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Texas
Auto Insurance
An informational
guide on TXAIP Texas high risk and
Texas preferred risk automobile
insurance.
Where you live or, more precisely,
where you keep your car at night has
a bearing on your chances of having
an accident or becoming a victim of
theft or vandalism. That's why a vehicle
owner in Dallas, Texas, pays a higher
rate than the owner of an identical
vehicle in Brownsville, Texas.
Factors affecting regional insurance
rates include time and efficiency of
police response and law enforcement,
local road and traffic conditions and
the quality of local medical services.
Insurers even factor in the litigation
rates in a given area--that is, how
many lawsuits are filed, go to trial,
are settled out of court and for how
much.
Why are
rates different for different cars,
even if the cars cost the same?
Auto insurance companies
also group cars according to their chances
of being damaged, vandalized or stolen.
Insurers generally consider the size
and type of vehicle, as well as the
value and the cost of repairs which
vary greatly, even on vehicles that
cost about the same amount. Therefore,
it is assumed that a new sport utility
vehicle is expected to hold up better
in an accident than a sports car or
a subcompact or electric hybrid car.
Putting insurance aside
for a moment, safety is key when buying
an automobile. Your life and everyone
who rides with you depends on it! Some
cars are considered safer than others
because of their performance record
in safety tests and real accidents.
That is why Texas consumers
should research insurance coverage before
you buy their car. It helps you to understand
the actual cost and indicates those
vehicles with good safety records. Your
insurer will ultimately reward you for
putting safety first.
What is "no-fault"
insurance?
No-fault insurance
is a system adopted in some states that
essentially bypasses the conventional
legal procedure which finds fault in
an accident. This is the procedure by
which you hire a attorney, file suit
and possibly go to court to prove the
accident was the other guy's fault.
No-fault simply does away with the concept
of one party or the other being at fault--no
lawyers, no court, no judge, no jury,
no lengthy lawsuits against the other
party. This is considered beneficial
to taxpayers, because it eliminates
costly legal proceedings that the state
must manage, and to insurance policyholders,
because it helps keep rates down.
If you are insured in
a no-fault state and have an accident,
you don't go after the other driver.
You contact your own insurer and file
a claim. Your own insurance policy guarantees
you immediate compensation for damages,
medical expenses, lost wages, essential
services, rental car arrangements etc.
The type and range of
no-fault coverage varies from state
to state. What defines the limitations
of no-fault policies can differ in two
important areas:
- Threshold--The
type of damage or injury or the
cost of repair or recovery that
triggers the need for legal action.
- Mandated--Benefit
Level The package of benefits (medical,
wage loss, replacement services
and other expenses) your state requires
you to carry.
The details of
No-fault insurance can be complicated.
Contact your agent or state's insurance
department for further information.
No. Some states, while
not mandating auto insurance, have what
is known as financial responsibility
laws that require all drivers to be
able to pay for any damage or injury
they may cause. However, carrying liability
insurance is still the best way for
you to meet your state's financial responsibility
requirements once you know what they
are.
UM and UIM policies are offered by law
in all states, including no fault states.
In fact, some states require all motorists
to carry this coverage in order to gain
protection from inadequate insurance
coverage of other drivers that may not
carry enough or higher limits as the
majority does; i.e., 100-300-50,000.
First, call the police
to the scene to be sure all pertinent
information is properly recorded. Your
nerves will be shaken right after an
accident, and it helps to have a calm
and knowledgeable person walking you
through the necessary details.
Then, contact your agent
or policy holder services or claims
number usually on you ID Card immediately
and ask about filing a claim. If you
followed all the recommended guidelines
and procedures when you bought your
policy, you should be covered within
the benefits and or limitations of that
policy. Remember, your car insurance
policy is designed to protect you and
anyone in your vehicle.
If the cost of your physical damages
or personal injuries exceed the amount
your policy will pay for, it may be
time to take legal action against the
other party. Even if you have
No-fault insurance, sometimes
the only way to be compensated is to
place blame and responsibility where
it belongs. That is why it is best to
get a police report documenting the
incident and any witnesses statement
while it is fresh in their minds. This
will preserve that moment in time and
remove any room for doubt later in the
legal process.
It is better to have
the police report and not really need
it , than it is to need one for court
and not have one because it would have
taken another thirty minutes to an hour
extra at the incident scene.
