This article has been reviewed by licensed insurance industry expert Moshe Fishman on 4/9/2025.
Your auto insurance policy is about to renew when you discover your premium is increasing. You haven’t been in an accident, filed a claim, received a speeding ticket, or done any of the things that would normally account for an increase in the cost of your policy. So, what gives with this car insurance rate increase?
Across the nation, car insurance premiums have increased an average of 5%, with some states seeing increases as high as 20%. There are many factors at play, largely due to the aftereffects of the Covid pandemic.
While most of the factors influencing auto insurance premiums are out of the consumer’s control, there are some things you can do if you find your insurance premium is increasing.
According to the US Bureau of Labor Statistics, the Consumer Price Index increased by 8.6% from May 2021 to May 2022. That means consumers are paying 8.6% more for goods and services than they were a year ago. The auto insurance industry isn’t immune to inflation and while the US is in an inflationary period, it’s unlikely premiums for insurance products will go down.
Today’s modern cars, chock-full of safety features, are expensive to repair. Advancements in automotive technology have indeed made modern cars safer, but they’ve also caused repair costs to skyrocket for even the smallest repairs. Car parts that were once considered an easy fix now need to be replaced because of the materials being used. The advanced computer systems require more training to repair, which results in increased labor costs.
Increases in healthcare costs means that auto insurance companies are paying more for medical bills that stem from auto accidents. Being in a severe car accident can result in extensive medical costs for months of physical therapy for the injured occupants. These costs add up.
Even though it’s illegal in most places, the number of people driving without insurance has gone up. Even when the uninsured driver is at fault, the other driver’s insurance will be the one to pay for repairs and medical expenses. This results in an increase in the cost of paying out insurance claims and higher premiums.
The number of drivers who have returned to the office has almost reached pre-pandemic levels. With more drivers on the road, the number of accidents naturally increases as well. According to the National Highway Safety Administration, 2021 saw an unprecedented rise in the number of fatal accidents, increasing by 12% during the first nine months of 2021.
Also, many people continue to favor domestic travel over foreign travel. With the pandemic still placing limits on overseas travel, the popularity of road trips has continued to rise. More people driving greater distances to national parks and vacation rentals results in increased accidents.
The insurance industry is just as vulnerable to changes that occur as any other industry. Some events that happen create higher rates, such as accidents due to a greater number of distracted drivers as well as natural disasters.
Although unemployment is practically back to pre-pandemic levels, many companies are dealing with shortages of skilled workers. The “Great Resignation” has caused many people to change careers, causing labor shortages. With fewer employees, mechanics and repair companies can charge more for labor.
Despite education and warnings about the likelihood of accidents while texting and driving, the number of distracted drivers is increasing. Distracted driving accidents caused by driver inattention tend to be severe and costly, a contributor to increased insurance premiums.
Both 2021 and 2022 have seen an unprecedented number of natural disasters such as floods, wildfires, tornadoes, and hurricanes. Thus, insurance companies have had a rise in claims because of damage and replacement of vehicles affected by weather disasters.
Living in cities and states that have experienced an increase in claims will result in an increase in insurance costs. Insurance companies assume that you’re more likely to be involved in an accident or have your car stolen or vandalized in areas where claims have increased. Even things like changes in state insurance laws can affect premiums.
Various personal factors can cause an increase in your premium including age and driving record. If you’ve had an accident, ticket, or filed a claim, it’s almost guaranteed that your policy will go up. But there are other non-accident-related reasons that can account for a policy increase. For example:
A decrease in your credit score can result in a policy premium increase. But what if your credit score has remained the same? Insurance companies can reconfigure the importance of credit scores when calculating premiums.
For example, if you have a high credit score but your insurer isn’t taking this into consideration, your premium could go up. If you have a good to great credit score, contact your insurance company to make sure they’re factoring in your credit score.
Insurers often give discounts when policies such as homeowners insurance, car insurance, and life insurance are bundled together. If you’ve switched insurers or canceled one of these other policies, your discount for bundling them together will go away.
Although premiums may increase due to several factors, you should stay vigilant and take proactive steps to keep rates in check wherever possible. Here are some things you can do to combat auto insurance premium increases that seem unjustified.
By proactively monitoring your credit score and paying your credit card bills on time, you can avoid policy increases due to a decrease in your credit score. Request a credit report and challenge any discrepancies you may find.
Beyond your credit score, it is a good idea to check the information in your credit report on a regular basis. Incorrect negative information affects your credit scores negatively. Free credit reports are available from each major credit bureau.
It may seem obvious but being a safe driver will keep you from getting into accidents or getting tickets. Talk with other family members on your policy about the importance of safe driving and staying within speed limits. Consider taking a defensive driving course. Your insurance firm may reduce your premium when you show proof of passing such a course.
It’s always a good idea to shop around for car insurance to make sure you’re getting the best deal. When comparison shopping, obtain rates from at least three different carriers.
Check with your insurance agent to make sure you’re getting all the discounts you’re eligible for.
If you have various insurance policies scattered across different insurance carriers, consider bundling them all under one insurer. This will result in a multi-policy discount.
With so many factors influencing insurance rates that are both in and out of consumers’ control, an increase in insurance premiums seems inevitable. But don’t take a back seat and settle for rate increases when there could be something that may save you money.
Contact your agent or insurance company to see what you can do to help ensure your premium doesn’t increase.
This article has been reviewed for updates by licensed insurance industry expert Moshe Fishman on 3/26/2025.
