Are You Paying Too Much For Car Insurance? This Report Suggests That Almost Everyone Is

Are You Paying Too Much For Car Insurance? This Report Suggests That Almost Everyone Is

Car insurance, for the most part, is a very confusing expense. Quotes for identical coverages can vary by several hundred dollars from provider to provider, which leads us to this question: exactly how are insurance companies determining their premiums? Is there a set of proprietary formulas that providers use to calculate how much they should charge their customers? Consumer Reports decided to find out. In a wide-ranging study analyzing over two billion car insurance price quotes from over 700 companies in all 50 states, Consumer Reports created a sample driver–clean record, great credit, owns a sensible Toyota Camry–to generate some baseline numbers, then varied that driver’s specifications to figure out which factors most affected their insurance cost. If the sample driver then got in one accident, for instance, how much would his premium increase? The results were fascinating. What Consumer Reports discovered is that while a recent car accident would raise premium costs (which is to be expected), the biggest price bump occurred when credit score is factored into the insurance pricing calculus. Yes, you read that right: car insurance companies are using your credit score to figure out just how risky you are to insure. Consumer Reports concluded that the lower or “worse” your credit score, the more likely insurance companies think you are to file a claim. So they price accordingly, adding an average of $1301 to the annual premium of drivers with what they consider poor credit. Based on their data, Consumer Reports figured out that insurance companies are using their own version of a FICO score, “cherry-picking about 30 of almost 130 elements in a credit report” to put together a number that “has more of an impact on your premium price than any other factor.” And since insurance providers are not required by law to […]

How To Save Money On Car Insurance (While Still Getting The Best Coverage)

How To Save Money On Car Insurance (While Still Getting The Best Coverage)

With the magazine Consumer Reports leading the way, a national movement for transparency in car insurance pricing is gaining traction. A recent Consumer Reports investigation found that insurance carriers calculate their rates using a complicated secret formula, which includes factors like credit score, use of store credit cards, and even TV providers. In the US, 47 states use this practice, including Florida. Unfortunately, when shopping for car insurance, the deck is already stacked against you. Despite the deception on the part of insurance companies, there are still ways to save money on car insurance. Here are our suggestions for trimming the cost of this important expense, while still keeping the coverage that will keep you and your family safe. Do: set money aside so you can increase your deductible. When it comes to car insurance, a higher deductible means a lower annual premium. If you raise your deductible to $500 or above, you’ll save. But you also need to have that cash readily available in your bank account if you are involved in an accident. Don’t: cut your coverage to get a better price. It’s tempting to slash your coverage to the minimums to save money, but remember: you can still be held liable for any damages that your insurance doesn’t cover. If another party sues you because of an accident, your personal assets can be used to pay for their medical bills, lost wages, and pain and suffering. By purchasing as much liability insurance as you can afford, you’re protecting yourself against a worst case scenario, which can cripple your finances far more than a car insurance premium. Do: use an insurance broker to shop around. Get quotes from the major companies, but don’t forget your local car insurance broker. They have access to many smaller but still reputable […]

What is Subrogation, and What Could it Mean For Your Case?

What is Subrogation, and What Could it Mean For Your Case?

In 2011, Bryan Stow was badly beaten by a pair of angry L.A. Dodgers fans who resented Stow wearing San Francisco Giants clothing to a Dodgers game. He suffered serious, lasting injuries, including loss of part of his skull and brain damage. He is still in a wheelchair, can’t control his bodily functions and requires continual care. Although a Los Angeles Superior Court jury awarded Stow $18 million from the Dodgers and his assailants last year, because of subrogation laws, he will eventually only receive a portion of that amount. What is Subrogation? It’s important to understand subrogation laws, as they can apply in many personal injury cases. Subrogation, in the context of a personal injury claim, is a health insurer’s right to be reimbursed for benefits paid when an injured person obtains a recovery from an at-fault party. The extent to which a health insurer is entitled to be reimbursed is governed by the plan’s language. Since Stow’s award is greater than the amount his provider Envision Healthcare has paid for Stow’s healthcare as a result of the incident, he will still receive some of the money he was awarded in his court case. However, some of his award will go directly to the Dodger’s insurance company, even before Stow is paid. “Subrogation is the norm in these cases, but what’s so shocking in this particular case is the fact that after likely aggressively defending the matter in court and not offering enough money to achieve a settlement, the Dodgers, in effect, silenced the jury’s award by going behind the back of the Plaintiff and purchasing the plan’s subrogation rights for fifty cents on the dollar. This effectively saved the Dodger’s $1.8M and reduced the jury verdict by that amount,” says Bill Tonelli of Dellecker, Wilson, King, McKenna, Ruffier […]

