- High Auto Insurance Costs.
- Reducing Auto Insurance Costs.
- What Do You Do When an Accident Happens?
- Combined Single Limit vs. Split Limits.
- How to Avoid having Your Vehicle Stolen.
Insurance rates follow costs, and the things insurance pays for are now much more expensive. The following are explanations of some of the factors that contribute to rising insurance rates:
Medical and Legal Expenses.
Medical costs are an important factor in the cost of auto insurance. Each year there are more than two million car accidents involving injuries. Several people are often injured in the same accident. Typical costs for treating an auto accident victim range from $6,000 to $9,000 but can easily run into the tens of thousands of dollars. The cost of auto injury claims is rising by as much as 30 percent in some states.
Sharply higher jury awards in vehicular liability cases are putting additional upward pressure on auto insurance rates. The average jury award in auto liability cases rose from $187,000 in 1994 to $269,000 in 2000-an increase of 44%. Auto liability issues are much more important than people realize. About 60% of auto premiums paid in 2003-nearly $32.6 billion-were for liability coverages.
* Information in this section is quoted from the Insurance Information Institute publication entitled, "What's Behind the Rising Cost of Auto and Homeowners Insurance? Outlook for the Auto and Homeowners Insurance: Second Half of 2002 and Preview for 2003" by Dr. Robert P. Hartwig, Ph.D., Vice President and Chief Economist
Motor vehicle crashes are the leading cause of death among Americans 1-34 years old. According to the U.S. Department of Transportation, the total societal cost of crashes exceeds $150 billion annually. Contributing to the death toll are alcohol, speed, lack of belt use, and various other driver behaviors plus the kinds of vehicles people drive and the roads on which they travel.*
* Insurance Institute for Highway Safety Fatality Facts. 2001, Insurance Institute for Highway Safety, October 2001.
- Motor vehicle thefts increased 5.7 percent*
- There were more than 1.2 million estimated motor vehicle thefts in 2001, a 5.7 percent increase over the 2000 estimate. This translated into a rate of 430.6 motor vehicle thefts per 100,000 United States inhabitants.*
- By vehicle type, motor vehicles were stolen at a rate of 336.9 per 100,000 inhabitants during 2001; trucks and buses were stolen at a rate of 86.5 per 100,000 persons.*
- Based on the more than 1.2 million estimated motor vehicles stolen in 2001, the estimated dollar value of vehicles stolen nationwide was almost 8.2 billion. Approximately 62 percent of that amount was recovered. The estimated average value of stolen vehicles was $6,646.*
* US Department of Justice Federal Bureau of Investigation, October 28, 2002 Press Release.
- Not as well known as other crimes, fraud costs an estimated $30 billion annually according to the NICB.*
- Fraud is the #2 crime in America, according to the FBI -- following closely the #1 crime: tax evasion.*
- Most common insurance fraud scams: Bodily Injury Fraud, Auto Repair Fraud, Homeowners Claim Fraud, and Workers Compensation Fraud.*
* National Insurance Crime Bureau (NICB), June 19, 2001 Press Release.
- Impaired driving will affect one in three Americans during their lifetime (NHTSA 2001a).*
- Alcohol-related motor vehicle crashes kill someone every 32 minutes and non-fatally injure someone every two minutes (NHTSA 2001a).*
- During 2000, 16,653 people in the U.S. died in alcohol-related motor vehicle crashes, representing 40% of all traffic-related deaths (NHTSA 2001a).*
* NHTSA 2001a, National Center for Injury Prevention and Control Fact Sheet.
Advances in technology aren't always good. Because auto makers use advanced technology in building today's cars, it is a lot easier to damage them now. The new materials used in today's manufacturing lead to smaller, lighter cars, as well as thinner glass; therefore, damage can happen much easier now. Consequently, this leads to higher repair costs, reflected by your insurance premium.
Here are a few ways for you as a policyholder to keep insurance costs down:
What you can do to control costs:
- Choose a safer car.
- Buying an automobile with a good claims track record can significantly reduce your premium.
- Drive carefully.
- Safe drivers pay lower premiums than those with a lot of tickets and accidents.
- Take advantage of discounts.
- Anti-theft devices, airbags, and anti-lock brakes are examples of some discounts offered on insurance policies. Good Student and Driver Safety Course discounts also apply with some companies.
- Obey traffic laws.
- Your rates will be affected if you are convicted of a moving violation.
- Raise your deductible.
- The higher the deductible, the lower the premium.
- Carefully choose your coverage.
- It may be worthwhile to drop comprehensive and collision coverage on an older car. Comparing the value of your car to the premium and deductible may help you decide.
Florida Auto Insurance is committed to doing what's best for you. Part of that commitment is an ongoing effort to offer you the highest level of service at the lowest possible cost.
What Florida Auto Insurance does to control costs:
- Member of FAIA and NFIB
- Endorses tougher seat belt laws and stiffer penalties for drunk driving and auto theft.
- Speaks out for stricter enforcement of speed limits and against radar detectors.
- Ability to shop around with different insurance companies to offer the best rates.
Overall, the numbers are staggering: More than 6.7 million motor vehicle traffic accidents were reported to police in 1997, according to the National Highway Traffic Safety Administration's (NHTSA) most current statistics. That's roughly 18,000 traffic accidents per day.
If you happen to be involved or witness an accident, take the following actions:
In order to accurately assess damages, you must remain calm Get help for anyone who has been injured, and stay clear of the road.