This article has been reviewed by licensed insurance industry expert Moshe Fishman.
Insurance can be a complicated subject. Wading through your policies, endorsements, and other insurance documents is more than some people can bear. Especially when insurance claims are added to the mix. But the importance of insurance can mean the difference between staying protected and losing everything you own. That’s why understanding the ins and outs of insurance and how it covers you, your family, your home, your car, and your belongings are key to helping you ensure financial health.
So, to help you understand the various types of insurance and how insurance works, we’ve put together our 5 Minute Insure blog. The articles cover topics and tips to give you a wealth of information with one easy click. Our goal is to help you make better auto and home insurance decisions without having to be an expert—that’s our job!
At 5 Minute Insure, we take the concept of the “insurtech” (insurance and technology) connection very seriously.
We’re backed by Reliance Global Group, Inc. (NASDAQ: RELI, RELIW), a highly-respected insurance industry company with over 30 years of insurance experience. We bring to our customers top auto and insurance carriers and hundreds of licensed agents to connect with across the country.
Transparency in communication is something we feel strongly about. We created our blog to make insurance more transparent with articles and information that are easy to digest and understand.
So, whether it’s auto, home, or renters insurance, we’ve got the tips and information you’ve been looking for. Sharing what we do best helps you determine what’s best for you! Here’s some of what you’ll find in our blog:
Learn how to save money on insurance, when to think about changing insurance companies, how to shop for quotes, understand insurance costs, and more:
Protecting your home is a priority and a challenge if you’re a homeowner. Here are some articles to help guide you.
Find more useful information and tips to help you make better decisions for your home and auto.
Need more information to help you? Our Learning Center digs deeper into the topics of auto and homeowners insurance with details, examples, and additional information. Here’s what you’ll find in the Learning Center library:
Bottom line: The more you know about insurance, the better armed you’ll be to make the right decisions on what’s best for you.
This article has been reviewed by licensed insurance industry expert Moshe Fishman on March 4, 2025.
If you own and drive a car, you will likely need car insurance since minimal coverage is required by law in most states. But car insurance also helps to safeguard you if you’re in an accident and at fault for harm or injuries caused to others on the road—no matter where you live. Auto coverage provides peace of mind and helps protect you and your car in case of an accident.
When it comes to the right coverage plan for your car, you’ll want to make sure that you choose wisely. Knowing the types of coverages, how they protect your vehicle from damage or loss, deductibles, and cost are important factors to consider when buying an auto policy. So, if you are shopping for car insurance, or comparing car insurance quotes, this article is for you.
Although most states require liability, there are other coverages including comprehensive and collision. Having all three means you are fully covered.
This type of car insurance will help protect you from lawsuits and pay for any damages or injuries to others if you cause a car accident on the road. Since in most states, this liability coverage insurance is required by law, it's critical to have the minimum car insurance limits to meet the legal requirements.
Comprehensive car insurance pays for damages or loss to your own vehicle due to events other than an accident on the road. Coverages include damage from natural disasters such as extreme weather as well as car theft, vandalism, fire damage, and car accidents that occur off the road. While comprehensive car insurance is not required by law in most states, it may be required by your lender if you are buying a new car or leasing your new vehicle.
Collision car insurance covers costs related to damages to your vehicle due to a car accident or collision with an object (e.g., a fence). This type of auto coverage repairs or replaces your car and may be required if you are financing or leasing your vehicle.
Insurance needs can vary from one driver to the next. Reviewing your driving routine, for example, if you commute daily in heavy traffic can help you determine if you may need more coverages. Other coverages that are available include Personal Injury Protection, Uninsured/Underinsured Motorists, Medical Payments, Rental Reimbursement, Emergency Roadside Assistance, and Mechanical Breakdown Insurance.
A deductible is the amount that you must pay out-of-pocket before your car insurance will start to cover the costs. Higher deductibles typically lead to lower monthly car insurance premiums since your insurer will have less to pay out when an accident or other covered event occurs.
As you decide on a deductible amount, you might think about what type of event could cause damage to your vehicle. For example, if you are someone who lives near a lake but due to your location has a lower risk of flooding, you might want to consider higher car insurance deductibles to lower your premiums.
On the other hand, if you are at a higher risk to be at fault for damage due to a car accident with another vehicle or while parking in a public place, you’ll want to choose car insurance with a lower deductible. Choosing your car insurance deductibles should be based on how much potential risk applies to you and what type of damage or loss can result from that scenario. Keep in mind that a lower deductible generally means a higher premium, and so, higher monthly payments.
You should also consider how much you can afford to pay out of your own wallet before your insurance begins to cover the damages or loss. Since accidents and other covered events are unexpected, it’s a good idea to save enough money to cover your deductible amount. Sometimes, out-of-pocket expenses are considerable.
Your insurance agent will advise you about the effect of a higher deductible on insurance costs. If you are receiving an insurance quote online, you can see the difference in insurance rates from a variety of carriers, as you change your deductible.
In the event of a covered car accident, theft, or vandalism, your auto insurance will pay for your car repairs or replacement minus any deductibles. So, if you have a car insurance deductible, you are responsible for paying that amount in the event of a car accident before your insurer will pay on your claim. Typically, deductibles are a minimum of $500 but it’s not unusual to have deductibles in the range of $1,000 or more.
Another factor to consider is who pays for damages when a car accident occurs with no clear "at-fault" driver, or the fault is shared. The party deemed “at fault” in an accident is responsible for paying for the damages or loss to the other driver’s vehicle and property. When the fault is shared, both are responsible for damages or loss. In some cases, depending on what state you live in, car insurance companies may pay for car repairs or replacements without requiring you to pay the deductible.
