One of the biggest misunderstandings that new drivers have about auto insurance is in the idea that car insurance covers normal wear-and-tear type of damages to their vehicle. The truth is, your property damage coverage is not designed to cover these types of issues. Let’s review quickly what is- and isn’t- covered under a standard auto insurance policy.Property damage coverage is one part of the three broad types of car insurance coverage: property damage coverage, liability coverage and medical coverage. Property damage coverage pays for the physical damage to, or theft of, your vehicle depending on the coverages you have.

Physical damage to your vehicle may be covered under one of the two following types of coverage:

• Collision Coverage
• Comprehensive Coverage

(These coverages are not always required by your state or lender so you should check your policy to see what is covered on your specific policy.)

Collision Coverage covers damages to your vehicle in the event that you collide with an object (other than an animal) on the roadway or incur damages due to an upset in the roadway. For example, collision would cover damages to your vehicle in the event of an accident with another car, a road sign, phone pole, etc.

Comprehensive Coverage covers an array of other damages including (but not limited to) those caused by fire, theft, wind, vandalism and mischief, flood, hitting an animal, glass breakage and hail.

Normal wear-and-tear or maintenance issues, however, would not be covered under your auto insurance policy. This is why it is important to properly maintain your vehicle’s engine, electrical and other systems. Car insurance typically covers unforeseen and unexpected damages caused by specific perils (as listed above). So, if you car’s electrical system failed simply because it was old or possibly defected, this would not typically be covered by your auto insurance policy. However, if your electrical system failed because of flood damage to your vehicle- and you have comprehensive coverage on the car- you might have coverage.

If you have a question about a specific claim, your best bet is to contact your auto insurance agent or refer to your car insurance policy.

The Nano- Costs Only $2,000

The world’s cheapest car debuted in India recently and came as an answer to the issue of providing safe and inexpensive transportation options to families in India.

In India scooters are a tremendously popular form of transportation even for an entire family. Time reporter Jyoti Thottam describes in this article how his family often traveled together on one scooter where his father would drive, he would stand in the front holding onto the handle bars and his mom would ride on the back holding his baby sister.  The low cost of scooters make them an attractive mode of transportation for families in New Delhi. Inexpensive- but still very unsafe.

Tata Motors, the largest automaker in India spent six years developing their solution and it is called The Nano.  The Nano costs the equivelant to US $2,000.  About the same cost as a scooter.

For more photos of the low cost, lightweight Nano visit Time’s photo gallery. Now wouldn’t it be nice if the car came with the ‘World’s Cheapest Car Insurance’…

Senior Citizen Car Insurance Discounts

For a long time, seniors (typically ages 65 and up) have been offered special discounts by an entire realm of businesses especially the entertainment industry (restaurants, movie theatres, etc).  Now, seniors are also eligible for car insurance discounts which can save them up to 10% or more on their auto insurance policy.

Car insurance companies are rewarding older drivers for their experience on the road. Studies show that senior drivers also exhibit more patience and caution on the road. (At least more than, let’s say, the typical teen driver).

Some car insurance companies offer a similar discount called a retiree discount.  This is a similar discount aimed at lowering car insurance rates for drivers 65 and older.

Retiree and senior citizen discounts range from 5-10% or sometimes more which can save the typical senior driver a great deal of money on their auto insurance.

Senior drivers who want to save more money on their car insurance premiums may also want to consider taking a defensive driving course. This can sometimes save drivers an additional 10-15% on their auto insurance premium. >> See a full list of car insurance discounts

What is it about a great song that makes you want to drive a little faster than usual?

VHI.com has published their list of the all time greatest driving songs.  These are the kinds of songs that make you turn up the music and cruise.  But be careful- many a driver have been known to lean a little heavier on that gas pedal when they hear one of these tunes.  I wonder what is it about a great driving song that makes us want to drive a little faster than usual?

Here are the top 1o Songs that your auto insurance company wants you to avoid!

1-Steppenwolf - “Born to be Wild”

2- Bruce Springstein- “Born to Run”

3- AC/DC- “Highway to Hell”

4-Sammy Hagar- “I can’t drive 55″

5- John Mellencamp- “R.O.C.K in the USA”

6- Van Halen- “Panama”

7- Prince- “Little Red Corvette”

8- Lenny Kravitz- “Are you Gonna Go My Way”

9- ZZ Top- “Legs”

10- Sheryl Crow- “Everyday is a Winding Road”

This flying car made it's maiden voyage last week

It looks like something out of the Jetson’s- for those of you who remember the 1980’s cartoon about the futuristic family. A flying car has reportedly made it’s maiden voyage last week at an airstrip in Plattsburgh, NY. Not really a flying car- but more of a “roadable aircraft” as it is being called, the Transition is a vehicle that can be driven on public roadways at highways speeds and flown in the air as an aircraft.

However, for those of you with visions of taking off on the Interstate to cruise above impending traffic, let it be known that currently the aircraft can only take off and land from an approved general aviation airport.

The vehicle is supposed to go on sale as early as 2011 for about $195,000. I’d be interested to know what type of auto insurance coverage will be needed for this new invention!

Get Your Car Ready for Spring

While some parts of the country are still experiencing bitter cold temperatures, others are starting to thaw out a bit in preparation for Spring.

Since harsh winter weather can be rough on your car, here are some tips for getting your car back into tip-top shape for Spring:

1- Give you car a good hand wash and check for any scratches or other damage that can be caused by ice and salt. If you find any, make sure you purchase some touch-up paint and fill the scratches as soon as possible to avoid rust damage.