Call the police
Call the local police no matter how minor the accident may seem. Even if the driver of the other vehicle insists there is nothing wrong, still call the police.
Get all relevant information
The relevant information you must collect is the other driver's name, address, phone numbers, driver's license number, and insurance company information. If someone else is registered to that vehicle, also get the same information from them. Write down names and numbers of any witnesses to the accident. Finally, note the location of the accident and any special circumstances that may have contributed to the accident (construction, potholes, etc.)
Do not suggest the accident was your fault
Don't let emotions get the best of you. Any statement made at the scene of the accident can be used against you later in a lawsuit. Even if it looks like it is your fault, do not admit to it. Later evidence may indicate you were not at fault. Also, do not disclose your policy limits. The other driver may insist there has been no damage or injury, then later file a claim against you.
Report the accident to Florida Auto Insurance as soon as possible
The sooner Florida Auto Insurance is notified of an accident, the better job we can do of notifying the proper insurance company so they may settle the claim.
We hope you never find yourself in an accident, but if you do, Florida Auto Insurance wants you to be prepared. Knowing what to do in an accident situation may ease a particularly harrowing experience.
Driving Safely Is Your Best Defense
One of the best ways to avoid an auto accident is to practice defensive driving. Here are some tips:
- Do not drive while intoxicated or under the influence of drugs.
- Obey all posted traffic laws.
- Maintain a following distance of at least one car length between your car and the car ahead.
- Be on the defensive-expect other drivers to make mistakes.
- Be aware of potential road hazards such as potholes, construction barriers, or stalled vehicles.
- Do not drive when you are tired, or emotionally overwrought
- Keep your vehicle well-maintained.
Source: Defensive Driving, The Best Offense, National Safety Council.
If you have a combined single limit policy, you selected one liability coverage limit. If you have a split limit policy, you selected three limits.
A combined single limit policy gives you a single limit that may be used as needed. A split limit policy splits the coverage amounts. Thus, a combined single limit policy allows you flexibility to use your coverage for everything. Split limit policies designates how much coverage will go toward bodily injury and how much goes toward property damage. Both types of coverage offer policyholders good protection, as long as the coverage limits are adequate.
How Much Is Enough?
If you have single limit coverage, Florida Auto Insurance recommends at least $300,000 of coverage. A single limit refers to a single figure, such as $300,000, that can be divided in any combination. Split limits, on the other hand, break down the maximum coverage per person and per accident for bodily injury with a separate component for property damage. Usually, a split limit policy is quoted in three numbers. Florida Auto Insurance recommends at least $100,000/$300,000/$100,000, which would cap the coverage as follows: bodily injury at $100,000 per person/$300,000 per accident/ $100,000 for property damage.
The primary benefit of having a combined single limit auto policy is flexibility. Based on the real circumstances of the accident, there is flexibility to distribute the monies in an appropriate fashion. With split limits, the coverage parameters for bodily injury and property damage can potentially lead to a situation where a component is not covered entirely in terms of the other person's injuries or property damage.
In the time it will take you to read this article, one vehicle will be stolen in the United States. In 1997 alone, 1.35 million vehicles were reported stolen, according to the Federal Bureau of Investigation. The increased expenses related to this crime have affected you as a consumer, even if you have never had a vehicle stolen. As insurance consumers, auto theft negatively influences insurance premiums.
There are steps you can take to prevent your car from being stolen. While a good alarm system or a tracking device is very effective, simple common sense is often the best way to avoid becoming a victim of auto theft. The Automobile Theft Prevention Authority recommends following these simple precautions:
- Never leave your car running unattended. Don't consider this even if you'll only be gone for a minute. Vehicles are commonly stolen at convenience stores, gas stations, ATMs, etc. Many vehicles are also stolen on cold mornings when they are left running to warm up the engine.
- Lock your car. Approximately 50 percent of all stolen vehicles were left unlocked.
- If you have a garage, use it. Parking your vehicle inside not only protects it from the elements but also protects it from thieves.
- Take your keys. Nearly 13 percent of all stolen vehicles had keys in the ignition.
- Park in well-lit areas. More than half of all vehicle thefts occur at night.
- Always roll up your windows, close your sunroof, and lock your car. Don't make it easy for a thief to enter your vehicle.
- Don't leave valuables in plain view. Personal possessions left on the seats or floor of the car make your vehicle a more desirable target.
- Park in an attended lot and leave only the ignition and door key with the attendant.
- When parked in a garage, lock the garage door as well as your vehicle. By locking both, you greatly improve your chances of deterring a thief.
- Never hide a second set of keys in your car or on your car. Thieves know all the hiding places.
- Never leave the title to your car in the glove compartment. A thief can use this to sell your stolen car.
Following these practical tips and using common sense will help you protect your car from theft. However, in case your car is ever stolen, you may want to consider Comprehensive coverage from Florida Auto Insurance. Your local representative would be happy to review your present coverage with you and answer any questions you may have on your auto coverage, including rates, anti-theft discounts, and rental coverage in the event of theft.
Ten Most Often Stolen Vehicles
According to the National Insurance Crime Bureau, the ten most often stolen vehicles in 1997 were:
1) Honda Accord
2) Toyota Camry
3) Oldsmobile Cutlass
4) Honda Civic CRX
5) Ford Mustang
6) Toyota Corolla
7) Chevrolet full-size pickup
8) Nissan Maxima
9) Jeep Cherokee
10) Ford F150 series pickup