But what happens when two people share the same car and both have car insurance? If you and your roommate, for example, share the same car, it would make more sense to share an auto insurance policy. In addition, it’s illegal to have two people with separate policies on the same car to file a claim with two different insurance companies for the same event. In addition, most insurers will not insure the same car twice.
While car accidents are often caused by negligent drivers who have car insurance, there is also the possibility of being injured in a car accident with an uninsured or underinsured driver. This is the best reason to consider uninsured/underinsured insurance coverage. In addition, depending on your state, you may be required to purchase Uninsured Motorist insurance.
While you may think you might not be affected by someone running around without or not enough insurance, you’ll quickly learn why this coverage is important when you get in an accident with an uninsured driver. Who will pay for your injuries and damages to your car?
Being protected with uninsured coverage will help to pay for any accident-related car repairs (Property Damage) and medical bills (Bodily Injury). For example, if your arm is broken in a car accident with an uninsured driver and miss work due to these injuries, this insurance will cover the loss of wages and car repairs.
Underinsured coverage pays for damages (Property) and accident-related medical expenses (Bodily Injury) when a driver only carries the minimum state requirements and not enough to cover expenses.
In Conclusion
Auto insurance is an important part of the expense of owning a vehicle. While it doesn’t cover everything, it can help to protect you, your car, and your finances. Check with your agent or insurance company to help decide what may be best for you. If you’re a new driver or your current policy is up for renewal, it’s a good idea to compare quotes and coverages. Meanwhile, continue safe driving, and keep your driving record clean.
This article has been reviewed by licensed insurance industry expert Moshe Fishman on 2/25/2025.
We all know it’s important to have a good credit score, but what exactly are the benefits of having one? Your credit score determines whether you’re approved for a loan or a credit card, and what the interest rates will be. It also influences things such as your likelihood of being approved for an apartment rental and how much you’ll pay for auto and homeowners insurance. All good reasons why you want to raise your credit score.
Having a high credit score usually translates to paying less money overall for things such as interest, insurance, loans, and even utilities. The good news is that anyone can improve their credit score. Even if your credit score is in the low-to-average range, by following these tips, you can increase your credit score by as much as 100 points in as little as 30 days.
The first step to improving your credit score, sometimes called a FICO score, is to understand how credit scores are calculated. There are three credit bureaus that analyze credit: Experian, Equifax, and TransUnion. In fact, your credit score may vary depending on which credit bureau generates the report. This is because various creditors and lenders don’t necessarily report to all three credit bureaus.
The credit bureaus take a number of factors into account when determining credit scores. These factors include your payment history, credit utilization ratio, credit mix and age, and how much you owe. Let’s look at each of these factors in more detail.
The biggest factor influencing your credit score is how often you pay your bills on time. Late or missing payments will negatively affect your credit score. If you tend to miss payments, sign up to have your bills paid through autopay.
Your credit utilization rate is just what it sounds like: how much you utilize the amount of credit available to you. Your credit utilization rate is the sum of all the balances of your credit card accounts divided by the sum of your cards’ credit limits. It’s the second biggest factor when it comes to calculating your credit score.
Let’s say you have three credit cards with $200 charged on each one and a credit limit of $1000. To calculate your utilization rate, divide the total balance ($600) by your total credit limit ($3000), then multiply by 100. Your credit utilization rate would be 20%.
Generally speaking, lenders like to see a credit utilization rate of less than 30%. If your rate is higher, you’ll want to pay down your credit balances. Note: If you ask your credit card issuers for a credit limit increase, and it is granted but you don't use it, your credit utilization rate would drop.
Credit age refers to how long you’ve had a line of credit. The longer you’ve had a line of credit, the better it is for your overall credit score. That’s why it can be better to keep a line of credit open rather than closing it, even if you’re not utilizing it.
Credit mix refers to the different “mix” of types of credit you’re utilizing. Student loans, car loans, a mortgage, and credit cards all fall under the credit mix. Having a variety of different sources of credit (and paying them on time) is positively viewed by lenders and shows you have a thorough understanding of credit basics.
This refers to the amount you owe or the balance on all your lines of credit. Generally, it’s best to pay off the amount owed when paying your credit bills as this shows lenders that you’re a responsible borrower.
Here are some surefire ways to improve your credit score.
For people who don’t have many lines of credit or who haven’t had credit for long, you can help your credit age by building and establishing credit. Here are some ways to build your credit.
Designed specifically to build credit history, a secured credit card is used the same way as a normal credit card but is backed by a cash deposit.
Just like secured credit cards, credit-builder loans are specifically designed to help people with little to no credit establish and build credit history. Offered through credit unions and smaller banks, it’s imperative that you make your credit-builder loan payments on time.
If you’ve had a credit card for a while, have kept your balance low, and have been making your payments on time, request a credit limit increase from your credit card company. Keeping the balance low on a card with a high credit limit will lower your credit utilization score even more.
Also known as “credit piggybacking,” you can build your credit by becoming an authorized user on someone else’s credit. Ask a friend or family member with a high credit score if you can be added to their account as an authorized user. You don’t need to use their line of credit to reap the benefits as their history of prompt payments will also be reported on your credit history.
Ask your property owner and utility companies if it’s possible for them to report your timely payments to the three credit agencies. Although they’re not a type of credit and therefore don’t normally appear on credit reports, having your history of timely payments on file can help establish good credit.