2- Give your wheel wells a good scrubbing to remove any salt or dirt that can eat away at the metal and cause rust.

3- Clean your windshield and check for chips and/or cracks.  Small chips might be able to be fixed without replacing the entire windshield.

4- Check your wiper blades, typically the Spring is a good time to replace them.

5- Clean your interior well and take note of any areas where wet boots or shoes may have let water accumulate in your vehicle.

6- Check any vinyl and treat it with a vinyl treatment product.  The extreme cold and forced heating in your vehicle over the winter can cause drying and cracking.

7- Change your engine oil and filters

8- Have your antifreeze tested

9- Check your tire pressure as temperature changes can affect it.

How Moving May Affect Your Car Insurance

So you’ve got your boxes packed and the moving truck loaded up.  Chances are, if you purchased a new home you already have your homeowners insurance straightened out- however- have you remembered to update your car insurance policy?

On your auto insurance policy, your home address is also considered your “garaging address”.  This address may affect your car insurance rates depending on the crime rate and theft rate in the new neighborhood.

Are you moving in with any new drivers?  If your roommate situation is changing and there are other drivers in your home- you are typically required to report this to your auto insurance company. Drivers in your household may need to be added as occasional drivers on your policy since they have access to your keys and your vehicle.

Lastly, it is important to update your insurance company with your new address for billing purposes. If the paper bill that you receive in the mail every month is your reminder to pay your premium on time- you don’t want to risk having your bill lost in the mail and your payment being late. Let your car insurance company know of your address change 1-2 weeks before your move, if possible, in order to avoid any lost bills and late payments.

Be sure to add your teenage driver to your car insurance policy

It’s the moment every teenager anxiously awaits- and every parent feels has come too soon. It’s the day your teenager gets their driver’s license.

By this time, you have hopefully already spent hours behind the wheel with your teen practicing the best driving tactics and safety tips.  However, before you send them off on their own behind the wheel, you should consider your auto insurance coverage.

Any time you have a new driver in your household, it is your responsibility to add that person as a driver on your car insurance policy.

Just as you would add a new spouse to your policy because you now share a home, you must add your newly licensed teenage driver to your policy as well. Because they are licensed, and have access to your vehicles, they need to be included on your policy in order to provide coverage for accidents that could occur while they are driving.

Rates for teenage drivers are often high because of the lack of experience they have on the road. So, you may see a considerable increase in your auto insurance premium after adding them to your policy. Typically, a new driver must be licensed for 3 years before they are eligible for an Experienced Driver Discount which you are most likely already taking advantage of. However, there are other  discounts that young drivers may qualify for. For example, most auto insurance companies offer a “Good Student” discount if your teen maintains an A-B average in school. Be sure to ask your insurance company about the specific discounts they offer for new drivers.

We understand the apprehension that goes along with sending your child out on the road by themselves for the first time.  You might want to consider having your child sign a Teen Driving Contract which can help lay the ground rules- and consequences for breaking them- while behind the wheel. >>Print a Free Teen Driver Contract

>Part I: Marriage
>Part II: New Job
>Part III: New Teenage Driver

Insurance Fraud costs Americans about $80 billion year on average

When financial times are tight insurance fraud always seems to spike. You hear more and more stories of homeowners who torch their own homes; drivers who “accidentally” leave their  keys in their car in a neighborhood with a high crime rate;  or even some who fake their death to collect on a life insurance policy.

The truth is, insurance fraud is not only a crime- it is an easy way to rack up insurance premiums for the offender and everyone else around them. The Coalition Against Insurance Fraud (CAIF) estimates that every U.S. family pays about $950/year out of their standard premium because of insurance fraud (that’s about $80 billion/year total!).

Fraud statistics are difficult to compile because there is not one government agency that focuses on compiling this data, however, the CAIF reported that in 2007  there were 4,848 arrests made for insurance fraud in the U.S. Out of those arrests, 4,228 convictions were made.

For a look at how those arrests break down by state, visit the Coalition’s insurance fraud stats page.

How a New Job May Affect Your Auto Insurance

Congratulations! You’ve recently acquired a new job. Now the question is- how does this change in your employment affect the rest of your life?  Changes in your auto insurance are just one of the things to consider.

First, part of your car insurance rate is based on the number of miles you drive to and from work and/or school everyday.  If your daily commute changes (for example the distance between home and work), you should contact your insurance company and inform them of the change.

Also, if you are acquiring a new job that requires you to travel in your vehicle more than just your normal commute (for example meeting with clients, traveling to meetings)  you might want to consider additional auto insurance coverage for business travel.

Is your new job requiring you to relocate? A change of address- even within the same city- is a big reason to contact your car insurance company.  One of the factors determining your premium is your vehicle’s primary garaging location. Your change of address may change your auto insurance rates if your new residence is considered to have a higher/lower crime rate, accident rate, etc.

Lastly, but not least importantly, if your new job offers an increase from your previous salary, you may want to consider adjusting your car insurance deductible accordingly. Remember, your deductible should always be an amount that you are comfortable paying in the event of claim.  If your new job puts you in a position where you can now afford to pay out more in the event of an accident, for example,  then you may want to increase your deductibles. This typically means that you will pay a lower monthly/annual premium.

Other Insurance Changes to Consider with a New Job
Medical- One of the biggest changes that may occur with a new job could be your health insurance. Depending on whether or not your new employer offers medical benefits, you may be eligible for company paid (or partially paid) medical benefits.

Life- Another insurance benefit that your new employer may offer is a life insurance policy.  If you are unsure of your benefits you should ask your human resources department.

Auto Insurance and Life Changes Series

>Part I: Marriage
>Part II: New Job