How to wreck an auto insurance claim

How to wreck an auto insurance claim - Want to undermine your chances of getting a payout from your car insurance company? These 6 foolish moves can make sure that happens.

When you purchase car insurance, you hope your claims will be paid.

But in many situations, your insurer can deny your claim because of things you've done. Negligence, criminal activity or simple forgetfulness all can cost you.

Here are six things you may do that can result in your insurance company refusing to foot the bill for your claim:

1. Filing a fraudulent claim

Tempted to pretend that old jalopy has been stolen so you can collect the car insurance money? Think it's harmless to exaggerate the extent of your damages in order to collect a few more dollars in your insurance payout?

Think again.

If you file a fraudulent or exaggerated claim and your auto insurance company finds out, your claim is sure to be rejected. Worse, you could be in trouble with the law.

"Committing insurance fraud is a felony," says Amy Bach, executive director of the consumer advocacy group United Policyholders, which concentrates on insurance matters. "Knowingly committing a fraud is always grounds for denial of a claim."


2. Filing a claim for coverage you don't have

Often drivers don't understand their coverage, which can lead them to try to make claims for coverage they don't have.

For example, did you hit a deer? You don't have coverage unless you bought comprehensive insurance.

Or perhaps you hit a slick patch in the road and slammed into a corner mailbox. Any damage to your car will not be covered unless you purchased collision insurance.


3. Expecting coverage for a loss excluded in your policy

You will not be covered for any loss that is excluded in your policy.

For example, in some cases, a car insurance policy may not cover you for business-related use of your vehicle. So a claim for a fender-bender that occurred while making a work delivery could be denied.


4. Increasing a car's value without telling the insurer

When you increase the value of your car, you may not be covered for the full extent of damages if you haven't notified your insurer of the upgrades.

"If you do any heavy customization or special modifications to the wheels or body of your car, it's important to notify your agent immediately," says Rick Ward, director of auto claims for MetLife Auto and Home.

You may be charged a higher premium to reflect the increased value of your vehicle. If you haven't notified your car insurance company of improvements by the time you file a claim for damages, you will likely receive compensation only for your vehicle's original value.


5. Letting your policy lapse

Even if you've faithfully paid your auto insurance premiums for decades, one missed payment could jeopardize your coverage.

In this case, your insurer may suspend your auto insurance coverage until you are up to date on payments. The results could be disastrous if you're involved in an accident before your insurer has reinstated your policy.

"If you have a lapse in your policy, you'll have no coverage and will be forced to pay for the full extent of any damages yourself," says Ward.


6. Driving under the influence

Insurance companies are generally forgiving of stupidity. For instance, if you leave the keys in your car and it is stolen, most car insurance companies will still pay the claim, even though the theft was partially your fault.

Making poor choices like driving drunk or under the influence of drugs could cost you, however. In many states, insurers are allowed to deny a health insurance claim that occurs when you are involved in an accident and are legally intoxicated.

"Wherever you're driving, you need to understand the statutes and state laws that apply, so that you're aware of the consequences of your actions," Ward says. ( msn.com )

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Ten things your insurance won't cover

Ten things your insurance won't cover - You're a good grownup. You have health insurance, life insurance, car insurance, and homeowner's insurance. Life can throw anything your way, and you'll be covered! Well, not anything. Each of the insurance plans that you pay premiums for every month have caveats and asterisks and fine print. Here are ten surprising things that you insurance probably doesn't cover.

Stuff in your car

If your car is broken into, your comprehensive coverage will replace the broken window. What it won't replace is anything that got jacked. The property in your car is covered instead by your homeowner's or renter's insurance, if you have it.

Nuclear disaster

If you live near a nuclear power plant and it has a meltdown and you are forced to abandon your house, your homeowner's insurance will not cover it.

Your shrink

Some health insurance policies have mental health coverage, but many do not. Before you get too comfortable on the therapist's couch, double check to see who will be paying for it.

Earthquake

Earthquake coverage must be purchased in addition to homeowner's insurance. Damage from tsunamis spurred by earthquakes is not covered (awesome).

Home healthcare

Some heath insurance plans will pay for home nursing care, but many won't. Check your policy.

Terrorism

Pre 9/11, many homeowner's insurance policies didn't mention terrorism. Post 9/11, most policies exclude acts of terrorism as a legit reason for filing a claim

Mold

If your house is infested with mold, it can mean health problems for your whole family; it might even mean abandoning your house. But it won't be a problem for your insurance company: your policy won't cover mold.

Floods

Earthquake insurance doesn't cover tsunamis, but flood insurance does. Again, flood coverage is an extra add-on that normal homeowner's insurance doesn't cover.

Sewer or sump pump backup

As a homeowner, few things might be worse than to find your house filled with sewage, except maybe that your homeowner's insurance won't cover it.