Adding to your credit mix will help establish credit. For example, if you only have one type of credit, consider adding several types. If you only have student loans, open a credit card, or apply for a credit-builder loan, and vice versa.
For people with low credit scores who don’t have serious credit issues such as bankruptcies or foreclosures, improving your credit score will take time. The good news is that when your credit score is low, there’s nowhere to go but up. By making your payments on time, keeping a mix of credit, and keeping your credit utilization rate low, your credit scores are bound to go up.
This article has been reviewed by licensed insurance industry expert Moshe Fishman on February 7, 2025.
Anyone who’s ever owned a car knows that it’s a big financial investment and surprises can pop up when you least expect them. There are unexpected recalls, repairs, and breakdowns. No matter how long you’ve driven your vehicle, the reality is that it’s a machine with several moving parts. And those parts are bound to eventually wear out, requiring auto repairs.
Since most states only require you to carry liability insurance, you may not be familiar with breakdown insurance. Some auto insurance companies offer breakdown insurance for an additional monthly fee or premium.
This car insurance helps you budget for breakdowns, such as the loss of a transmission or a blown head gasket, once the manufacturer's warranty has ended. Mechanical breakdown insurance is separate from your liability or full coverage. It’s also different from an extended warranty. Here’s what you need to know.
Whether you purchase or lease a car, you’re responsible for all maintenance and repairs. Both new and used vehicles can come with limited warranties, depending on the cars’ age and the number of miles. Although warranties are standard with brand new vehicles, some dealerships will offer select warranties on certified used cars. These select warranties are generally not offered for older vehicles.
For example, you might get a 90-day warranty on a certified vehicle’s major parts. However, any repairs outside of a warranty come at full cost. An extended warranty can help cover these expenses, but owners often need to pay upfront. Breakdown coverage added to your regular policy allows you to pay for car repair insurance in monthly installments.
That said, breakdown coverage does require a deductible. It’s similar to your liability or comprehensive coverage. You pay $250 or $500 per claim. Then, your insurance foots the bill for the remainder of the repair costs as long as they’re covered.
Breakdown coverage does not cover the cost of routine repairs or maintenance, such as oil changes and brake replacements. It helps you pay for repairs that fall outside of the definition of normal wear and tear. Breakdown coverage also does not cover repairs for damage related to extreme weather or an accident. Your regular car insurance handles these types of coverages.
One of the drawbacks of breakdown coverage is you have to add it when you purchase the car. The insurance coverage is usually added to your policy when you agree to take it out with your agent. If you’re buying a new or used car with a warranty, the mechanical breakdown coverage will coincide with the warranty. However, your warranty will kick in first.
Therefore, you may find yourself paying for coverage when you don’t really need it. But unlike extended car warranties, you can’t decide to take out the coverage later when an overlap doesn’t exist.
If you add mechanical breakdown coverage, you won’t have to worry about major breakdown costs after your warranty expires. Unlike an extended warranty, you can take your vehicle to the repair shop of your choice. And you can budget your premium costs over several months instead of forking over a large amount at once.
Talk to your insurance agent when you take out your liability or comprehensive coverage policy. If that provider doesn’t offer mechanical breakdown coverage, research online to see which carriers offer these coverage options. You may save money by bundling all your car insurance coverages with a single company.
In most cases, cars with over 100,000 miles are not eligible for mechanical breakdown coverage. Some repair shops won’t perform work like transmission fluid changes and flushes at this many miles. High mileage vehicles also stand a greater chance of breaking down or needing major work due to wear and tear.
For example, a Honda Civic is known for its ability to run for hundreds of thousands of miles. Still, once the vehicle’s odometer reaches 100,000, you have to occasionally put in thousands of dollars to maintain the car.
Just because a vehicle has a good track record doesn’t mean it lasts forever. Eventually, the engine and other major parts cost more to maintain and repair than replace. Check with your insurance agent about the specific car you’re thinking of buying.
If you have a VIN, the agent can get most of the details they need. Without a VIN, you’ll want to provide year, model, trim level, and existing mileage (if any). Another problem some owners run into is coverage for luxury or high-value vehicles. Some may not be eligible for breakdown coverage.
While your costs will vary by provider and vehicle, mechanical breakdown coverage is generally affordable. It’s usually under $100 a year to add the coverage to your policy. When compared to the costs of extended warranties, breakdown coverage is more affordable.
Considering that you may never use an extended warranty or breakdown coverage, it doesn’t make sense to pay thousands of dollars for three years of coverage versus a couple hundred for six years of protection. Remember that breakdown coverage is a type of catastrophic car insurance. You’re essentially hedging against a bunch of what-ifs.
The answer comes down to how long you see yourself owning the vehicle. Approach the decision like buying versus renting a home. If you intend to stay in the residence or area for a long time, it usually makes more sense to buy.
Likewise, if you tend to keep driving your cars for 10 years or more, breakdown coverage is probably worth it. But if you’re leasing a vehicle or intend to trade in your car within five years or less, don’t add the coverage to your policy. The chances that you’ll need it are slim to none.
There are other third-party companies that will provide an extended warranty beyond 100k miles but do your homework. Be sure to check reviews on such companies and know exactly what repairs and coverages the warranty will cover. You may also want to check with the Better Business Bureau to see if complaints have been reported regarding repairs coverage, customer service, etc.
