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These Factors Influence the Cost of Auto Insurance
Different risk factors that have been linked to accident statistics affect the final rate. These factors are often better at determining risks than analyzing individual driving records alone. While not all companies use every determining factor in this article to price an auto insurance premium, they use several.
This is something used by every insurer to determine policy pricing. Those who have had multiple at-fault accidents in the past are more likely to be involved in an accident in the future. However, a person who has not had any prior accidents is a lower risk for insurers and enjoys a lower premium as a result. Tickets for speeding and other infractions affect insurance rates. An incident of driving without insurance will cause a person to have to pay a much higher rate for a year or more after the incident, and the individual cannot drop the special required coverage.
People who drive more face a greater risk of being involved in an accident. Those who commute long distances for work every day usually pay higher premiums. However, someone who works at home and drives once or twice per week would be considered a lower risk and may have a lower premium. Insurers often ask for mileage readings every year.
If a vehicle is parked outdoors on a street in a large city, it faces a higher risk of vandalism and is exposed to the elements. These risks may result in a slight increase in the cost of insurance. However, a vehicle that is parked in a garage in a small town where there is rarely severe weather might have a lower insurance premium with the same insurer. Some states also have higher rates of fraud, litigation, medical expenses and other premium-raising incidents. The cumulative cost of these incidents is passed down to policyholders.
Drivers who are under the age of 18 are considered a higher risk than those who are over the age of 18. Also, drivers under the age of 25 are in a higher risk category. As a rule, most drivers who maintain a good record see a noticeable drop in insurance costs after they turn 25. For younger drivers who earn good grades in high school and college while maintaining a clean driving record, some insurers offer special discounts.
While many insurers do not use this as a major pricing factor, it is one to consider. As a rule, women are not involved in serious accidents as often as men. Also, men have higher rates of DUIs, which considerably impact the cost of insurance.
Type Of Vehicle
A vehicle's value, its likelihood of being stolen and its safety ratings affect insurance rates. The presence of certain safety features lowers insurance costs. Engine size, make, model and age are some additional factors considered by insurance companies. For example, a used hybrid sedan with several safety features would cost less to insure than a new Corvette.
An individual credit score is not the sole determining factor with credit. Insurers use payment history, bankruptcies and other information from a credit report to create a special insurance credit score to help with premium pricing.
Most insurers offer several types of coverage and some add-on bonuses such as roadside assistance or rental car coverage. These add-ons are usually several extra dollars per month. Some people choose comprehensive coverage, which includes a wide range of incidents such as vandalism, cracked windshields, body dents and more. Liability insurance covers medical care and property damage to another party if the insured driver causes an accident. Pricing varies based on the dollar limits for these policies. However, drivers must carry at least their state's minimum liability requirements for insurance. Comprehensive and add-on features are optional but recommended.
The best way to find out how much insurance costs is to request a free quote. To learn more about insurance and pricing factors, discuss concerns with an agent at 314-351-HALO (4256).
Water Damage Claims Are On the Rise
In a report released in 2014, the National Insurance Crime Bureau reported that more than 1.3 million water damage claims were filed throughout the United States. In 2015, that number increased to more than 1.4 million.
California was the state with the most claims at over 325,000. Florida came in second with more than 225,000. With over 220,000, Texas ranked third. New York was fourth with over 145,000, and Pennsylvania was fifth with over 140,000. The top U.S. cities for claims were San Antonio, Chicago, Houston, San Diego and Miami.
According to NICB, water damage is any type of damage to a property that occurs because of accidental water leakage, overflow or discharge. This can be from air conditioning, heating, plumbing and refrigeration systems. It may also happen because of melting snow or ice, rain, open windows, leaky doors, skylights or rising water tables below a home.
If the damage happened because of the homeowner's negligence, it may not be covered. For example, an entire ceiling that collapses because of a leak between the roof and the ceiling that has obviously existed for a long time may not be completely covered. If it is evident that the homeowner knew of the leak but let it worsen over time, he or she was being negligent. Also, insurance companies look for reports of exaggerated damages.
It is important for property owners to review their policies regularly and keep them current with any possible risks. If a natural disaster occurs, property owners must be aware of unethical repair fraudsters and contractors who appear unsolicited to offer their services. More scam artists are showing up after disasters, and desperate people often become financial victims to their schemes. When these fraudsters do shoddy work or fail to do any work at all, the damages become worse and more expensive.
When a claim must be filed, contact a personal insurance agent for repair recommendations. They can provide a list of reputable contractors and service companies. The key idea to remember is to avoid doing business with anyone who was not directly contacted, and this is especially true with door-to-door solicitors. Report any suspicious solicitors to the police. If insurance fraud is suspected, it can be anonymously reported to 800-TEL-NICB. To learn more about insurance fraud and how to stay safe when hiring contractors, discuss concerns with an agent at 314-351-HALO (4256).
