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Tuesday, 16 October 2018 08:00

What’s the PATH Act?

The purpose of the PATH Act The Protecting Americans from Tax Hikes Act (PATH Act) has been around since late 2015, and one of its key provisions is intended to protect taxpayers and their families from tax fraud.

When you’re looking for auto insurance savings tips online, you’ll see one tip that gets repeated frequently: if you own an older car, then you should reduce your insurance coverage.

Many people know about this tip, but not everybody knows why or how to reduce insurance coverage on an older car. Today, we’re explaining why doing so can help you save – literally – thousands of dollars per year.

You Don’t Legally Need Comprehensive or Collision Insurance on Your Vehicle

When we talk about “car insurance”, we’re not talking about one single insurance policy. We’re talking about a group of five or so different insurance policies.

As a legal minimum, all but one state in America requires you to have at least liability insurance. If you don’t have liability insurance, then it’s illegal for you to drive on the roads in that state.

Interestingly, New Hampshire is the only state that doesn’t require liability insurance. However, they do require drivers to prove they have sufficient funds to cover damage caused by an at-fault collision. Effectively, that means most New Hampshire drivers require liability insurance.

Liability insurance means that you’re protected against any costs or damage you may inflict on other people and property during the course of your driving – including bodily harm and property damage.

Liability insurance is the legal minimum. It’s also relatively cheap.

However, most of America’s drivers don’t have the legal minimum. Most drivers have comprehensive insurance and collision insurance:

Collision Insurance: Collision coveragecovers damage to your car when your car hits (or is hit by) another object.

Comprehensive Insurance: Comprehensive coverage covers losses related to incidents caused by your collision, like flooding or property damage, etc.

You May Be Paying More for your Insurance Than your Vehicle is Really Worth

Here’s my point with all of this information: if you drive an older vehicle, then you may be paying more for your insurance policy than your car is truly worth.

That means you’re paying more for your insurance policy than you would likely receive in the event of a collision.

In other words, you can save a considerable amount of money by dropping collision and comprehensive coverage from your insurance policy. It’s not legally required in any state.

By dropping comprehensive and collision insurance from your plan, you can save hundreds of dollars per year. Some people will even save thousands.

Don’t Immediately Spend the Extra Money You Save

So you just saved $100 per month on your car insurance plan. That’s great! You may be tempted to spend that money.

However, that’s not really a good idea. If you’re smart financially, then you’ll put that money in an emergency fund. If you do get into a collision, then you may need to pay for vehicle repairs out-of-pocket (or buy a new vehicle).

Basically, an emergency fund acts as your own insurance plan. The best part about this plan is that you get to hold onto your money. Instead of giving your money to your insurance company every year and hoping nothing happens, you can hold onto your money. In the best case scenario, that money is yours to keep when you retire your car from the road in the future.

When Should You Cut Collision and Comprehensive Insurance from an Older Vehicle?

This is a tricky question. There isn’t some specific vehicle’s age or mileage when you should absolutely cut comprehensive and collision insurance. There isn’t some vehicle value-to-policy cost ratio you need to check.

However, there are some general rules you can follow when deciding whether or not to remove collision and comprehensive insurance from an older vehicle.

If your vehicle suddenly needed significant repairs, would you decide to replace the vehicle?

Ask yourself this question. If your vehicle needs repairs, would that be the “straw that breaks the camel’s back”, so to speak? Would you look at the estimated repair bill, look at the value of your vehicle, and then just say “forget it”? If the answer is yes, then it may be time to drop collision and comprehensive insurance from your plan.

Check the Blue Book value and see how much your vehicle is worth

Use Blue Book or a local vehicle resale website to determine the value of your vehicle. This will help you answer the question above. The internet has made it very easy to determine the value of your vehicle – no matter how old or unique your vehicle may be, it’s unlikely to be the only vehicle in the world in that situation. Check the value of your vehicle, then use that number to determine if it’s really worth the price of your insurance policy.

Classic Cars Are an Exception

There’s one important exception for everything we’ve listed above: insurance companies offer something called classic car insurance. Older, collectible vehicles may qualify for classic car insurance – but only if they’re used as your secondary vehicle. A 1990 Honda Civic is not a classic car, but a 1957 Chevrolet Bel-Air would be a classic car. Don’t immediately remove collision or comprehensive insurance from your vehicle just because it’s 60 years old!

By following the tips above, you can decide whether or not it’s smart to reduce insurance coverage on an older vehicle.

A DUI is a charge for ‘Driving Under the Influence’. This essentially means that you have been caught driving over the legal limit after drinking alcohol. Undoubtedly, this offense can lead to a number of financial and legal consequences.

As well as facing fines and a potential driving ban, you can also expect your auto insurance rates to increase, which will make it more difficult to get coverage when you are able to return to driving. In recent years, many states have been cracking down on drink driving by enacting stricter penalties and a more uniform set of standards. Organizations such as Mothers Against Drunk Driving have been attempting to standardize the legal limit for blood alcohol content at .08% across states.