Mechanical breakdown insurance helps cover the costs of unexpected, major repairs on your vehicle. It’s a low-cost way to bet against your odds of running into huge expenses once your warranty expires, and it may give you peace of mind. You can add the coverage when you take out your liability or comprehensive auto insurance policy. However, be sure that it makes sense for your driving habits and needs.
This article has been reviewed by licensed insurance industry expert Moshe Fishman on January 24, 2025.
There are a variety of anti-theft devices on the market that can protect your car from being stolen. Anything from a kill switch to a complex anti-theft system. But did you know that these devices can also help reduce your car insurance rates and save you considerable amounts of money? Yes, insurance companies offer discounts for keeping your vehicle safe.
To help you get the most out of your car insurance while paying the least amount possible, we've compiled a list of some of the most popular anti-theft car devices and how they can impact your rates. So, car thieves, beware!
One of the most popular anti-theft car devices is an immobilizer. This device prevents your car from starting unless the key is inserted correctly. Immobilizers work by sending a signal to the car's engine that will not allow it to start if the key is not in the ignition. It can be a great way to protect your vehicle and deter thieves, as they will not be able to steal your car without the key.
Another popular anti-theft device is a car alarm. These have been around for a long time and are still used today. A car alarm is a system that emits an audible sound when someone attempts to open a car door or window when the alarm is engaged. The sound of the alarm is meant to scare away potential thieves and draw attention to the car so someone can help.
A car tracking system is a newer anti-theft device becoming more common. This system consists of a small, GPS-enabled device installed in your car. The vehicle tracking system then updates a monitoring center about the car's location.
So, if your vehicle is ever stolen, the tracking system will help law enforcement officials track it down. The great thing about GPS systems is that they can also be used to track your car's movements, so you can see where it has been. Yes, you can find your stolen vehicle.
Similar to GPS trackers, a vehicle recovery system is a GPS tracking device that helps law enforcement officials recover your car if it is ever stolen. This system consists of several components, including a VIN (vehicle identification number) sticker, a microchip, and a database. If your car is ever stolen, the microchip will be activated, and the database will help law enforcement officials find the vehicle location.
While it might not necessarily prevent your car from getting stolen in the first place, it will help with the recovery process.
A steering wheel lock is a simple device that locks your car's steering wheel. With the steering wheel locked, a potential thief that breaks into your car won't be able to turn the steering wheel and thus won't be able to drive away with your vehicle.
It can be a great way to prevent thieves from driving off with your car. Steering wheel locks are also very affordable, making them a popular choice. Additionally, steering wheel locks are visible to potential thieves, which act as a deterrent.
A brake pedal lock is similar to a steering wheel lock, except that it locks the car's brakes instead of the steering wheel. A brake lock prevents your vehicle from being driven away even if the thief can start it because the thief won't be able to put the car into gear since they can't depress the brake pedal. Like steering wheel locks, brake pedal locks are also affordable and visible to potential thieves.
Intelligent keys and locks are newer anti-theft devices that are gaining popularity. These systems use a keyless entry system to unlock your car. The way it works is that you have a key fob that you carry with you, and when you are near your vehicle, the key fob will send a signal to the car that will unlock it.
It is a great way to prevent thieves from breaking into your car and stealing your belongings, as they won't be able to get in without the key fob. While intelligent keys and locks are great anti-theft devices, they can also be expensive. However, the investment may be worth it if you live in a high-crime area.
Another way to protect your car from theft is to enroll in a company subscription service. These services work by installing a tracking device in your vehicle linked to the company's monitoring center.
If your car is ever stolen, the company will track it down and help law enforcement officials recover it. In addition, they can often shut down the vehicle remotely to not be driven. As with some other anti-theft and recovery devices, while this may not prevent your car from being stolen in the first place, it can help with the recovery process.
If you have an anti-theft device installed in your car, you may be able to get a car insurance discount. This is because having an anti-theft device can help reduce the risk of your vehicle being stolen. Car insurance companies often offer discounts to drivers who are considered low-risk.
The best way to make sure you get a vehicle discount is to contact your car insurance company and ask about their policies regarding anti-theft devices. They will tell you if you are eligible for a discount and how much it would be. Remember that different anti-theft devices may offer different levels of discounts, so you may want to install more than one device to get the best deal.
If you have a popular make and model, a sports car, or a collector car, you may want to consider installing and/or updating anti-theft devices in your vehicle. Anti-theft devices are a great way to protect your car from being stolen. While some of them may not prevent theft from happening in the first place, they can help with the recovery process if your vehicle is ever stolen.
Many anti-theft car devices can also help you get a car insurance discount since they are considered low-risk. Contact your agent or insurer to learn more about their anti-theft devices and discount policies.
This article has been reviewed by licensed insurance industry expert Moshe Fishman on 1/6/2025.
Receiving a cancellation notice from your auto insurance company can come as quite a shock. You’re probably wondering why your auto insurance is being canceled and how it’ll affect your ability to find insurers to issue you a new policy.
Many people are surprised to learn that auto insurance can be canceled for numerous reasons. Let’s look at the most common reasons why an auto insurance company would cancel your policy. Keep in mind that these reasons could apply to any driver who’s on your policy.
One of the most common reasons for auto insurance cancellation is due to a lack of payment. If you don’t make your car insurance payment in a timely manner, it’ll be canceled. Although most insurers give their customers a 30-day grace period for non-payment, after the 30 days are up, your insurance may be canceled.