Landlords May Be Legally Liable for Tenants' Injuries
One of the risks from being a landlord is that tenants or visitors to the premises may get injured. Injuries may result from factors out of the landlord's control. However, in some cases the landlord may be legally liable for accident.
A landlord is legally liable for a tenant's or visitor's injury if he is negligent. The law considers a person's actions to be negligent if:
He owed a duty to someone else to be careful
He was not careful
The other person suffered some kind of actual harm
The first person's failure to be careful caused the harm.
In the case of a landlord, this means:
The lease or some other agreement made the landlord responsible for maintaining a certain part of the premises in safe condition
The landlord did not take reasonable steps to maintain it in safe condition
Repairing the problem (or, failing that, at least putting warning signs or barriers up) would have been reasonably easy or inexpensive
The landlord should have foreseen that the unsafe condition could cause serious injury to someone
Someone suffers an injury
The landlord's failure to address the unsafe condition caused the injury.
Suppose the property is in the northern part of the country, where winters are harsh. After several days of heavy snow, large icicles form on the edge of the roof. Ordinary people observing these icicles would judge that they are heavy enough to badly hurt anyone they fell on. Moreover, knocking them down with a roof rake or similar tool would probably take only a few minutes.
If, after the icicles have been present for a few days, one of them falls on a visitor's head, it is likely that the landlord would be liable. The affected part of the property (the roof) is normally the landlord's responsibility; the icicles were a clear threat to safety; knocking them down would have cost little time or money; and the landlord left them up there, leading to an injury.
The best way to prevent liability for injuries is to prevent the injuries from happening. That means taking the initiative to address potential problems by:
Regularly inspecting the property with a checklist
Keeping a log of problems to be repaired, both those found by the landlord and those reported by tenants
Prioritizing repairs, starting with the ones presenting the greatest and most likely hazard.
Communicating the status of repairs to tenants.
Accidents may still occur. When they do, the landlord needs property and liability insurance. Property insurance pays for repair or replacement of property damaged by certain causes, such as fire, smoke, glass breakage, and vandalism. It may also pay for rents lost if the premises cannot be used after one of these events. Liability insurance pays for amounts the landlord may owe as damages to someone else for injuries or property damage.
Accidents that cause injuries are disturbing and can be costly for the landlord. It makes sense to keep the property in safe condition and buy insurance for the unexpected. Discuss concerns with an agent at 314-351-HALO (4656).
Reduce the Risk of Fire Damages
Home insurance provides some peace of mind and financial security for families. However, fire prevention should still be a priority. Fire-resistant features can provide discounts on home insurance and may help offset the costs of purchasing and installing them.
There are several helpful mitigation steps for homeowners to take. The following are some of the top examples:
Use fire-resistant features throughout your home and especially on the roof.
Clear a safety zone between 200 and 500 feet around your home that is free of leaves, brush, trees and debris.
Keep all fuel or propane tanks at least 30 feet away from home and any outlying structures.
Test fire extinguishers and smoke alarms regularly to ensure functionality.
If there is no hydrant nearby, buy a water storage tank with a hose that will reach the entire property.
Ensure that any entrance road is easy to access at all times.
Be sure that the home address is visible on the front entrance of the property and not just on the home itself.
Review your insurance policy regularly to make sure that all new items are covered in the event of a fire.
Many Americans may not require additional insurance specifically for wildfires since they are covered under normal provisions for fire damage. The type of insurance needed depends on the type of building or home, the contents of the property and whether the homeowner runs a business out of the home. Construction materials used in building the home and the distance to the nearest fire hydrant are also concerns of insurance companies, as homes that are within 100 feet of a fire hydrant are considered less of a risk. Read a home insurance policy thoroughly to learn more, and discuss any concerns with an agent.
It is also important to know what type of policy is in place. If the policy is an actual cash value policy, it only covers the actual worth of the property at the time of the damage. The deductible is subtracted from that amount. However, replacement cost policies pay the actual cash value aside from the deductible. When the property is replaced, the homeowner pays the difference between the two amounts. Keep in mind that the cost of cleanup is also an issue, and this should be factored in with the policy's provisions.
Review individual coverage limits each year to keep an inventory updated as additional policies may be required. For example, people who buy expensive jewelry, art and firearms need separate insurance policies for these valuable items. Also, be sure that the policy limit for the home or property is in accordance with construction costs if it must be rebuilt. When discussing new insurance needs with an agent, be sure to provide plenty of information. Save receipts for big-ticket items such as expensive televisions, computers, furniture and similar purchases. Always be sure to understand the terms and limitations of the insurance contract thoroughly before signing. This will help prevent any confusion in the future.
To learn more, discuss concerns with an agent at 314-351-HALO (4256).