Technically, in most
states your insurer can cancel your
policy only if:
- you fail to
pay your premium;
- you lose your
driver's license;
- you are guilty
of material misrepresentation during
the application process i.e., you
fail to notify your insurer of a
recorded violation, such as a drunken
driving, or possession of drugs
or any illegal activity offense;
or
- you fail to
report a substantial change of risk,
such as buying a new high performance
sports car to replace an old high
mileage family sedan.
However, your insurer
can choose not to renew your policy
for a variety of reasons.
Do you have a bad driving record? Have
you received a lot of speeding tickets?
Have you ever been caught driving drunk?
Not only are these scenarios considered
unsafe and illegal, they are justifiable
cause for your insurer to label you
a bad risk and refuse to renew your
policy. Some underwriters may feel compelled
to cancel policies after only one accident.
Where do you live? Has
the neighborhood changed in the last
few years? Have the accident or crime
rates risen noticeably? As regions are
reassessed periodically, their status
could change and you could suddenly
find yourself living in a higher risk
area, where your insurer's rates may
not be adequate to cover losses.
Even "good" drivers can
find themselves in the position of being
dropped by their current carrier. Reasons
range from a couple of moving violations,
or multiple accidents, or other serious
violations that make you a high risk
to situations outside your control,
such as when insurers in your state
are suffering severe business losses.
Overall rises in claims or losses can
cause insurers to become highly selective
in determining whom they can afford
to offer to insure.
That is why it is important
to note that if you are licensed to
drive, by law, you are eligible for
insurance. However, your options for
new coverage may be limited. Each state
has created and regulates a market of
last resort for those who cannot otherwise
obtain coverage. These groups have various
names, depending on the state you live
in, such as assigned risk automobile
insurance plans or the residual market,
or the high risk pool. Your agent will
know more about the particulars in your
state.
Regardless of the reason
you were dropped or cancelled by your
insurer, you need to act immediately
to get another policy. Under no circumstance
should you drive your vehicle without
knowing one hundred percent that you
have current insurance. Call your local
agent to help you find new coverage.
If you do find yourself in the assigned
risk residual market pool, the price
may be higher but it may be your only
alternative in maintaining your freedom
to drive.
The most obvious way
to maintain your low risk status is
to keep a clean driving record. If you've
been in an accident, consider taking
a defensive driving course. Even those
of us who have been driving for years
rarely know the simple tricks to preventing
accidents through defensive driving.
Also, look into purchasing special safety
and security features for your car,
such as anti-lock brakes and an alarm
system, or try OnStar. Your ARAIP insurance
agent can give you further tips on how
to convince your insurer you're a safe
driver.
Insurers often discount
their rates in order to encourage good
driving practices and the use of safety
and security precautions. Depending
on the insurance company, you can often
lower your rates from 5 to 55 percent.
Sometimes the investment you make in
your vehicle is worth the discount,
and sometimes it's simply worth some
peace of mind. For example, the purchase
of anti-lock brakes merits a discount
from nearly every insurer, but the discount
probably will not pay for the brakes
which cost several hundred dollars during
the normal life of your vehicle. Anti-lock
brakes may or may not offer savings,
nonetheless, as a life-saving feature
and deserves serious consideration when
safety is a top priority. Insurers generally
offer discounts for:
- Safety
Features Anti-lock brakes,
air bags and passive restraint systems
i.e., automatic seat belts.
- Defensive
Driving Clean violation
record, driver's education courses
for teenagers and defensive driving
or accident prevention courses for
adults insurance discounts for the
latter are required in some states.
- Security
Systems Alarms, electronic
locks, VIN etching and automotive
disabling devices.
- Changing
The Driving Habits Try
commuting by public transit, using
a company vehicle for work-related
travel and car-pooling.
- Formal
Agreements Not to Drink and Drive
The availability of a discount for
signing such an agreement varies
among insurers and states, however
is a powerful idea that works.
- Buying
Home Owners and Auto Policies from
the Same Company If you
own a home and an automobile and
you are insured by two different
companies, check into the cost of
carrying both policies by one insurer.
Your agent can give you guidance
as to which insurers offer discounts.
This will always offer your the
best buy, so put it in your corner
when shopping for rates
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