If you‘re wondering if your low credit score can have your policy canceled, it is more likely to affect your insurance premiums. You can find out what information is in your credit report by requesting free credit reports from Equifax, Experian, and TransUnion. You will see your Fico score, the credit accounts they monitor, your credit card usage, payment history, and similar.
Should your policy be canceled due to lack of payment, this information will not show up on your credit report. According to Experian, “your policy doesn’t appear on your credit report” as insurers don't typically report payments to the credit bureaus.
If you provide false information when obtaining an auto insurance quote or on your application, and your insurer finds out about it, your policy can be canceled. Even lying through omission can be sufficient reason for your insurance company to cancel.
For example, say you failed to add someone who regularly drives your car or mistakenly give the wrong address where your car is garaged. Providing false or inaccurate information is considered material misrepresentation and is grounds for cancellation.
This should be a no-brainer. If you have too many at-fault accidents, speeding tickets, or moving traffic violations, your insurer could cancel your policy.
License suspension is a serious matter. If your driver’s license is revoked or suspended, your insurance company is within its right to cancel your policy. There are many reasons why a driver’s license can be revoked or suspended such as driving under the influence of drugs or alcohol, unpaid parking tickets, a failure to pay court-ordered child support, and leaving the scene of an accident. Whatever the reason, do not drive without insurance.
Making a fraudulent claim or including false information when you file a claim are grounds for cancellation. When filing an auto insurance claim, be sure to include only true and accurate information on your claim forms.
Having certain medical conditions that affect your ability to safely operate a vehicle can result in an insurance cancellation. If you’re diagnosed with epilepsy or a heart condition, you may be required to provide a physician’s certification stating that you’re able to drive safely.
If you’re convicted of a felony or a serious crime involving a motor vehicle, such as driving under the influence or committing assault, your policy could be canceled. Your state's Department of Motor Vehicles will have information about this.
Driving a vehicle that fails to pass an inspection or one that has severe mechanical problems that cause it to be a threat to public safety are grounds for cancellation. Maintaining your vehicle and staying on top of state-required inspections are necessary to keep your car insurance.
If you’re using your car for business purposes, your policy could be canceled. If you’re a rideshare driver for Uber or Lyft or using your car to deliver food or groceries, these are considered “business use.” Failure to obtain a commercial auto policy or a rideshare add-on when using your car for commercial or business purposes can result in losing your insurance.
Insurance companies are required to notify policyholders in writing about their auto insurance cancellation. They must notify you of the reason for terminating your policy and when it will take effect. This amount of time between receiving notification and the day the termination takes effect varies depending on individual state laws. Check with the Department of Insurance in your state.
Once you receive a notice, contact your insurance company immediately. Ask why your insurance is being canceled and clarify any misinformation your insurer might have. If your insurance is being canceled due to non-payment, you may be able to get your policy reinstated by paying off the premium. It's easier than finding coverage with a new insurer.
Paying off your parking tickets and traffic violations might also result in your policy being reinstated. However, if your insurance is being terminated for a suspended license or DUI conviction, you’ll be unable to get it reinstated.
The reason for your policy cancellation will determine your ability to get new car insurance. If the reason is a minor one or was a simple mistake, you’re more likely to easily find a new insurance company that’s willing to give you a policy.
For example, if you forgot to disclose that you added another driver or for non-payment of your premium. You can expect to pay a higher premium after losing your policy. Comparing quotes from different companies is a good idea. Insurance rates do vary by company.
If your license has been revoked or suspended or if you’ve been convicted of driving under the influence, finding new coverage from standard providers will prove difficult. You’ll need to check with insurance companies that specialize in what is known as “high-risk” auto insurance.
Assigned-risk pools are state-sponsored organizations that help high-risk drivers obtain auto insurance. If you’re unable to obtain insurance from a high-risk insurer, coverage should be available through your state’s assigned-risk pool. Depending on what state you’re in, this is also referred to as a “shared market” or “residual market.”
Assigned risk auto insurance is only available to high-risk drivers who’ve been denied auto insurance from standard and high-risk auto insurers. In every state, auto insurance providers are required to participate in the assigned-risk pool.
Once you’re granted coverage through your state’s assigned-risk pool, expect to pay higher premiums for the minimum level of coverage required by your state. And that minimum varies by state. After three years in an assigned-risk pool, drivers who’ve paid their premiums and kept a clean driving record should be able to return to a standard insurance company.
If you’ve been issued a cancellation notice from your current auto insurance provider, don’t delay when it comes to finding new coverage. You don't want to be caught driving without insurance. That is a crime in most states and even a short lapse in coverage can result in higher premiums.
This article has been reviewed by licensed insurance industry expert Moshe Fishman on 12/26/2024.
You’ve been in a car accident. The other driver is at fault. That means the other driver’s car insurance will pay for everything, right? Not necessarily.
Suppose the other driver doesn’t have auto insurance, or their insurance won’t cover the damages. They may even flee the scene of the accident. Scenarios such as this are why uninsured motorist coverage exists.
You might also be surprised to learn that uninsured motorist coverage isn’t a requirement in most states. Learn about uninsured motorist coverage and underinsured motorist coverage to understand the differences between these two types of coverage and whether they’re something you should consider adding to your auto insurance policy.
Depending on which state you live in, uninsured motorist coverage is either an optional or required policy addition that provides coverage for damages and injuries sustained in an auto accident because of the actions of an uninsured driver.
