Many of us know the feeling of getting our car insurance bill and thinking, "Again!? Didn't I just pay this!?" Car insurance is one of those unavoidable (in most states) expenses. AOL Autos wanted to find out from an insider exactly what goes into those prices and what we can do to keep our car insurance costs down. We talked to Patrick Lawson, a 25-year veteran auto insurance agent.
The Bottom Line: Premiums
Have you ever wondered how they come up with these numbers? Lawson mentioned the common factors like age, sex , car type and driving record but also noted a new, little known factor. "Companies are now, of all things, checking credit because people with poor credit, statistically, can be susceptible to more claims," he said. He explained that some people in these cases are more apt to file a claim instead of settling it themselves because they might not have the means to handle it any other way.
"Insurance is nothing but numbers, and that's all the industry has to go on is how they make these number come out. And the numbers suggest that people with less-than-perfect credit, sometimes, have a higher probability of claims," says Lawson.
Regardless of good credit or bad credit, he always recommends that people shop around for car insurance, "Even if you have pristine credit, some companies put more of a value on credit than others," he said. "You can't make a blanket statement, but what you can say is it pays for everybody to shop around a little bit because it's well worth it."
He said that some car insurance companies have bad experiences with drivers and some have more positive experiences so, "You as a consumer, have the job to find the ones that are having the good experiences."
Once you find a car insurance company that provides the services you're looking for, keep in mind that the prices themselves are fixed by the insurance company, so haggling with your agent is out of the question. "Whatever the price is, it is," he said.
Some Things to Avoid
Many of us have let someone else borrow our car for a short time. Maybe we're hurt and can't drive, a friend needs a car for the day, or we simply just don't feel like driving. Lawson told AOL Autos that lending your car to the wrong person can be a big mistake.
"You should always be careful who you let drive your vehicle. You just don't arbitrarily say, 'Hey take the keys and go' because you don't know what that person is doing, you don't know their driving record, you may not even know if they have a license," says Lawson.
He explained that if you lend your car to an unauthorized person and they get into an accident , your car insurance company might do everything it can to get out of settling the claim. This is especially important for parents who have their kids named on their policy as drivers. Sometimes their kids let their friends drive the vehicle as well. "As a rule of thumb, only the names of insured persons should ever give permission and only in extenuating circumstances, don't use it as carte blanche," Lawson said.
Speaking of things to avoid, we asked him if buying a red sports car was out of the question. "Here's a real misnomer about auto insurance, people say if you get a red sports car, that's like the kiss of death. Color has absolutely nothing to do with whether you get a speeding ticket or you don't," he said. If two cars are going 85 mph in a 65 mph zone, the police are not more likely to pull one over and issue a ticket because that car is red, Lawson said. When Lawson was studying to become a car insurance agent, he said the instructors made it a point to tell students that the red car theory is a falsehood.
The real problem with speeding tickets has to do with the drivers themselves, not the color of the car. "Some insurance companies are only equipped to deal with you if you get two tickets in a three year period. If you pick up three, you've gotten out of their underwriting mode where they're not going to renew you," he said. If your tickets (or accidents) build up, some companies will drop you because you're a risk.
In some cases, drivers just don't have any control over what happens when they get into their vehicles. Hitting a deer one too many times or being rear-ended on more than one occasion, can also affect your car insurance rate. "You hate to say it but that's almost the case," Lawson said. "Being at the wrong place at the wrong time can come back to bite you." Lawson acknowledged that it may not be fair that insurance companies handle certain people this way. Even if there's no real reason why some people get into more accidents than others, the fact is their claims cause companies to lose money.
Another thing to avoid is lying to your auto insurance agent. If you think he doesn't know about your tickets and accidents, think again. He's had a few people tell him their driving record, minus a few small details. He'll look up their record on the computer and, "They'll watch it print," he said, "and I've had a couple people just get up and gather their belongings and just walk out because they know they're dead in the water."
The Serious Side of Auto Insurance
With 25 years under his belt, Lawson has seen a lot. He talked about a family who came into his office wanting to purchase motorcycle insurance for a first-time bike owner, their 16-year-old son. They showed him a picture of the bike they were purchasing, a bike he described as, "A crotch rocket that does 0-60 as fast as you can sneeze."
He told the mother that it was a mistake, but she emphasized how safe her son was going to be. He told her, "Ma'am, I don't want to be inappropriate or hurt anyone's feelings, but this is a death claim waiting to happen. When you take a fast motorcycle on an inexperienced operator, you're begging for problems."