If you have been charged with a DUI, then you might be wondering how precisely this is likely to impact on your driving insurance and for how long. Read on to learn more.

DUI Policies And Laws

The somewhat positive news for those that have been hit with DUIs, is that it is still possible to get auto insurance. Driving companies do not create ‘DUI specific’ policies, but some will market the fact that they will take on a wider range of customers, including those that have faced legal charges. These driving policies are not marketed as such then but can be considered to effectively be ‘policies for DUIs’.

The bad news, is that such auto insurance is likely to cost a lot more– up to 5 times as much as a regular policy in fact. You will also be required to jump through a few more hoops in terms of the legal side of things, specifically this means you will need to sign an SR-22, which is a ‘proof of financial responsibility’ form. This states that the driver has purchased the necessary amount of liability insurance for their given state. While ever driver needs to have this level of cover, it is only drivers with DUIs that are required to file the SR-22.

Making life a little easier is the fact that many driving insurance companies will file the SR-22 on the behalf of their customers. This is something to look into when you take out your policy.

The Cost of a DUI On Your Auto Insurance

Paying five times more for your auto insurance is no small amount and can make it very difficult for some people to return to driving after a DUI.

What’s also important to consider alongside this is the large number of additional costs that will be incurred due to a DUI. For instance, you can expect to pay anywhere from $150 to $2,000 for bail. Likewise, you will pay a similar amount for towing and impound. You’ll also probably need a DUI lawyer, which can cost up to $2,500 and you’ll probably have to pay for court fines, alcohol treatment and education and more.

When you then consider that your driving insurance costs might go up by $5,000 or more, this becomes highly prohibitive for many drivers.

How Long Will Your “DUI Rates” Last On Your Insurance?

So the big question is how long this is likely to last and the answer is that your DUI will usually drop off of your driving record after 5-7 years. Nevertheless, the infraction will probably stay on your criminal record permanently. After 5-7 years, the DUI should no longer affect your insurance rates but if you find it is, then you may need to look into having the violation expunged or having it listed under your sealed records. Sealed records will only be available to law enforcement officers, thereby ensuring that they won’t impact on your policy.

Why Does Insurance Go Up So Much? And What Can You Do About It

The reason that driving insurance goes up so much, is twofold. The first reason is that drivers with DUIs on their record will be considered riskier for companies to insure. An insurance company’s ideal customer is someone that will take out insurance and thus pay into the policy but that will not need to claim – which costs the company money. If a driver has a DUI on their record however, this suggests they are reckless drivers and means they are statistically more likely to have an accident. The insurance company therefore must charge more simply to protect themselves and to remain profitable.

The other reason that DUI drivers will pay more is simply that fewer companies are willing to give them the insurance they need. This creates a ‘seller’s market’ and means that the companies can charge more while remaining competitive.

Other than waiting the required amount of time for your DUI to stop impacting on your driving insurance, the best things you can do to reduce the cost of driving is to try and reduce the rates in other ways. The most obvious way to do this is to shop around. While you will always pay more following a DUI, the extent to which this is true will depend to a large extent on the nature of the company and their policies. For instance, some insurance companies are designed specifically to appeal to those drivers that struggle to get protection elsewhere – and these might be the best to look for if you want to get cheaper insurance.

When you first get married, chances are the one thing that you have not really thought about is car insurance. In fact, you likely did not even think about how being married can affect your car insurance premiums.

However, after the wedding and the honeymoon one thing that you will want to add to your to do list is a check on how combining car insurance policies may affect your rates. Typically, car insurance is less expensive for married couples, with a few exceptions to this rule.

Typically You Will Save Money By Combining Insurance Policies

Even if you do not change auto insurance policies, chances are just being married is going to lower your rates when your current policy comes up for review. On average, just getting married will lower your premiums from 10 to 12 percent even if every other factor has remained the same. The main reason for this is because insurance companies have found that married couples are less likely to file claims when compared to single drivers with a comparable profiles.

When To Combine Policies With Your Husband Or Wife

In order to get a higher discount on your car insurance premiums it is a good idea to consider combining you and your significant other’s car insurance into a single policy. This will make the most sense if you both have good driving records with no gaps in coverage.

Having more than one vehicle on a car insurance policy can often provide you with a multi-car discount from car insurers. Even if your household only has one vehicle, sharing a policy can still earn you discounts.

In addition, combining your car insurance policy with a renter’s or homeowners insurance policy from the same insurance company can lead to higher discounts overall.

When You Should Not Combine Policies With Your Spouse

While you are now married, there are some cases where it does not make sense to combine your car insurance policies. If one of you has a poor driving record or a poor credit score, keeping your policies separate may cost you less.

Combining a high risk driver with a low risk driver is likely going to increase the low risk driver’s car insurance rates. There is also the chance that an insurance company will not insure a high risk driver no matter how much it costs. If one of you has more than three accidents an insurance company may not add them to a policy.