Uninsured motorist (UM) coverage takes effect in the event of an accident where the other driver is at fault and:
Uninsured motorist insurance is represented by two coverage types as follows:
Some drivers only carry the minimum amount of liability coverage legally required by their state. Their liability limits might easily be exceeded. Underinsured motorist coverage protects you in the event of an accident caused by a driver who has insurance but isn’t sufficiently insured to cover the total amount of damages and costs.
When it comes to Underinsured Motorist coverage, you’ll find that there are two types of coverage.
Covers the gap between the at-fault driver’s liability insurance limits and the total expenses of medical bills and any wages that were lost as a result. , etc. But does not cover vehicle repairs or medical bills in an accident that you cause.
Underinsured Motorist Property Damage or UIMPD covers the gap between the at-fault driver’s liability insurance limits and the total amount of damages to your car or your property.
Understanding Uninsured Motorist Insurance is noted by 100/200. The first number refers to the amount of bodily injury coverage per person. The second number refers to the amount of bodily injury coverage per accident.
Does Uninsured Motorist Coverage pay for hit-and-run accidents?
Yes, uninsured motorist coverage provides coverage in the event of a hit-and-run accident. If your car is damaged while parked and the person at fault doesn’t leave a note, this should also be covered.
Currently, there are twenty-two states requiring uninsured motorist insurance. Here is the list in alphabetical order: Connecticut, Illinois, Kansas, Maine, Maryland, Massachusetts, Minnesota, Missouri, Nebraska, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Oregon, South Carolina, South Dakota, Vermont, Virginia, Washington DC, West Virginia, and Wisconsin.
The percentage of people driving around without insurance varies from state to state. In 2019, the state with the highest number of uninsured drivers was Mississippi, where approximately 29.4% of drivers did not have insurance. According to the Insurance Research Council, other states with a high number of uninsured motorists include Mississippi, New Mexico, Michigan, and Tennessee. The state with the lowest number of uninsured drivers in 2019 was New Jersey, where only 3.1% of drivers did not have insurance.
Even if you have good health insurance, uninsured motorist coverage is a good idea for several reasons. UMBI and UIMBI will cover the medical bills due to the accident including co-pays and deductibles. Depending on your insurance, this could save tens of thousands of dollars.
With health insurance, you might be limited to a network of providers, whereas UMBI will pay for care from a wider variety of sources. For serious accidents that will require months of rehabilitation, being able to choose your provider is a definite advantage. Also, UMBI pays for the medical bills of the passengers who are in your car at the time of the accident.
Uninsured motorist coverage is cheaper than you’d think, especially considering how much it can save you in the event of a major accident. Depending on which state you live in, the cost of uninsured motorist coverage depends on the number of uninsured motorists in your state and tends to be higher in states with a high percentage of uninsured motorists.
However, uninsured motorist coverage generally runs between $50-$75 per year. This includes both bodily injury and property damage coverage. The usual factors will affect the premium cost such as the policy holder’s age and driving history and how much coverage is purchased.
Unless you live in a state where uninsured motorist coverage is required, you’re not required to have it. However, that doesn’t mean that you shouldn’t consider adding it to your policy. Considering the relatively small expense, the peace of mind that it’ll provide is worth the cost. Check with your insurance agent or carrier to see how much it’ll cost to add uninsured motorist coverage to your policy.
This article has been reviewed by licensed insurance industry expert, Moshe Fishman on 12/10/2024.
Do you ever use your car for business purposes? Are you a small business owner who occasionally asks employees to use their personal cars for business purposes? If so, you may need commercial auto insurance. That’s because a personal car insurance policy doesn’t cover the use of a personal vehicle for the transportation of goods or business ventures.
But what exactly is considered “business use” and “personal use?” The difference between personal use and business use can be tricky to define, even when consulting the definitions provided by car insurance companies.
In a nutshell, vehicles used for any business purposes will need to be covered under a commercial auto policy. In addition, if you ask your employees to drive for business purposes, you need commercial auto insurance. So, this means company cars and family cars used for business purposes.
Take a look at these scenarios illustrating the differences between personal versus commercial uses and the appropriate category of insurance coverage:
| Personal Auto Insurance | Commercial Auto Insurance |
| Picking up morning coffee for co-workers. | Delivering coffee to customers as a food delivery driver. |
| Driving friends to a party or a camping trip. | Transporting clients to work-related events or log high mileage driving to job sites. |
| Picking up a friend at the airport. | Picking up clients at the airport. |
| Driving to the construction site where you work. | Hauling equipment to a construction site for your company. |
Once you determine the extent of use of a vehicle for business purposes, it’s important to provide the insurance policy with the right type of coverages.
Commercial auto insurance is like personal auto insurance in that it covers liability, comprehensive, collision, and uninsured motorists. Usually, the premium is more expensive, and the coverage limits are higher. This is because vehicles are used more frequently and are thus more likely to be involved in costly accidents.
There are additional types of commercial auto coverage that are included with commercial auto insurance that are generally not available with personal auto coverage. Here are some of these additional coverages.
Generally, commercial auto insurance doesn’t cover tools or equipment being carried or transported by the vehicle; these would be covered under a business owner’s policy. A homeowner’s or renter’s insurance policy would cover personal belongings in the vehicle.
No. Commercial auto insurance does not apply to business owners and contract employees who work for ridesharing companies. Rideshare insurance is required for drivers who work for companies such as Uber and Lyft.
Premiums vary from company to company so it’s best to shop around to ensure you or your company are getting the best price. Commercial auto insurance is guaranteed to be costlier than personal auto insurance. Coverage limits tend to have a minimum of $500,000 and can be more than $1 million.
