Are Arizona Car Insurance Rates Criminal?
· by Matt Fox · posted September 3, 2009
· filed under Arizona Auto Insurance category.
I saw a question online that asked why insurance companies are allowed to get away with criminal practices. I thought that was a funny question but understand the frustration and anger many people experience with their insurance companies. We hear these complaints when people call in for quotes.
While it may seem criminal for a company to raise your rates if you move to an area with more claims, have a teenage driver, or because you had an accident, there is a lot more to your rates than the insurance company wanting to take a knife and cut out your heart.
Insurance companies pay a lot of money for research and track every bit of claims activity they have on their policy holders. They don’t look at your individual policy and say, “Did you notice Joe in Phoenix Arizona looks like he should be charged more because of (name reason here)? Let’s raise his rates.” In fact, you as an individual are probably not even noticed by the company.
Insurance companies lump you in with a group of people and don’t rate “you” as an individual. The principle is to have a large pool of people pay a little amount each year to pay for the few people of this pool that have large claims. Generally, this is where people get ugly about the idea of insurance because they don’t want to pay for other people’s claims. What they don’t realize is you don’t need to buy insurance for anything…really.
If you want, the state of Arizona requires you to carry liability insurance on your vehicles in case you’re at-fault for an accident. However, you can post a bond or proof of financial stability and put $40,000 away for the state minimums, you don’t need to buy insurance. However, if you want to finance a new car then the lender will require coverage but you can pay cash for your car and not buy insurance.
Now, back to the criminal nature of insurance companies. Here’s a list of some of the important rating factors:
- The zip code you live and garage your cars in
- Your financial stability (aka your credit information)
- Do you have prior insurance and what are your prior liability limits?
- The driver’s ages
- Accidents and claims
- Married or single
- Types of vehicles insured
- Miles driven annually
- Some even use education level and current career as rating factors
This list isn’t every rating factor for all insurance companies but it’s a ‘big chunk’ most companies use to start rating your policy. Credit, prior insurance, and where you live are the big factors to consider when starting to rate your policy and establishing the base rate. Tickets and claims are only discounts or surcharges against that base rate and, while they’re important, they’re not the fist place insurance companies look to start your rates.
This is where it can be very important to shop your rates occasionally. While the company you’re with had great rates when you switched to them, they may have had many losses and other factors that have justified them to creep your rates up over time. There are other companies that may have lowered their rates or have a better loss experience for you and your situation which would allow you to save money today. So, don’t be afraid to shop around occasionally. We make it easy here so take 3 minutes and fill out our quote form to compare your rates.
Leave a CommentArizona Auto Insurance Basics
· by Matt Fox · posted August 23, 2009
· filed under Arizona Auto Insurance category.
This is a quick summary of Arizona Auto Insurance coverage options. Each company will have slight variations on each coverage and options available but this is a simple summary that explains how each coverage will protect you if you were in an accident, your fault or not.
After looking this over, take 3 minutes and fill out our quick quote form to get your Arizona Auto Insurance quotes.
You can print or save a copy for your personal use to reference and ask your agent any questions. Naturally, this is written as of today’s laws and does not replace what your policy actually says regarding coverage and limits. It’s simply a useful guide to prepare yourself as you’re shopping for quotes and comparing rates and coverage.
Leave a CommentArizona Auto Insurance Rate Changes
· by Matt Fox · posted August 14, 2009
· filed under Phoenix Auto Insurance category.
The past couple of years have seen some add changes in Phoenix auto insurance rates. As an independent insurance agent we get to see one company drastically raise their rates while another drastically slashes their rates. However, one thing remains constant, the way insurance companies rate Arizona Car insurance is changing and becoming more complicated.
We often hear, “I don’t have any tickets or accidents, why don’t my insurance rates go down?” Well, Phoenix auto insurance rates are more complicated than just tickets and accidents. Here are some factors most people don’t think about that can effect rates on your car insurance in Phoenix…and all of Arizona.
- Your credit – I know you’re thinking, “What does credit have to do with insurance?” Well, a lot I guess because it’s a huge rating factor and is often where insurance companies base your tier placement first. This tier placement is then a percentage discount or surcharge off the base rates of your car insurance. So, bad credit equals higher insurance costs. They have proven a correlation that bad credit equals higher claims rates. I don’t know if it’s true but if you’re worrying about money while driving down the road, chance are you’re not totally focused driving.
- Where you live – Insurance rates are based on geographic conditions. Someone living in downtown Phoenix will probably pay more than someone in North Scottsdale or on the skirts of Chandler, Gilbert or East Mesa. Why? More accidents will occur in downtown Phoenix because there are more drivers there every day. More accidents in your zip code equals higher rates.
- Glass Claims – Non-fault accidents, including glass claims generally will not cause you to lose your good driver discounts. However, many companies are now counting glass claims as a reason to place you in a higher tier for rating, like credit. This is because those with 1 or 2 glass claims per year are likely to have 1 or 2 in the next couple years. This causes the overall price of insurance to rise for everyone and they want to ‘section off’ those with high glass claims from those without.
