Anyone who lives in hurricane, earthquake or tornado country knows about the damage that acts of God can take.  Yet, few people consider this damage when they take out car insurance policies.  Even if you have faith in God, keep in mind that God gave us the gift of forward thinking so we could take actions to protect ourselves against dangers!

Luckily, comprehensive car insurance which includes acts of God is not usually much more expensive.  If you have to make a claim on because of an act of God, like a tornado sucked up your car and spit it into pieces, then you will be covered.  Your premiums are not likely to rise for a single act of God claim because these claims are not preventable and no one is at fault.

If you don’t have act of God coverage, there is a small chance that other car insurance companies could use it to their advantage to avoid paying you when their drivers are at fault.  For example, let’s say a guy is driving, hits an icy patch, and skids into you.  The guy’s car insurance company may say that they are not liable to pay because it was an act of God.  Since you are not covered from acts of God, then you will not get reimbursed.

It is not common for insurers to claim “act of God” in situations where there is someone driving the vehicle.  These cases can be contested in court and you are very likely to win.  However, you will first have to go through the ordeal of filing your case and a significant amount of your awarded damages may end up going to legal fees.

If you are struggling financially and need to save every penny on your car insurance premiums, then you may be able to get away with the most basic collision and state-required liability coverage.  However, if you have a newer car, it is unwise not to get comprehensive car insurance, even if you don’t live in an area known for natural disasters. IF you still are in debt on your vehicle, then you also must have comprehensive car insurance coverage.

Even if you do have comprehensive car insurance, make sure you carefully read which types of acts of God are covered and which are not.  If you live near a river and flood damage is not covered, then you may need to alter your policy.   Never assume that you are covered for all those unforeseeable events.

In some states, it is legal to drive without car insurance.  There is a catch though: you must claim that you are financially capable of taking responsibility for damages.  In Ohio, drivers can hit the road without car insurance once they have bought a $30,000 bond from an authorized company or made a deposit of this amount at the state treasury.  In some states, you don’t have to prove your financial ability to pay damages, but you will have to pay just for not being insured.  For example, South Carolina requires a yearly $550 fee for getting certified a an uninsured driver – and the driver will still be responsible for paying all damages if guilty.

In the worst case scenarios, drivers without car insurance get into serious accidents and have their entire life savings wiped out from the damages. They will also likely face large fines and penalties from the state too.

The threat of getting stuck with massive damages isn’t enough to scare everyone into buying car insurance – even when they are legally obligated to do so.  About 5-28% of drivers are uninsured (depending on the state).  Many states are taking action to ensure that drivers have car insurance.  In California, lapsed car insurance policies go into a database.  Those drivers without coverage will not be able to renew their drivers licenses until they get coverage.

Even if you don’t get into an accident, you are still likely to face a hefty fine for driving without insurance.  These fines are sometimes more than it would have cost you to insure yourself for the year.  The worst part is that the no-insurance violation is going to harshly affect your rate insurance rates in the future.  After you get a ticket for driving without insurance, the rates offered to you may be double what they would have been.

If you can’t afford to pay for car insurance, then you should not drive. Period.  Instead, look into public transportation options, start biking to work if it feasible where you live, or join a carpool. Before you give up on driving completely because of the car insurance rates, do some comparison shopping.  You can buy minimal car insurance while you are financially struggling. Then, as your situation betters, you can increase your coverage to something which better protects you and suits your lifestyle.

Before you figure out what sort of towing coverage you need for your car, you will have to assess your likely needs.  If you have a new car and live in a highly-populated area, then you probably aren’t going to need towing services often.  If you do need to call a tow truck, there is probably a company located nearby and the charges won’t be too high to get you to a service station.  On the other hand, if you are driving a clunker and live in a rural area, then you will probably break down sometime and it could cost a small fortune to get you to a service station.  There is usually a flat fee just for the tow truck arriving and then about $2-$6 per mile after that.  Keep in mind that the costs are going to vary greatly depending on who you call.  If you call a private company that you have investigated beforehand, then you can get good rates.  If you have an emergency dispatcher call a tow truck for you, then you may get the company with the astronomical rates.

Many people opt for auto clubs to take care of their roadside assistance needs, such as towing.  The most popular is AAA and they have basic membership starting at about $55 per year.  This will get you a free tow of 5 miles yearly.  For the premium membership of about $125 per year, you can get towed up to 200 miles yearly.  There are other auto clubs besides AAA which may be better suited to your needs.