Reproductive medicine

Whether you want hormone therapy and in vitro to have a baby or a vasectomy so you can't have one, your health insurance likely won't cover it. ( bundle.com )

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Ten Car Insurance Myths

Ten Car Insurance Myths - Understanding all the legal mumbo-jumbo of an insurance policy is hard enough. So auto policy holders should know what's fact and what's fiction about what insurers look for when determining premium rates. Here are 10 auto insurance myths debunked.

1. The color of my car matters.

Red cars may be a hot ticket item, but they do not drive premium prices up as is widely believed. Car insurers are more interested in the make and model, year, body style, engine size and, in some areas, location (street parking versus driveway/garage-kept vehicles, for instance). What does count, however, is drivers' behavior. Moving violations, like speeding or reckless driving that result in "points", certainly affect the cost of premiums no matter what color the vehicle happens to be. You may care what color your car is, but insurance companies don't.

2. My old car won't be a target for theft.

Wrong. According to a National Insurance Crime Bureau report, car thieves preferred older models because they are easier to steal. In fact, a 2007 bureau report that listed the most stolen vehicles included a 1995 Honda Civic, a 1991 Honda Accord and a 1989 Toyota Camry.

The insurance bureau's report also suggests that thieves' preference varies from state to state. Crooks in Texas grab trucks, while thieves in California prefer Hondas, Toyotas and other imported models.

3. I'm covered if my car is stolen, vandalized or damaged by hail, wind, fire or flood.

Comprehensive and collision coverage are optional when purchasing an insurance policy. So it's not an "automatic" if a tree limb smashes your windshield or vandals spray-paint graffiti on your door. Comprehensive and collision riders are usually required if you're leasing or financing your vehicle; but once the car is yours, you must request this additional coverage.

4. Credit scores don't affect insurance rates.

Most car insurers take a lot of factors into consideration when determining your premium rates. Since your credit score is an indication of how well you manage your financial affairs, many companies look at this number if you want to purchase, renew or change an insurance policy. (Credit is one factor that may affect your rate.)

5. My insurance company can cancel my policy at any time.

Unless you give them an adequate reason to do so, car insurers can't arbitrarily cancel a policy in the middle of a term. Grounds for cancellation may include fraud or non-payment of premiums.

6. My friend borrowed my car, so he's responsible if there's an accident.

Car insurance companies follow the car, not the driver. So you are ultimately responsible for an accident and any damages that occur.

7. Personal property inside my car is covered.

Sorry. If your expensive golf clubs get ruined when your car is rear-ended, you're out of luck. Likewise, if expensive items like a laptop or fur coat are damaged or stolen from your car in the course of an incident, you may file a claim through your homeowner's (or tenant's) policy but not through your car insurance.

8. I'm automatically covered for a rental car.

If your car is stolen or damaged, rental car reimbursement is not automatically included in your policy. But it is one of those very affordable additions. According to the Insurance Information Institute, rental reimbursement coverage is available for $1 to $2 a month with most insurers.

But take heed: Even with this additional coverage, there may be limits on how many days you can rent a car, or how much is allowed per day toward rental costs (including a maximum cap).

Speaking of rentals, don't assume your coverage will be sufficient if you're using a credit card for the transaction. Each credit company has its own policy inclusions and exclusions. So check the fine print first, or you may get stuck with a hefty bill.

9. Drivers of sports cars pay more insurance because of more tickets.

This may be true if you're also a high-risk driver (younger than 25) or have a checkered driving history with multiple moving violations. But according to a study published in 2009 by Quality Planning, drivers of the Hummer H2/H3 led the pack with the most violations and, more than likely, higher premium rates. Others on the list included drivers of the Scion xB multipurpose wagon and the Subaru Outback station wagon — definitely not hot sports cars.

10. Having no-fault insurance means it's not my fault.

No-fault insurance varies from state to state. But in a nutshell, it means you and the other party will be covered for immediate expenses, such as medical attention or lost wages, while the insurance companies arm-wrestle about who will pay for the accident itself.

But you may still be liable for repairs and other damages if the insurance companies ultimately determine the accident was your fault.

The Bottom Line

It may take a little reading of the fine print and asking questions of your agent, but you can save yourself a lot of headaches and pain in your wallet if you understand fact from fiction about your auto insurance policy. ( investopedia.com )

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EU judges drive up car insurance and pension costs for men with equality ruling

EU judges drive up car insurance and pension costs for men with equality ruling - European Union judges were accused of ‘utter madness’ yesterday in the wake of a ruling which will cost young women drivers thousands of pounds each.

The decision is also set to deal a blow to male pensioners.

The European Court of Justice tore up the rule book for insurance companies by banning risk assessment based on a person’s sex.

Scroll down for video report

No more cheaper deals: An advert for Sheilas' Wheels, which is principally aimed at women, won't be able to offer cheaper car insurance to female customers after the ruling

The ‘gender equality’ ruling means young men cannot be charged more for their car insurance – even though they are ten times more likely to have a serious crash.

