: “Did I miss something? Did I forget something? Is the bike ready? Am I ready, and am I sure I really want to do this?”

As we head into the summer riding season, I thought a check-list might help plan that long trip. This list is by no means inclusive. I started this list before my trip from Maryland to Arkansas last year and have added to it as ideas and experience have dictated.

Off-road warning after gate crash

Police have warned riders of motorcycles and quad bikes against riding off-road on public paths after a biker was injured crashing into a gate.

The accident happened on a canal tow path at Tomnahurich Bridge, Inverness. The man required hospital treatment.

Northern Constabulary said riders using tow paths were partly behind increasing complaints about off-road riding.

Officers said irresponsible use of the bikes could lead to them being seized and even destroyed.

'Worst case'

Sgt Gus Stewart said the force wanted to ensure public paths and tracks were safe.

He added: "We ask that if you are using any such vehicle you seek approval of the land owners first or seek to find approved clubs or tracks in the area.

"I would also like to remind riders, if your motorcycle is being used on a road or public place it requires to be covered by a policy of insurance.

"If you don't, you run the risk of being reported, your motorcycle being seized, and in the worst case, it thereafter being destroyed."

Drivers look to bikes to save money on insurance deals

Drivers are contemplating exchanging their cars for mopeds or motorbikes as a way of saving money on their insurance deals, one financial services provider has claimed.

The Post Office stated that the benefits of swapping to two wheels can be seen in lower premiums, no congestion charge, road tax starting from £15 and less fuel consumption.

Research from the organisation showed that 31% of men are attracted by lower fuel costs while 27% are considering a change as they think it will be easier to travel.

Richard Pennant-Jones, Post Office head of general insurance, said: "At a time when many people are stretched financially, switching from four wheels to two is one way to save money.

"Using mopeds or motorcycles over the spring and summer can help reduce day-to-day transport and running costs, including insurance which could be significantly cheaper for motorcycles and mopeds than cars."

Until the end of July, Post Office Motorcycle Insurance is currently offering new customers an extra month for free when they purchase a year-long policy.

Motorcycle class keeps riders safe

MONTEVALLO — Mike Newton celebrated his 50th birthday earlier this year by fulfilling a lifelong dream: buying a motorcycle.

“I always wanted a bike, all my life,” said Newton, who lives in Forestdale. “I waited until I turned 50 and thought I would go for it.”

To learn more about biking, Newton enrolled in Motorcycle Safety Foundation training at the Alabama Traffic Safety Center. The class was taught May 29-31 on the University of Montevallo campus.

“I want to know how to get the most enjoyment out of the bike, and keep myself out of trouble,” said Newton, who teaches English at Wenonah High School in Birmingham.

About a dozen people took this weekend’s basic rider course, designed for people who have limited or no riding experience.

“The last thing I want to hear about is somebody wrecking, especially due to lack of training,” said Rick Randolph, program manager at the traffic safety center.

Randolph retired from the Air Force a few years ago and has taught vehicle safety at Maxwell Air Force Base.

“Motorcycling is just like a baby learning to walk,” Randolph said. “They learn by mistake — they fall. Rarely do they get up and dosado.”

An avid biker, Randolph said the course quickly helps people decide if motorcycling is really something they want to do.

“If someone is entertaining the thought of riding, take the class and find out,” Randolph said. “You don’t want to spend $7,000 on a motorcycle and realize this is not your cup of tea and then have payments for years. This may not be something for you; it isn’t meant for everyone.”

Eddie Zedaker, a 22-year-old Auburn student, enrolled in the class hoping to ride with his father.

“My dad just purchased a second bike; I want to ride with him,” said Zedaker. “This is my first time to ride. This helps you with just getting the feel of it.”

The traffic safety center also offers classes for more experienced riders. The advanced training focuses on cornering, braking, emergency maneuvering and carrying a passenger.

“I hear people say, ‘Dude, I’ve been riding for years, and I don’t need that,’” Randolph said. “I rode for years, but I was an uneducated rider. I thought I knew what I was doing, but I wasn’t always trained in the best way.”

Randolph said proper training is more essential now than ever before.

More and more people are turning to motorcycles, commuter bikes and scooters due to great fuel efficiency, Randolph said.

The state witnessed a 51 percent jump in motorcycle registration from 2000 to 2007. But more bikers on the roadways also mean more fatalities, accidents and property damage, Randolph said.

Alabama is the only state that doesn’t require motorcycle drivers to pass a skills test to earn a license. Currently, 38 states use the Motorcycle Safety Foundation course as their skills test.

Passing the course often earns drivers a discount on their motorcycle insurance, as well as better driving skills.