Now, most car insurance companies offer riders for towing plans.  These towing riders on your car insurance policy vary greatly, both in price and in coverage.  Many of the riders are for complete roadside assistance, not just towing.  Depending on the level of coverage you need for roadside assistance, expect to pay $24-$100 per year extra on your car insurance premiums.

Always make sure you know exactly what is covered and under what circumstances before you add roadside assistance to your car insurance policy.  Also, find out whether using the roadside assistance is going to make your car insurance premiums rise – it could be considered a claim!  You should also ask how the payments will work. Will you have to pay up front for towing and get the money back from the car insurance company or will the costs be forwarded to the provider.

Delivery jobs are inherently dangerous.  You spend a lot of time on the road battling traffic, avoiding pedestrians, and navigating unfamiliar terrain.  There are other risks too, like getting mugged, but we won’t get into those now.  Because delivery jobs are so dangerous, most car insurance companies will not cover you while you are on the job.

The amount of coverage you have as a delivery driver depends on numerous factors.  If you are going to drive a car which is owned by the company, then the company will have its own car insurance policy and take care of premiums and accident fees.  However, if you have any violation while on the job, the points will still go towards your record and can impair your car insurance rates on your current policy or future policies.  Since you are much more likely to be in an accident or get a violation when you are constantly driving, you will have to be cautious even in the company vehicle.

If you are driving your own vehicle during the deliveries, then you will have to consult with your car insurance company about how the job affects your premiums and what coverage you will have. Most car insurance companies will not cover you while you are working.
In the event of an on-the-job accident and you do not have coverage, then you can expect a lawsuit.  It is more likely that your employer is going to get sued than you as the driver. However, the victim of an accident can file a claim against anyone involved, even if pizza delivery drivers making minimum wage plus tips. If the delivery driver is a minor, then the teen’s parents could be held responsible for the damages.

People who do not drive their cars regularly can usually get away with choosing minimal coverage car insurance.  But, if you are getting a job as a delivery driver, you better make sure you are covered.  In the event of an accident, you could find yourself with damages against you in the tens or hundreds of thousands.  Even a simple fender bender can set you back over $15,000.   Talk to your employer about what coverage is available for the driver.  You should be at least covered for up to $100,000 for bodily injury and at least $300,000 per accident.  If you are expected to get your own car insurance for the job, then it may be wise to trade in your current vehicle for a model which has lower premiums.  Teens will likely want to set up their own car insurance to avoid liability on the part of the parents.

In cases where you only have partial custody of your teen driver, talk to your car insurance company about the situation.  Some car insurance companies will only make the custodial parent insure the driver whereas other companies will make both parents pay full insurance.

If you really don’t want to cover your teen on your car, then you will need to put a named exclusion into your policy. A named exclusion designates that a specific driver will not be covered in any incidents.  Be careful before you put this exclusion in your insurance policy; if your teen does end up driving your car, you will not have any coverage if an accident occurs.  Instead, check your state laws about whether your teen driver can take out a policy on his/her own vehicle.  Not all states allow this because they may prohibit minors from owning property or entering contracts.  Even if it is allowed in your state, it will still be cheaper for you to insure the teen through your insurance than taking out a separate policy.

Almost all car insurance companies will offer some discounts for teen drivers.  If your teen gets good grades, this can save you about $200 a year on your premium.  There are also driving classes which teens may be able to take in order to get an extra discount. If your teen driver is only using the vehicle while home from college and you can show that the college is far away (100+ miles away), then you should also be able to get a discount.

A few car insurance companies are getting creative with ways to minimize risk with teen drivers.  You can opt to install a device in your car which monitors your teen’s driving, such as speeding or forgetting to put on the seatbelt.  While these devices are pricey, they can help keep your teen driver safe and also offset some of the costs of car insurance premiums.  Since the devices are helpful in preventing accidents, they will help keep your car insurance rates low in the long run.

Also make sure that your teen is driving the cheapest car to insure.  Avoid any of those flashy cars which your teen probably really wants and instead opt for the safest models.  You can ask your car insurance company which cars are the cheapest to insure.  As your teen proves him/herself as a good driver and the rates go down, then the reward can be a chance to drive the car that he/she really wants.