Insurance carriers use several factors to determine their rates. These are the main factors that influence the price of a commercial auto insurance premium:
If you work for a company and use your personal vehicle occasionally for work, a personal policy with the right coverages may meet your needs. When getting a quote for a personal insurance policy, be sure to mention that your car is being used occasionally for business.
If you change employers and this becomes a requirement for your job, you should let your current insurance company know. Not letting your insurer know may result in not being covered for any work-related accidents, even if you use your vehicle for work infrequently.
When it comes to commercial auto insurance, it’s better to be covered than be sorry when the unexpected happens. Check with your insurance company to see what type of policy is right for you.
This article has been reviewed by licensed insurance industry expert Moshe Fishman on 11/27/2024.
For many people, running a small business out of the home has its advantages. The ability to be your own boss, set your own hours, the lack of a commute and potential tax breaks are some benefits. Working from home in your pajamas is definitely a dream if you’re a late riser.
But what about the drawbacks when you run a home business? What things should you be aware of that could spell trouble for home business owners? If you’ve ever thought about starting a home business, here are the pros and cons of home-based businesses that you should consider before you start your business.
The ability to make your own hours and set your own schedule is a decided advantage to operating a home business. If you’re a night owl, you might find that you get more done working late at night, something a traditional office job doesn’t allow for. You might want to work weekends and leave weekdays free for appointments and errands. You can also take a vacation whenever you want without having to worry about being blocked out during “crunch times” at a typical 9-5 job.
Not having a commute saves time, money, and the aggravation of driving back and forth to an office. Just the idea of driving in traffic can be stressful and take a toll on your health. Plus, you’ll pay a lot less for gas, car maintenance, and auto insurance.
Working from home allows you to keep up with household tasks and chores that tend to pile up when working a 9-5 gig at the office. You’ll no longer dread coming home to piles of laundry, stacks of dishes, and an empty refrigerator. Instead, you can start a load of laundry or dishes and run errands whenever you need to and when it’s most convenient.
The initial startup costs of a small business are significantly reduced for home-based businesses. You’ll save on the cost of office furniture and equipment, the installation of a phone system, renting commercial office space, and the subsequent utility bills and insurance. These advantages might simplify your startup business plans, and help you run a successful home business.
The tax benefits of running a home-based business are plentiful. You can deduct expenses associated with your business such as equipment, gas and mileage for your car, property taxes, part of your rent or mortgage insurance, and even some home maintenance expenses such as remodeling or expanding your home.
If you use a part of your house or apartment exclusively and regularly for your business, such as a guest bedroom or garage, you’ll qualify for a home office deduction. The key words here are exclusively and regularly. To claim this deduction, you can’t use that extra bedroom as both an office and a guest room. Regular use entails using it consistently for business purposes.
Not only will you avoid office politics, but you also won’t have to adhere to an office dress code. This means you can work in pajamas or dress up—it’s entirely up to you. You’ll skip the water cooler talk and probably be happier for it.
Although being your own boss means avoiding conflicts with a real boss, it also means you need to be disciplined to get work done. With no one hassling you about deadlines or supervising your work, your level of productivity and the quality of work you produce are entirely up to you.
When you answer only to yourself, you’ll need to be disciplined, diligent, and efficient to accomplish your business goals. If you lack self-discipline, being a home-based small business owner may not be for you.
If you live with roommates or a spouse/partner and have children or other household members who put demands on your time, creating a distraction-free work environment might prove difficult. Family responsibilities, domestic conflicts, and constant interruptions may impede the ability to be productive. Having a dedicated, private space for conducting business might be impossible to maintain.
On the other hand, running a home-based business can interfere with your ability to devote time to your family. Even though you’ve set your own work schedule, once your business takes off, you may find that you’re working evenings and weekends to keep up with the work demands. This can put a strain on family time if it’s frequently being taken up by your business. Establishing a work/life balance is essential for people with families.
Working from home can be a lonely and solitary process, especially if you run a small business that doesn’t require you to leave the home. It can be especially difficult for people who have spent their careers working in collaborative, social settings. Some people find inspiration and motivation from brainstorming meetings and bouncing ideas off coworkers. Without the camaraderie, inspiration, and socializing of an office, you may find you’re just not as motivated as you once were.
Depending on the type of business, running it from your home has the potential for credibility issues among potential clients. You’ll need to project an image of professionalism if you’re in an industry where this is important.
If you’ll need to meet with clients, creating a space where you feel comfortable meeting them will be challenging. If you’re not comfortable with having potential clients in your home, you can arrange to meet at a café or restaurant or consider renting a coworking space that offers meeting rooms.
All businesses must provide an address for public and corporate records, even if your business is entirely online. When your home address is your business address, you might have concerns about safety and privacy. You might run afoul of local zoning laws, and/or require specialized licensing and permits to run your business from home.
Options to avoid listing your home address as your business address include registering for a Post Office box, mailbox service, or coworking space.
Without a brick-and-mortar store, you won’t get customers off the street. You’ll need advertising materials and marketing campaigns to let people know about the products or services your business provides. Opportunities for networking will also be minimum due to the lack of interaction with other people.
There are many advantages and disadvantages to running a home-based business. And not all of the potential benefits or drawbacks are listed here. For example, you’ll want to be sure to check with your insurance agent on the need to purchase a commercial policy when running a business out of your home.
Ultimately, it’s up to you to decide whether you have what it takes to make it work despite the potential drawbacks. You might find that a combination of working from home and renting a coworking space is the ideal fit.