Another piece of bad news is that even if you decide not to combine your policies, if your partner is a high risk driver it still could negatively impact your premiums simply because most insurance companies consider the driving history of each family member that lives within a household when they underwrite policies. Essentially, you are considered riskier by association.

So, Should You Combine Insurance Polices?

Overall, in the majority of cases if you get married you should consider combining your insurance policies. Even if it does not make sense at the present moment, it is a good idea for the person who has a bad driving record or bad credit to do what they can to mitigate these negative marks. One way to do this is to take a defensive driving course to help unlock a discount or at least provide a way to negotiate for lower rates.

Most minor traffic violations only stay on a driver’s record for a few years. Keeping your record clean for that long can help remove a driver from the high risk pool.

Even if you are not able to combine your policies immediately, it is a good idea to check back often to see if the rates get better over time.

If it does make sense to combine policies, review your information with an agent and make sure to get quotes from several companies in order to find a car insurance policy that is right for you and your spouse. This is the best way to find a single policy that will work for your budget and needs.

Whether you ended up owing a large amount of money to the IRS or simply don’t have the means to pay your IRS bill, having a negative balance on your taxes can be a scary thing.

Car insurance is always more expensive for younger drivers. Younger drivers have less experience. They’re in a higher risk class. With that in mind, let’s take a look at how much car insurance costs when you’re 20 years old.

The Republican tax bill has been what is on everyone’s radar lately, and questions have been asked in many forms: How does the new bill affect me, and when does it start to affect my taxes? Is it set in stone? Will things change before the next tax year?

Depending on the type of insurance policy you have taken out, the company you are working with, and their policy, there is a good chance that your vehicle will be insured against theft. This means that if someone were to steal your car from you, you would be able to get your insurance company to pay out for a new one. They might even be able to pay for a courtesy car in the meantime!

But while your car insurance will have paid for claim and you are already back on the road in a new car, that is not the end of the story. What’s also very important, is that you report the incident to the police.

The police need to hear about any type of claim, regardless of its nature or how things turned out for you. This is not just a matter of getting your car back: it’s a matter of stopping someone who is breaking the law and putting others in danger. By informing the police, you can make them more aware of what’s happening to help put a stop to the crime, prevent others from losing their car, and hopefully help many others to get their vehicles back.

So now you might be wondering what happens if you also get your own vehicle back. If you have filed an insurance claim and received a brand new vehicle, or the money needed to buy one, what will happen when your car then shows up safe and sound thanks to the intervention of the police?

Now you have two cars but an increased premium on your insurance. You probably paid excess but you’ve also put the insurance company out of pocket unnecessarily. So can you ‘undo’ the claim?

What To Do If Your Car Gets Stolen

When your car insurance company settles your claim, it will normally pay you the value of the car. That means you won’t be getting the amount you paid for your vehicle but rather the amount you would get were you to sell it off right now. What’s more, is that this amount will be minus your pre-arranged ‘excess’. Excess being the amount of money that you pay toward the new vehicle before insurance steps in to help.

If you bought a car off of someone for $1,700 then, you might still have to pay $250 excess. And if you find that the car is now only worth $400, that means you’re now only looking at a pay-out of $150!

In other words, the original car is probably still worth more – at least to you – than the amount that you’re getting paid out.

If it were possible to get your car returned then, this would probably be the preference (and you could even go on to sell it for more!). Unfortunately, stolen cars are often times not recovered, so in the short term, the best course of action is to make the claim for the theft.

The good news though is that it can happen and it does. This means that your car insurance policy should make mention of it somewhere, even if it is just a couple of lines. It’s worth reading this then and checking carefully so that you can be certain of precisely what their stance will be should your car turn up again.

What To Expect If Your Car Is Recovered

If your car does turn up again, then it is those few lines that will determine how you should act next.

In most cases, the stance the company will take is that they now own the original property. In other worse, if your car should be found again, it is now down to you to send the car back to the insurance company. You’ll probably need to call and discuss in order to learn how you are required to deliver the car and whether or not you have any other options, such as buying the car back.

Usually, the insurance company will then send round a salvage crew to come and collect your vehicle. By law, it is the responsibility of the insurance company to claim the property – so if you are being asked to pay for it to be transported, then you have the right to refuse.

In some cases, the insurance company may find that the value of the recovered items is not high enough to be worth their while collecting them. In that case, you’ll be able to keep everything. However, it is very important that you still inform the company initially, as otherwise you could find yourself guilty of fraud.

One final complication might be if you have any items inside the car that have importance or sentimental value to you. If you claimed for those items, then technically, they will now be the property of the insurance company too. If you want to try and get them back, then you will need to speak with a representative. In most cases though, you should find they are fairly lenient in these scenarios – they are human too, after all!

Ultimately, it’s a frustrating process either way but all you can do is to follow due process. When your car is stolen, inform the insurance company and the police. If it is returned to you, then make sure to do the same. They should talk you through the rest!

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