The only ticket you really don’t have to worry about is parking tickets.  These will never make your car insurance premiums increase.  With all other tickets though, there is a chance that your car insurance rates could jump, and possibly through the roof. The tickets which probably aren’t going to make a major impact on your insurance rates are:

• Unsecured load
• Littering
• Broken lights, a crack in the windows, or other damage to the car
• Driving after your license expires
• Driving out of your restricted period (such as with teens who are only permitted to drive during certain hours)
• Not wearing your seatbelt
• Driving in HOV lane
• One speeding ticket
• Cell phone violations

States handle some tickets differently than other. For example, in many states, cell phone violations do not get points added on your driving record.  If you are in one of these states, then a cell phone violation will not affect your car insurance premiums.  However, there are states which take cell phone violations very seriously and will add several points to your driving record, thus making it likely your car insurance company will increase your premiums.  It is important to understand how your state handles violations and their point value before you even begin to fret about your car insurance premiums.

If you do get points on your driving record for a violation, it still may not be counted against you by the car insurance company.  Many providers do not increase your rates for the first violation. The insurance company only starts getting really concerned when you have multiple violations.  You can expect your car insurance company to review your driving record for new points about every 6 months.  In general, all new violations will remain on your car insurance record for 3 years.  If you get another violation in that time, then you can expect the rates to jump.

There are some violations which are sure to send your car insurance rates through the roof.  These include:

• DUI
• Driving with no insurance
• Driving with no or a suspended license
• Fleeing the police
• Driving in the wrong direction
• More than one speeding ticket in 3 years
• Racing
• Being deemed the cause of an accident

Responsible drivers shouldn’t be getting these sorts of violations but sometimes they still happen, like getting into an accident.  If you do get a ticket and you worry it will get counted against you by your car insurance company, see if there isn’t any way to get the ticket off your record.  Some states allow you to attend a driving school or similar program instead of getting the points added to your record.  These alternatives are usually pricy but will often pay out in the long run by keeping your car insurance premiums low.

As the nation’s cell phone dependence increases, so has the number of driving accidents due to cell phone use.  35 states already have bans against talking on cell phones while driving except for with a hands-free device.  9 states have bans on all cell phone use, including with hands-free devices. Soon, all cell phone use while driving may be completely banned based on a recommendation by the National Transportation Safety Board.  They have plenty of examples to back up why cell phone use while driving should be banned, like the case in Gray Summit, Montana where a teen caused a fatal pileup after sending and receiving 11 texts.

If the threat of a ticket isn’t enough to get you off the phone while driving, then consider your car insurance premiums.  Right now, a ticket for cell phone driving may not increase your car insurance premiums or may increase it only slightly.  However, that is starting to change.  Car insurance companies realize that cell phone use while driving is risky.  They hate taking risks so are going to bump up your premiums the moment you get a cell phone driving ticket.

Already have a ticket for talking on your cell phone while driving?  Don’t panic about your cell phone premiums yet.  In many states, your cell phone violation is like a parking ticket and doesn’t get put on your driving record points.  Many states pardon your first violation.  There are some states though, such as New York, which will put several points on your driving record the first time you break the cell phone driving laws.

Each car insurance company handles cell phone violations differently so it is worth it first to see what your state regulations are and then see what your car insurance provider will do if you get a violation. In many states where you get points on your driving record for cell phone violations, your car insurance premiums could jump by 25%.  With some providers though, your first offenses are pardoned.  You shouldn’t be talking on your cell phone while driving at all but, if the state laws aren’t enough to get you off the phone, maybe the threat of high car insurance premiums will be.

“I am getting a big commission on your policy.”

Car insurance agents mostly are paid through commission.  This is their incentive to get you to sign up to a policy.  These commissions aren’t small either!  You can expect about 15-20% of your first-year’s premium to go directly to the insurance agent. After the first year, the agent still gets a commission when you stay a policyholder, though the commission is smaller.

“Your rates are probably not going to drop.”

Some insurance agents like to infer that your rates could drop with them in the future.  This is not likely the case.  It is much more likely that your car insurance rates are going to go up instead.  Forget about all those inferences of “customer loyalty discounts” – they don’t exist!  The only way that your car insurance rates are going to go down is if you are a young driver or have an accident on your history. In these cases, a few years of responsible driving can help you get better rates.

“If you have bad credit, your car insurance premium will be more expensive.”