The first weekend the kid was on the bike, he lost control on a rural road, became airborne and totaled the bike. He spent some time in the hospital and later recovered. The mom called Lawson after the accident. "They called me up and the lady was crying and said, 'Why in the world did we not listen to you?' What do you say to something like that," Lawson asked, "You can't say anything except, 'I'm sorry it happened,' and ask 'how is he?'"
Motorcycles aren't the only dangerous thing on the roads though. Drivers who talk on their cell phones and send text messages cause accidents as well. Lawson knows firsthand the dangers of these distractions. A close friend of his was permanently disabled when a woman dropped her cell phone on the passenger floor and swerved into his lane when she tried to pick it up. The woman didn't have adequate insurance and his friend ended up being bankrupt by the medical bills.
"I think all the states should raise the minimum liability limits and require that all states make auto insurance mandatory," he said.
Chances are, most of us live in a state where car insurance is mandatory. By keeping your credit score in check (or working to improve it), shopping around for a car insurance company that fits your needs and avoiding mishaps like speeding tickets and accidents, you'll be able to keep the cost of your car insurance down. Also make sure to know what your current car insurance policy covers. You may have coverage that you don't need like windshield replacement or tow truck coverage. Adjust your coverage to get the car insurance that you need, with the price that matches your budget.
Small-business owners offer health benefits for a variety of reasons: they're genuinely concerned about their employees being taken care of, it's mandated in their state or they want to be more competitive to attract top talent (a large majority of employees consider a health plan to be the most important benefit they can be offered, according to a survey by the National Business of Group on Health).
A robust health benefits package can attract, retain and motivate talented people to work for you and help your company grow. According to the 2009 Mercer National Survey of Employer-Sponsored Health Plans, health benefits make up about 14 percent of the payroll for small businesses that currently offer health benefits; a skyrocketing expense making it more difficult to keep offering those benefits. A recent Kaiser Family Foundation study states that 59 percent of small companies are offering health care coverage, down from 65 percent 10 years ago.
If you do offer health benefits, it's a safe guess that you only tend to think about these plans once a year, when open enrollment season comes around. However, it's important to make the most of your investment. By making health benefits a year-round conversation, you can create a win-win situation for yourself and your employees. There are two key components to this win-win scenario: communication and utilization. Targeting both will provide you a better return on the money you invest in benefits, give your employees a better understanding of their plans, and should ultimately help to lower premiums.
Communication Drives Better Utilization
It's been said that a person needs to hear new information at least three times before it registers in their mind for immediate recollection. So you know employees aren't tapping into all the available options when faced with a health care need. It's important to repeatedly communicate all the additional tools and resources available to employees, all those plan supplements that they've probably forgotten or never knew about.
Better utilization of the components of a given plan will keep members engaged and promote proactive behavior. By the time open enrollment approaches, you can strategically tailor your plans to not only meet the needs of your company but also the needs of your individual employees, who are now smarter consumers of their health care plans.
An Ounce of Prevention is Worth a Pound of Cure
According to the Kaiser study found that only 14 percent of small businesses offering health benefits to employees also offer health risk assessment. That number needn't be so low, as many carriers offer online programs to help identify risk factors for common chronic diseases (e.g.: diabetes, congestive heart failure, asthma, obesity, cancer) and offer prevention programs. Why is this important?Because it's cheaper to prevent illness than treat it, that's why.
Some companies offer incentive programs to encourage employee participation in health and wellness programs because learning about potential risks and screenings for early detection helps decrease large claims. There are even regulatory proposals that could incentivize businesses to push proactive care. So, work with your carrier to learn about the tools and preventative resources available and then share this with your employees.
How Do You Make the Info Stick?
Bombarding employees with too much information at once can be overwhelming, so consider spreading the conversations throughout the year. Try to tie reminders to specific months or causes. For example, heart health is typically addressed in February and March is "Save Your Vision" month, a timely opportunity to refresh your employees on their vision plan (especially those who stare at computer screens all day). Flu season starts to peak in November, so a friendly reminder on the benefits of getting a flu shot would be timely (and you should mention the benefits to the company as a whole, as well as to the individual).
Other topics such as promoting use of a plan's nurse-line, using the mail-order program for maintenance medications, info about the costs of generic versus brand-name prescriptions or what hospitals and urgent care centers are in-network, are evergreen. Knowing these details before a crisis hits helps you capitalize on network discounts.
