AZ Auto Insurance
An informational guide on AZAIP
assigned risk and AZ preferred
risk auto 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 Manhattan, New
York, pays a higher rate than
the owner of an identical
vehicle in Black Mountain, North
Carolina.
Other 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?
Vehicles are also grouped into
categories 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 auto. 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 you consumers should
research insurance coverage
before you buy your 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 auto
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 are touted,
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
auto 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
You can also lower your
insurance rates by requesting
higher deductibles, which is the
amount of money you pay out of
pocket before you make a claim.
Increasing your deductibles on
collision and comprehensive
coverage from $100 to $250, or
even $500, will bring your rates
down. Moreover, you may not need
collision and comprehensive
coverage if you drive an older
car. Ask your agent which
discounts are available to you.
How does adding drivers to my
policy affect my rates?
The more people you allow to
drive your vehicle on a regular
basis, the greater the chances
of your vehicle being in an
accident. Teenagers are
especially expensive to insure
because they are the least
experienced drivers.
A driver's-ed course can help
ease the burden of insurance
costs since it teaches your
teenager defensive driving
techniques. If your child's high
school does not offer driver's-ed,
try to find one offered by
another school or a private firm
in the area. After all, the cost
of driver's-ed could be cheaper
than the extra cost of your
insurance. Many insurers offer
"good student" discounts as
well.
An adult's driving experience
can also affect your rates
significantly. Don't assume that
every adult you know has been
driving since age 16 or 17 or is
a competent driver with a clean
driving or insurance record.
Again, taking a defensive
driving course is a good way for
adults to prove they are also
responsible drivers, thus
lowering their risk and their
insurance premium rates.
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