Most people are shocked to learn that their credit history affects their insurance rates, including car insurance and other policies.  While your credit may not have any direct link to how you drive, the insurance companies cite some studies which show people with bad credit are more likely to file a claim than those with good credit histories.

“We won’t pay you the full value of your car.”

If your car is completely damaged beyond repair in an accident, your car insurance company will cover the costs – but don’t expect them to give you the full value.  They will try to undercut the price whenever they can.  Be prepared to do some research to prove your car’s real value, such as by looking up the price of similar vehicles online.

“Even if your car is repairable, we will still probably declare it totaled.”

If you have an accident and your car is repairable, your car insurance company will still likely declare that it is totaled. This way, they can undercut the value of the car and also sell your damaged car for profits.

“If we cannot profit from you, we will drop your policy.”
Just because a car insurance company accepted you, it doesn’t mean that they will keep you.  Car insurance companies are looking for long-term profits.  If you file a big claim or numerous smaller claims with the company, they may decide you are not worth it and drop your policy.

There is good reason that states are cracking down on drunk driving: it is dangerous for you and everyone else around you.  And we know that the car insurance companies hate risk which is why they are really going to crack down on you if you get a DUI.

At the very least, you can expect your car insurance rates to go up by 200% after a first-time DUI ticket. In many cases though, you will end up paying much more than double. You will have to keep on paying the high premium for the amount of time that the DUI stays on your driving record, which is usually 3 years.

Things get even worse if you get a second DUI.  By that point, you are considered an incredibly risky driver and will likely be paying over $2,000 yearly for the most minimal coverage.  There are also extra penalties for first-time violations which are considered severe, such as those who break the “super drunk” laws.  “Super drunk” is typically considered a blood-alcohol level over 0.15%.  Many states have specific penalties for people who go above this threshold, like required time in jail and much larger fines. You will most likely need to install that ignition interlock device.  That alone costs about $200 plus a fee every month of about $75.

Of course, fear of high car insurance premiums shouldn’t be your only motivation not to drink and drive.  Drunk driving is a leading cause of death in many countries, including the US, Canada, and UK.  Not only do you put yourself at risk, but the lives of those around you are at risk.  Since we rely so much on our vehicles for transportation, it can be hard to avoid driving completely every time you want to have a drink.  That is why it is so important to know your limits before you have a drink. Unfortunately, there is no set way to determine you limits.  It depends on your age, weight, body type, gender and your state laws.  In absence of a set formula for how much you can drink and still legally drive, it is always best to veer on the side of caution.

There are some obvious advantages to bundling your car insurance with other insurance policies.  It is much more convenient to use one insurance company for all or most of your needs.  Instead of having to write tens of checks every year, you can just send out your payments to the one insurance company.  If anything does go wrong, then you will be able to use the same agent for the entire ordeal.  In some cases, this would be especially helpful – like if your garage is broken into and all your tools and cars are stolen.  If you had car insurance and property insurance from the same company, you would only be making one phone call.

The main reason that people bundle their car insurance with other insurance policies is because it can save a lot of money.  The policies themselves can be much cheaper, saving the policyholder several hundreds of dollars yearly on car insurance.  There are also other savings with bundled car insurance as well.  For example, if many assets are damaged in one situation, some insurers only require the policyholder to pay the highest deductable on one policy.  For example, a tornado strikes and takes out your car and home.  If your car insurance had a $500 deductable and your home insurance had a $1000 deductable, you would only pay $1000, not $1500.

However, bundling is not always the best option, financially nor coverage wise, especially for car insurance.  The car insurance business is already so very competitive that it is difficult for the companies which sell multiple types of insurance to offer better deals.  Since the savings for bundling car insurance are so low (if any), it doesn’t make sense to buy car insurance from your other insurance provider. 

In almost all cases, you are limiting your car insurance options if you choose to bundle with other policies.  This can leave you paying, albeit a discounted price, for a policy which isn’t what you really need.  With auto-only insurance companies, you will be offered numerous policy options and may also be offered discounts which aren’t available with bundling, like ticket forgiveness or claim-free discounts.

Before you decide to bundle your car insurance, make sure that you do some shopping first.  You can always add the car insurance to your other insurance policy later, so there is no urgency to decide.  The most important thing with bundling car insurance is to make sure that you are getting everything you need but without paying more for extras which you really don’t need.