Consider how you're going to deliver the information; due to sensitivities it's important to select a medium that allows you to communicate with employees how they're most comfortable. Traditional options include inviting carrier representatives to join a staff meeting, including articles in the employee newsletter or creating an e-mail campaign. Non-traditional options, such as leveraging social media or text messaging may also be accepted by today's ever-growing digital population.
Too often, employees are disconnected from their health care plans--including proactive decisions they should exercise greater control over. Continuous conversations with employees will prompt them to make smart decisions moving forward, and help your company save money.
The Bottom Line: Premiums
Have you ever wondered how they come up with these numbers? Lawson mentioned the common factors like age, sex , car type and driving record but also noted a new, little known factor. "Companies are now, of all things, checking credit because people with poor credit, statistically, can be susceptible to more claims," he said. He explained that some people in these cases are more apt to file a claim instead of settling it themselves because they might not have the means to handle it any other way.
"Insurance is nothing but numbers, and that's all the industry has to go on is how they make these number come out. And the numbers suggest that people with less-than-perfect credit, sometimes, have a higher probability of claims," says Lawson.
Regardless of good credit or bad credit, he always recommends that people shop around for car insurance, "Even if you have pristine credit, some companies put more of a value on credit than others," he said. "You can't make a blanket statement, but what you can say is it pays for everybody to shop around a little bit because it's well worth it."
He said that some car insurance companies have bad experiences with drivers and some have more positive experiences so, "You as a consumer, have the job to find the ones that are having the good experiences."
Once you find a car insurance company that provides the services you're looking for, keep in mind that the prices themselves are fixed by the insurance company, so haggling with your agent is out of the question. "Whatever the price is, it is," he said.
Some Things to Avoid
Many of us have let someone else borrow our car for a short time. Maybe we're hurt and can't drive, a friend needs a car for the day, or we simply just don't feel like driving. Lawson told AOL Autos that lending your car to the wrong person can be a big mistake.
"You should always be careful who you let drive your vehicle. You just don't arbitrarily say, 'Hey take the keys and go' because you don't know what that person is doing, you don't know their driving record, you may not even know if they have a license," says Lawson.
He explained that if you lend your car to an unauthorized person and they get into an accident , your car insurance company might do everything it can to get out of settling the claim. This is especially important for parents who have their kids named on their policy as drivers. Sometimes their kids let their friends drive the vehicle as well. "As a rule of thumb, only the names of insured persons should ever give permission and only in extenuating circumstances, don't use it as carte blanche," Lawson said.
Speaking of things to avoid, we asked him if buying a red sports car was out of the question. "Here's a real misnomer about auto insurance, people say if you get a red sports car, that's like the kiss of death. Color has absolutely nothing to do with whether you get a speeding ticket or you don't," he said. If two cars are going 85 mph in a 65 mph zone, the police are not more likely to pull one over and issue a ticket because that car is red, Lawson said. When Lawson was studying to become a car insurance agent, he said the instructors made it a point to tell students that the red car theory is a falsehood.
The real problem with speeding tickets has to do with the drivers themselves, not the color of the car. "Some insurance companies are only equipped to deal with you if you get two tickets in a three year period. If you pick up three, you've gotten out of their underwriting mode where they're not going to renew you," he said. If your tickets (or accidents) build up, some companies will drop you because you're a risk.
In some cases, drivers just don't have any control over what happens when they get into their vehicles. Hitting a deer one too many times or being rear-ended on more than one occasion, can also affect your car insurance rate. "You hate to say it but that's almost the case," Lawson said. "Being at the wrong place at the wrong time can come back to bite you." Lawson acknowledged that it may not be fair that insurance companies handle certain people this way. Even if there's no real reason why some people get into more accidents than others, the fact is their claims cause companies to lose money.
Another thing to avoid is lying to your auto insurance agent. If you think he doesn't know about your tickets and accidents, think again. He's had a few people tell him their driving record, minus a few small details. He'll look up their record on the computer and, "They'll watch it print," he said, "and I've had a couple people just get up and gather their belongings and just walk out because they know they're dead in the water."
The Serious Side of Auto Insurance
With 25 years under his belt, Lawson has seen a lot. He talked about a family who came into his office wanting to purchase motorcycle insurance for a first-time bike owner, their 16-year-old son. They showed him a picture of the bike they were purchasing, a bike he described as, "A crotch rocket that does 0-60 as fast as you can sneeze."