Uber Incidents Raise Questions About Liability

Uber Incidents Raise Questions About Liability

On December 27th, Pablo Sanchez Jr. of North Miami was killed while taking an Uber ride home from a Miami nightclub. Sanchez and three of his friends were riding in a GMC Yukon when the driver tried to make a left-hand turn onto SW 144th Street. A Toyota Corolla heading south on SW 157th Avenue crashed into the Yukon, which rolled over, landed against a wall and burst into flames. Everyone escaped but Sanchez, who was trapped inside. His family can’t comprehend the loss, nor the accident. Was the Uber driver alert? Intoxicated? Licensed? As the family awaits a next move from the police, who have yet to bring charges, they have filed a civil lawsuit against Uber as well as the Yukon driver, the Yukon owner, and the Corolla driver. Is Uber Liable? William Ruffier of the Orlando law firm Dellecker Wilson King McKenna Ruffier & Sos, who is not involved in the case, says, “Right now, there’s some confusion about Uber drivers and whether they’re agents of Uber or truly independent contractors. While Uber states that its drivers are independent contractors, a jury can look at evidence that could suggest otherwise.” For example, if a so-called independent contractor can lose his contract if he turns down a job (in the case of Uber, a job would be a ride-sharing opportunity), or if the independent contractor can’t set his own rates or control other aspects of his business, it calls into question whether he is truly an independent contractor or an employee. Avoiding Regulation Uber has made headlines before. The innovative transportation company has been derided by traditional taxi companies who in many cities must adhere to stricter regulatory standards, which are costly to follow. Uber has been able to avoid most regulation because it defines itself as a […]

Bad Faith Insurance

Bad Faith Insurance

What Is Bad Faith? In most U.S. jurisdictions, insurance companies operate based on an “implied covenant of good faith and fair dealing.” This covenant automatically exists in insurance contracts between insurance companies and the individuals they insure. The covenant creates an agreement that insurance companies will act ethically, honestly, and in the best interest of their clients. Bad faith can indicate actions of insurers that are intentionally fraudulent, deceptive, or duplicitous. While the term typically applies to first party insurance, bad faith insurance may also apply to third party insurance. This can be seen in cases where a non-insured individual, or “third party,” is injured and attempts to collect reimbursement for the injury from the client’s insurance company. Bad Faith Insurance Examples Examples of bad faith insurance may include the following actions from insurance companies: Diminishing, delaying, or denying payment without reasonable basis Using illegal or fraudulent procedures or methods when dealing with clients Attempting to settle a claim for less than the amount that is reasonably expected Failing to deny or confirm a client’s claim within a reasonable time frame Diminishing a claim requiring a client to begin litigation Altering applications or policies without proper client notice or consent Failure to promptly and properly investigate a claim which leads to failure to pay a covered claim Using inaccurate factual or legal information for diminishing, delaying, or denying a claim payment Failing to notify clients of arbitration appeals policies in an attempt to decrease the settlement value Victimizing clients through demeaning, intrusive, or harassing investigation methods and procedures Determining Bad Faith Insurance It is important to distinguish whether an action or behavior can be defined as bad faith insurance. For example, it is not uncommon for a client and insurance adjuster to disagree on the potential value of an insurance […]

First Party vs. Third Party Insurance

First Party vs. Third Party Insurance

When investigating a potential insurance claim or lawsuit, it is important to be aware of differences between first party and third party insurance. Knowledge of applicable insurance claims helps to expedite the legal process. Generally speaking, first party insurance is purchased by individuals to cover themselves and their personal property. Third party insurance is purchased by individuals to protect themselves from expenses or lawsuits brought by other individuals. In any instance, the “first party” is the insurance purchaser, the “second party” is the insurance company, and the “third party” is another individual or entity. Third Party Insurance Third party insurance is in place to protect policy holders against potential financial or legal claims against them from another individual. This other individual is referred to as the “third party.” These claims and lawsuits typically result from the actions of the insured. Third Party Auto Insurance Auto liability insurance is a common example of third party insurance. In the event that the insured individual causes personal or vehicle damage to a third party, third party insurance can help to cover costs. Third party insurance claims may include expenses for the other individual’s medical bills and property repairs. First Party Insurance First party insurance is purchased to protect individuals and their property. Common examples of first party insurance include renter’s insurance or homeowner’s insurance. First party auto insurance covers injuries or property damage to the purchaser, as opposed to coverage for other individuals provided by third party insurance. First Party Litigation First party litigation may occur when there is a dispute between the insurance company and the policy purchaser. Insurance bad faith is a term used to describe unethical or unfair practices of an insurance company. Insurance companies owe a duty to customers to act in good faith and fair dealing. When insurance […]