Experts predict women drivers aged under 26 now face a 25 per cent rise in car insurance rates – while premiums for ‘boy racers’ will be cut by 10 per cent.

At the same time, the income a man receives for life from his pension will be cut by as much as 8 per cent, or hundreds of pounds each year.

The EU court decided it is not fair for men to receive more than women each month – even though they are statistically likely to die younger.

The changes will be forced through by Christmas 2012, without the British Parliament having the chance to fight the ruling.

Experts say the overall cost to UK customers of the judgment – based on a case brought by a consumer group in Belgium – will be almost £1billion.

The judges pointed out that the Lisbon Treaty – on which the British public was denied a referendum by the Labour government – includes the Charter of Fundamental Rights.

This aims ‘in all its activities, to eliminate inequalities and promote equality between men and women’.

Conservative MEP Sajjad Karim said: ‘This ruling is utter madness. It is a setback for common sense.

‘It is a statistical reality that young men have more accidents than women so it should be reflected in their premiums.

‘Boy racers will now have even more money to buy unsafe fast cars, whilst safer drivers will be hit hard in their insurance premiums.’

Until now, discrimination in setting insurance rates has been explicitly permitted under EU equal treatment rules.

It allowed the market to fix the price of a financial product based on the statistical likelihood of a person having an accident, falling ill or dying.

All insurance products will be affected by the new ruling.

The Association of British Insurers predicted that, for annuities, men approaching retirement could face an 8 per cent cut in rates, while those for women approaching retirement would rise by 6 per cent.

A 65-year-old man with a £100,000 pension pot would be more than £8,500 worse off by the time he is 90.

Women currently receive less per year, based on the assumption they will live for longer.

For life insurance, men could see a 10 per cent fall in costs, while women’s rates could rise by as much as 20 per cent.

Anger: Conservative MEP Sajjid Karim, with David Cameron in 2007, condemned the ruling as 'utter madness' and a 'setback for common sense'

Open Europe said UK insurance providers would now have to raise an estimated extra £936million to cover themselves against ‘new uncertainties’ in the market when the equality rule changes.

It predicts young women drivers will pay, on average, an extra £4,300 between the ages of 17 and 26.

In a ‘worst-case scenario’, women drivers’ cumulative insurance costs could be as much as £9,300, the think-tank predicts.

Risks: Young men are ten times more likely to be involved in a serious crash

Stephen Booth, of Open Europe, said: ‘This ruling has pushed anti-discrimination legislation beyond the realms of all common sense. Unaccountable EU judges have ruled to overturn long-held national rules and increased costs for consumers in the process.

‘To do so in the name of equality just adds insult to injury.’

Dr Ros Altmann, director general of Saga, said: ‘The European Court has dealt a further future blow to Britain’s already struggling pensioners.

‘In defiance of common sense and logic, insurers will be barred from pricing their products on the basis of risk.’ She added: ‘Our state pension is already about the lowest in Europe so the impact here is very worrying.’

Adrian Webb, of Sheilas’ Wheels, which targets female customers, said: ‘We have always insured men but we will continue to market to women and to celebrate our pink brand because the ruling does not prevent female-focused marketing.’

James Slack's analysis

Yesterday's verdict was yet another expensive reminder of how Britain – and even the financial markets – are no longer in control of their own affairs.

The saga began hundreds of miles away in Belgium.

A little-known consumer group, Test-Achats, challenged – in the Belgian courts – the idea that insurers could use a person’s sex when assessing risk.

Belgium’s Constitutional Court decided to send the case to the EU’s lawyers for a decision.

Last September, Juliane Kokott, an advocate-general at the European Court of Justice in Luxembourg, decided there had been a breach of ‘gender equality’ rules. Now the court itself has agreed.

At no stage did the case come anywhere close to the British legal or Parliamentary system – yet every single one of us must now suffer the consequences.

In many respects, we have become depressingly acclimatised to unelected, unaccountable European judges meddling in our affairs.

The European Court of Human Rights, in Strasbourg, routinely forces us to live side-by-side with terrorists who it stops Britain from deporting.

Soon, if the court has its way, we will be sharing the ballot box with convicts.

But what is so alarming about the insurance case is that judges are not consigning themselves to legal matters. They are meddling with the markets.

Fixing the rate of a commercial product should be entirely decided by the market, based on the risk posed by each customer, and the cost of providing it. There is hard statistical evidence that young men are more likely to have a serious accident.

Therefore, their premium will be more expensive. It should have nothing to do with judges in Luxembourg.

Where will it stop? If it is deemed illegal to link insurance to gender, how long before the same rules are extended to age?

Last night, Test-Achats declared the insurance ruling a ‘victory for consumers, the men and women’ of the EU.

Rather, it was a defeat for democracy and Britain’s ability to govern its own affairs. ( dailymail.co.uk )

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