Car Insurance Isn’t Boring: Neither is Jimmie Johnson

By: Peter Caldwell

Unless something crazy happens Sunday at the NASCAR season-ending race at Homestead, FL, Jimmie Johnson will win his sixth Sprint Cup title. He only has to finish 23rd or better to guarantee the championship. Some say Johnson’s quiet excellence – he also won the title in 2006, 2007, 2008, 2009 and 2010 – makes him boring.

At AutoInsurance.US, we know how he feels. Some people find car insurance boring, too. That’s until they cause a wreck, have a windshield shattered by a rock, or get their car stolen.

Then they find car insurance pretty interesting. In fact, that’s when most people actually learn what’s in their policies.

We say car owners should take an interest now in what’s in their coverage as well as what isn’t. You don’t want to hit a deer and find out you don’t have comprehensive coverage – the insurance equivalent of Johnson finishing 24th (without leading a lap) and losing the title.

So dig out that policy now and review what’s in it. Here are some coverages you might want to check on:

Liability coverage. Liability coverage is required in some form in every state. It kicks in if you cause a wreck that injures someone else or his or her property. It’s expressed as a three-number ratio such as 100/300/50. In that example, 100 means you have $100,000 worth of coverage for injury per person; 300 means you have a maximum payout of $300,000 per incident for injuries; and 50 means the policy will pay for $50,000 per occurrence. By the way, those are the limits of your coverage – you’re still responsible for amounts over those amounts, so make sure your limits are set high enough.Uninsured/underinsured motorist coverage. It does just what you might expect, helping if the other driver causes a wreck and doesn’t have any or enough coverage. It also typically covers hit-and-run cases when you likely don’t know who caused the accident.Collision. This helps if you’re responsible for your vehicle colliding with an object on the road, as long as that object isn’t an animal.Comprehensive. This covers nearly anything that happens to your car other than a collision. This is what could pay should you hit a deer, for example. Other things covered by comprehensive protection include the theft of your car, glass breakage, hail damage, fire, and flooding.Deductible. The deductible functions like a co-pay in medical insurance. It’s the amount you agree to pay when making a claim. In general, the lower your deductible, the more you’ll pay in premiums for your auto insurance. Conversely, raising your deductible generally will lower your premiums. However, you should exercise great care in using this strategy; you’ll have to be ready to pay this amount should you need to use your coverage.

There’s at least one other thing you should check as you’re perusing your policy. Look at the last time you shopped your coverage with multiple carriers. Why? Because you may be paying too much for your policy. It’s true that many car insurance providers offer loyalty discounts to customers who don’t change providers; it’s equally true that you could save even more by shopping coverage with several highly rated carriers.

So don’t declare auto insurance boring without considering the ways it can help you in a crisis, whether one of your own making or one that a driver makes for you. And don’t deride Jimmie Johnson’s ability to stay out of crises on the track. Sometimes that’s what makes a champion.

Starting out his career as a journalist at a smalltime newspaper, Peter Caldwell now works as a blogger for AutoInsurance.US. With a background in finance writing, Peter is an expert on insurance, closely following regulation and industry news.

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Take Our Pop Quiz on Auto Insurance

By: Caitlin Greenwich

Think you know everything about auto insurance? Take our pop quiz, true or false version, to measure your knowledge.

If I buy a red car, I’ll pay higher car insurance.Some form of liability insurance is required in every state.A hybrid or electric car will cost more to insure than a comparable conventional vehicle.If I don’t have enough money to pay my car insurance premiums, there won’t be any problem if I let my coverage lapse for a few months – as long as I don’t have a wreck.Gap insurance makes car payments for me if I’m short on money.My collision insurance covers me if I hit a deer.If I’m driving and cause a wreck that’s my fault, my insurance company will pay for repairs to my vehicle.My insurance agent asked about my credit report because he wanted to see if I could put my premiums on a credit card.Old cars are stolen more often than new cars.It’s OK to let my friend drive my car – his insurance will pay if he causes a wreck.False. Insurers don’t care what color your car is. An agent will ask you a number of questions about the vehicle – the year, make, model, body type, engine size, and even whether it has daytime running lights. But the agent won’t ask – and genuinely doesn’t care – what color it is.True. Some states also allow you to demonstrate proof of financial responsibility by posting cash deposits or surety bonds, but very few drivers can or do follow this path.False. Some providers consider “green” vehicles to be safer than similar conventional vehicles because they’re heavier and even offer discounts for coverage. However, you should remember that premiums are based on many factors, including your driving record, so even buying a hybrid might not mean lower premiums if you’ve had a number of wrecks or traffic violations.False. A lapse in coverage is one of the worst factors in determining how much you’ll pay for auto insurance. Companies consider continuous coverage as a sign of stability. A lapse, even a short one, can mean much higher rates for coverage.False. Gap insurance is designed to pay the difference between what you owe on a car and what it’s worth. In most cases, interest is front-loaded on a vehicle loan, so there’s a lengthy period in which the car is worth less than you owe on it. If you don’t have gap insurance, you’d still be responsible for paying the difference should you wreck it and suffer a total loss.False. Collision insurance – which is optional, unless your lender requires it – covers you when you hit objects such as trees or other cars. However, it doesn’t cover your car if it collides with an animal such as a deer. Comprehensive coverage would help in this situation.Maybe. Your liability coverage will pay for damage to the “other” vehicle. However, you’ll need collision coverage to help cover repairs to your own car. You’ll also have to pay a deductible before you get any help. Don’t have collision coverage? Then you’re on your own.False. Providers in many states use your credit score to predict your risk of filing a claim. It’s a controversial practice, but carriers believe poor credit habits translate into high risk for them.True. The current car most popular with car thieves, according to the National Insurance Crime Bureau, is the 1994 Honda Accord. The reason: Its parts are pretty generic and can be used in several models.False. In most states, the car owner’s insurance is the primary insurance and must pay for damage or injuries.

