Insurance Helper Blog




Congratulations On Your New Car – Don’t Forget The Car Insurance

It’s a big day for almost anyone.  Driving home from the car dealership in that brand new car is thrilling to say the least.  And even if you are buying a gently used car, it’s still new to you and that can be very exciting.  But before you head over to visit your friends and relatives to show them your new ride, be sure that you settle all of your insurance issues related to this new vehicle.

Car dealers want to make the process as painless as possible for their buyers.  For this reason, they often agree to call in the car change to the insurance company on your behalf.  After all, they have plenty of other paperwork to do on this transaction and they know what has to be done.  But as an insurance agent with thousands of family clients, let me add my warning.  Don’t leave this job to your car dealer or to the finance company that is loaning you money for the car.  Mistakes and oversights happen and we are finding more and more cases where we discover that one of our clients purchased a car several months back and no one has ever notified us of this change.   If you find out that this wasn’t done after your car has been totaled in a wreck then you could be out a large sum of money.   This particularly boring part of buying a car is your responsibility and something that you should do yourself and not delegate to a third party.

With that in mind, just what are the rules in your policy regarding how much time you have to notify your insurance company of a change of vehicles?  Let me preface the following by saying that this blog is oriented around the North Carolina Personal Auto Policy form and if you are in another state, or if your vehicles are covered by a commercial policy then what you read below may not be accurate for your particular situation.  Also, let’s keep the attorneys happy here by saying that whatever you read in this blog may or may not be accurate for your particular situation and that there is no substitute for reading your policy as what is written there will supersede anything that you read in this blog.

Whew, with all of those disclaimers out of the way, let’s move on to what the NC Personal Auto policy says regarding vehicle changes.  First of all, the policy form addresses this issue by setting up two different categories of vehicle changes, which I will call replacement vehicles and newly acquired vehicles.  The replacement vehicles language refers to the situation when you are replacing one vehicle with another one.  Newly acquired vehicles will refer to the situation where you have added an additional vehicle and kept all of the existing vehicles.  Let’s look at each situation separately.

For replacement vehicles, the policy reads as follows:  “If a newly acquired auto replaces a vehicle shown in the Declarations, it will have the same coverage as the vehicle it replaced except that coverage, if any, under Part D – Coverage For Damage To Your Auto applies only if you ask us to insure it within 30 days after you become the owner. “  What that means to me is that if you replace one vehicle with another then your liability insurance will apply to the new vehicle no matter if you forget to tell the insurance company or not.  But your physical damages coverages under coverage D, the collision and comprehensive coverage, will not apply to the new vehicle unless you remember to tell your insurance company within 30 days of you becoming the owner of the new vehicle.  So in this instance if your car dealer forgets to call in the car change, and you don’t realize it, then after 30 days you will have no comprehensive or collision insurance on that vehicle if it replaced a vehicle that had comprehensive and collision coverage.  Of course if the replaced vehicle only carried liability insurance, then that is all that you will ever have on the replacing vehicle unless you contact the insurance company to let them know of the change and to request additional coverage.

What about the case where you add a vehicle but it doesn’t replace any vehicles on the policy?  In that case the policy reads this way: “If the newly acquired auto is in addition to any shown on the Declarations, it will have the broadest coverage we now provide for any vehicle shown in the declarations if you ask us to insure it within 30 days after you become the owner.”  Here you can see that your comprehensive and collision coverages will be automatically applied to the new car as long as at least one other car on your policy has these coverages.  But no coverage at all will be in force for that new car if you don’t ask the insurance company to add the car to your policy within 30 days.

The bottom line is that it is your responsibility as the car owner to notify your insurance agent or insurance company of your new vehicle right away.  Leaving this detail to a car dealer might put your protection and thus your assets in jeopardy.

Clinard Insurance Group, located in Winston Salem, NC insures thousands of families all across North Carolina.  If you need help with your auto or home insurance, please feel free to call us, toll free, at 877-687-7557.


Big Brother Auto Insurance – The New Backseat Driver

If you thought your mother in law in the backseat was a challenge to your driving skills, consider this: auto Insurance companies are plunging headfirst into the world of telemetrics.  Telemetrics is the measuring of data regarding your driving habits with the goal of providing you with auto insurance rates that more accurately reflect your true driving risks.

It has always been the goal of insurance industry executives and underwriters to try to better understand exactly which clients will cause losses on their insurance policies.  In the world of auto insurance, the tools that insurance companies have had at their disposal in the past have been relatively crude.  They can make judgments about your driving abilities based on the kind of car you drive, your age and number of years driving, your past traffic violations and past auto insurance claims.  I’ve often thought that charging higher rates for speeding tickets for instance seemed a bit misdirected and inaccurate.  I’ve seen quite a few clients with a high number of speeding tickets who never had an accident or filed an insurance claim.  Another good example of how crude these measurements are can be seen in the huge rate increases that everyone has to pay when their sixteen year old child first gets his or her license and is added to the parent’s policy.  Not every new driver has accidents, but the insurance company has no way of knowing which child has a greater risk so they all just have to pay enough to cover each other.  But what if the insurance company could watch this young driver every time he or she drives?  Would they then be able to make better decisions about which young driver is most likely to cause an accident?

Enter telemetrics, the newest underwriting science in auto insurance rates.  While some smaller insurance companies have nibbled around the edges of this concept, recently the adoption of telemetrics by State Farm Insurance, one of the largest auto insurers in the country is bound to push this trend amongst all auto insurers much more quickly.  That is, assuming it works well for State Farm.  Telemetrics is the gathering of data about your driving habits via small telemetric devices which plug into the car’s diagnostic ports.  This data is then sent to the insurance company and analyzed to determine if the driver deserves a discount refund for safer driving.  Right now most of these programs are focused on offering cash back discounts for good driving behaviors but are not designed to generate additional rate increases for the drivers who don’t make the grade.   That approach is almost certain to change should this form of auto rating, often referred to as usage rating become more commonplace.  For now, this new technology is still in a testing phase and insurance companies would be hard pressed to get people to sign up if they risked higher rates for doing so.

So what are insurance companies that use telemetrics looking at in your driving data?  Generally speaking they are monitoring your speed, the number of miles driven, the time of day that you drive, your acceleration and deceleration habits and how hard you take turns.  Most also claim not to monitor your seat belt usage, the exact location of your car or your speed relative to the posted speed limit at that location. 

Critics of telemetrics as a car insurance rating device focus primarily on the privacy aspects of data.  Collecting this much data on U.S. drivers certainly puts insurance companies in a powerful position.  While they don’t currently plan to collect detailed data about where you have traveled, as telemetrics become more commonplace it can be assumed that more and more data will be collected.  Over time your insurance company could build quite a detailed record of the routes you have taken and when.  And once the data is compiled and collected, it might fall into the hands of law enforcement or even your separated spouse’s divorce lawyer or some other civil liability suit attorney.    In addition, as more and more people accept the loss of privacy in order to try for more discounts; this will almost certainly leave those with privacy concerns having to pay much higher auto insurance rates just to maintain their privacy.  This is a slippery slope in a world where we are all losing more and more of our privacy each day.

If you need any help with your auto insurance or your home insurance, please feel free to call my office, toll free, at 877-687-7557.