Please, don’t yell at me. I’m just the messenger that quotes the rates. I don’t make the rates.
While insurance is there to pay for claims. Be careful on what you claim. If your windshield has a chip in it, repair the chip don’t replace the entire windshield. If you can do anything to improve your credit, do it. If you’re thinking about moving ask you agent about rates in the new zip code.
If you want to compare rates, fill out our easy 1 page quote form and let us shop your Phoenix AZ Auto Insurance for you.
Leave a CommentShopping For Phoenix Auto Insurance?
· by Matt Fox · posted August 12, 2009
· filed under ATVs, Boats, Other Toys, Arizona Auto Insurance, Auto, Homeowner, Motorcycle category.
Are you shopping for Auto Insurance in Phoenix, Mesa, Scottsdale, Gilbert, Tucson or anywhere else in Arizona? Beware of what forms you fill out online. There are online companies that sell your information to insurance agents and you have no control of who or where they sell your information. Watch this short video explaining what to watch out for.
Shop Arizona Auto Insurance Quotes Here!
1 CommentArizona Car Insurance Basics
· by Matt Fox · posted November 22, 2008
· filed under Arizona Auto Insurance, Auto category.
This is a very quick overview, hopefully in plain English, of coverage options you can choose for your Arizona auto insurance policy. You may want to read this as you look at your policy to make sure you have the coverage you want.
Bodily Injury Liability – This protects you if you’re at-fault for an accident, or someone you let drive your car is at-fault for an accident, and physically injure someone else. Simply stated, you hit someone and they’re hurt. This coverage will pay for the other person’s injuries, up to your policy limits. It will also pay for your legal defense if they sue you. This coverage is required by Arizona law and does not cover the driver of your car.
Property Damage Liability – This is similar to Bodily Injury Liability above but instead of paying if you injure someone, it pays when you damage things from your at-fault accident. This pays for the damage you cause to another person’s car, house, motorcycle, wall, light pole, etc. This is required by Arizona law and does not cover damage to your vehicle.
Uninsured Motorist – This pays you and/or passengers when someone hits you and is at-fault for the accident and they have NO insurance or it is a hit and run accident. This is for your Bodily Injury claims only and does not cover your car.
Underinsured Motorist – Similar to Uninsured Motorist above, this pays you and/or passengers when someone hits you and is at-fault for the accident and they don’t have enough Bodily Injury Liability coverage to pay for your damages. This is for Bodily Injury claims only and does not cover your car.
Medical payments – This pays for reasonable medical and funeral expenses up to the policy limit regardless of fault. It covers you and any persons in, entering, or exiting your vehicle. Basically, someone gets hurt in your car, regardless of fault, the policy will pay for their medical bills up to the policy limit.
Collision Coverage – This pays for damages to your car, truck, motorcycle, etc. from collisions. If you run into a car, a tree, a house, etc. then this is usually the coverage triggered to repair your car. You have to pay the deductible and the insurance will cover the rest up to the actual cash value of the car. You can increase your deductible and lower your premium. Or, you can lower your deductible and increase your premium.
Comprehensive (aka Other than Collision) Coverage – This pays for damages that are not caused by a collision: hail, wind, fire, theft, falling objects, vandalism, collision with an animal, acts of God, and others perils. You pay the deductible and the insurance will pay the rest up to the actual cash value of the car. You can increase your deductible and lower your premium. Or, you can lower your deductible and increase your premium.
Full Glass Coverage Option – This is an option to add to your Comprehensive coverage that eliminates you paying the deductible for a "glass only" claim.
Rental Reimbursement – This pays for a rental car when your car is damaged and covered by a collision or comprehensive claim. The insurance company will pay for a rental car while your vehicle is being repaired up to the policy limits.
Towing/ Emergency Road Service – In the event your vehicle becomes disabled, the insurance company will pay to have your vehicle towed up to policy limits.
As I said originally, this is a very breif description of policy coverage options. I simply want to provide an easy to read, plain English answer to common questions. If any of this doesn’t make sense or you have more questions, leave a comment or give our office a call.
Now for the legal disclaimer – All coverage descriptions here are not intended to, and do not, describe, summarize or represent the actual language, terms or conditions of any auto insurance policy you may purchase. The auto insurance policy you purchase will define and describe the coverage, terms and conditions of your policy. Each insurance company is different and each state’s coverage options are different. Always Read Your Policy and discuss with your agent .
2 CommentsMy Favorite Veteran
· by Matt Fox · posted November 11, 2008
· filed under Personal category.
Today is Veteran’s Day. Despite what you see advertised, Veterans Day is more than a reason for every retail store to hold a sale. It’s the day we’re to remember and celebrate the people that serve our country.
Most people won’t notice today’s meaning and will simply become irritated because they can’t get their mail. It’s an important day to me because it always reminds me of my grandfather. He retired from the Air Force with over 30 years of service. Listening to his stories of what he did before he shipped off to serve during World War II, what happened during the war, and his travel and life after the war are some of my favorite memories.
He passed away a few months after my son was born. He was the greatest guy I ever knew.
Leave a Comment