So how’d you score? Here’s one last true or false: It’s a good idea to shop my car insurance with multiple carriers every year. True: That’s the best way to get affordable premiums, excellent coverage, and the discounts you deserve.

After a childhood filled with playing soccer, lacrosse and field hockey, Caitlin Greenwich was shocked to discover she had a passion that didn’t involve sprinting across patches of grass: writing. She currently blogs for AutoInsurance.US, avidly following industry news and NASCAR results.

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Grand Theft Auto Insurance?

By: Allison Jane Bradford

Most people will have to buy an auto insurance policy at some point in our lives. It can be a sobering reminder of adulthood, but it’s an essential protection for one of your biggest investments. For a group of video gamers, the first time they purchase car insurance might be through the Grand Theft Auto V video game.

That’s right, the latest installment of the controversial Grand Theft Auto series, in its online version, allows players to purchase car insurance policies for their virtual cars. If their car is wrecked or stolen, they pay a deductible – much as they would in real life, and the auto respawns.

For those unfamiliar with the game, here’s why the GTA franchise is controversial. The “game” allows players to immolate criminals and, as they try to climb to the top of the organized crime ranks, they kill other characters, steal cars, drag race, steal money, and commit a plethora of other crimes, including violence against women.

Critics have savaged the game since the original release in 1997. That, however, hasn’t put a dent in its popularity – the latest iteration generated more than $1 billion in sales in its first three days on the market.

Despite the game’s extreme level of violence, GTA V is exposing a generation of gamers to car insurance, which could be a good thing. The added element of the online game teaches players that in order to protect their cars, they need an insurance policy. So will exposing players to car insurance in the game make them more likely to purchase a policy in the real world?

All states require some form of auto liability insurance. Despite that, the Insurance Information Institute (III) estimates that about 14% of drivers in the U.S. are uninsured.

Driving without insurance has some serious real life consequences. If you cause a wreck, you could be personally responsible for paying the medical expenses of the people injured in it. You also could be liable for their lost wages. Plus, you’ll have to pay to repair or replace the vehicles involved – including your own.

Even if you don’t have a wreck, you could end up with hefty fines, a suspended license and a damaged driving record. And when you finally wise up and purchase a policy, you’ll pay much higher premiums. That’s because you’ve had a lapse in coverage, and auto insurance providers hate lapses.

Some GTA players have noted the oddity that a game filled with so much illegal activity would include something as mundane and real world as auto insurance. While it may seem out of place in a virtual world full of crime, it’s still one of the first games to include an option to buy an insurance policy. While it’s clearly a play for the video game developer, Rockstar North, to make money, it’s also pioneering the inclusion of insurance policies in video games, which could have positive effects on players.

Video games, such as Grand Theft Auto, have been under fire for promoting violent behavior. However, not as much attention has been paid to the potential positive effects. In a 2012 interview with The Wall Street Journal, Joshua Lewis, a computational analyst at the University of California in San Diego, said, “There has been a lot of attention wasted in figuring out whether these games turn us into killing machines.” Lewis, who has studied 2,000 video game players, added, “Not enough attention has been paid to the unique and interesting features that video games have outside of violence.”

Make no mistake, GTA isn’t a pillar of promoting positive behavior, but it’ll be interesting to see if the inclusion of car insurance translates to players becoming more likely to purchase real-world policies. If so, developers could begin including more of these real world aspects across the board. For many, video games serve as an escape from the real world, but the promotion of responsible behavior shouldn’t go unconsidered.

As an undergrad, Allison Bradford felt doomed to live life as a starving poet. Today, she is relieved that professional writing doesn’t necessarily require a vow of poverty. Allison now happily blogs for AutoInsurance.US, covering industry news and motor trends.

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