He told the mother that it was a mistake, but she emphasized how safe her son was going to be. He told her, "Ma'am, I don't want to be inappropriate or hurt anyone's feelings, but this is a death claim waiting to happen. When you take a fast motorcycle on an inexperienced operator, you're begging for problems."
The first weekend the kid was on the bike, he lost control on a rural road, became airborne and totaled the bike. He spent some time in the hospital and later recovered. The mom called Lawson after the accident. "They called me up and the lady was crying and said, 'Why in the world did we not listen to you?' What do you say to something like that," Lawson asked, "You can't say anything except, 'I'm sorry it happened,' and ask 'how is he?'"
Motorcycles aren't the only dangerous thing on the roads though. Drivers who talk on their cell phones and send text messages cause accidents as well. Lawson knows firsthand the dangers of these distractions. A close friend of his was permanently disabled when a woman dropped her cell phone on the passenger floor and swerved into his lane when she tried to pick it up. The woman didn't have adequate insurance and his friend ended up being bankrupt by the medical bills.
"I think all the states should raise the minimum liability limits and require that all states make auto insurance mandatory," he said.
Chances are, most of us live in a state where car insurance is mandatory. By keeping your credit score in check (or working to improve it), shopping around for a car insurance company that fits your needs and avoiding mishaps like speeding tickets and accidents, you'll be able to keep the cost of your car insurance down. Also make sure to know what your current car insurance policy covers. You may have coverage that you don't need like windshield replacement or tow truck coverage. Adjust your coverage to get the car insurance that you need, with the price that matches your budget.
Small-business owners offer health benefits for a variety of reasons: they're genuinely concerned about their employees being taken care of, it's mandated in their state or they want to be more competitive to attract top talent (a large majority of employees consider a health plan to be the most important benefit they can be offered, according to a survey by the National Business of Group on Health).
A robust health benefits package can attract, retain and motivate talented people to work for you and help your company grow. According to the 2009 Mercer National Survey of Employer-Sponsored Health Plans, health benefits make up about 14 percent of the payroll for small businesses that currently offer health benefits; a skyrocketing expense making it more difficult to keep offering those benefits. A recent Kaiser Family Foundation study states that 59 percent of small companies are offering health care coverage, down from 65 percent 10 years ago.
If you do offer health benefits, it's a safe guess that you only tend to think about these plans once a year, when open enrollment season comes around. However, it's important to make the most of your investment. By making health benefits a year-round conversation, you can create a win-win situation for yourself and your employees. There are two key components to this win-win scenario: communication and utilization. Targeting both will provide you a better return on the money you invest in benefits, give your employees a better understanding of their plans, and should ultimately help to lower premiums.
Communication Drives Better Utilization
It's been said that a person needs to hear new information at least three times before it registers in their mind for immediate recollection. So you know employees aren't tapping into all the available options when faced with a health care need. It's important to repeatedly communicate all the additional tools and resources available to employees, all those plan supplements that they've probably forgotten or never knew about.
Better utilization of the components of a given plan will keep members engaged and promote proactive behavior. By the time open enrollment approaches, you can strategically tailor your plans to not only meet the needs of your company but also the needs of your individual employees, who are now smarter consumers of their health care plans.
An Ounce of Prevention is Worth a Pound of Cure
According to the Kaiser study found that only 14 percent of small businesses offering health benefits to employees also offer health risk assessment. That number needn't be so low, as many carriers offer online programs to help identify risk factors for common chronic diseases (e.g.: diabetes, congestive heart failure, asthma, obesity, cancer) and offer prevention programs. Why is this important?Because it's cheaper to prevent illness than treat it, that's why.
Some companies offer incentive programs to encourage employee participation in health and wellness programs because learning about potential risks and screenings for early detection helps decrease large claims. There are even regulatory proposals that could incentivize businesses to push proactive care. So, work with your carrier to learn about the tools and preventative resources available and then share this with your employees.
How Do You Make the Info Stick?
Bombarding employees with too much information at once can be overwhelming, so consider spreading the conversations throughout the year. Try to tie reminders to specific months or causes. For example, heart health is typically addressed in February and March is "Save Your Vision" month, a timely opportunity to refresh your employees on their vision plan (especially those who stare at computer screens all day). Flu season starts to peak in November, so a friendly reminder on the benefits of getting a flu shot would be timely (and you should mention the benefits to the company as a whole, as well as to the individual).
Other topics such as promoting use of a plan's nurse-line, using the mail-order program for maintenance medications, info about the costs of generic versus brand-name prescriptions or what hospitals and urgent care centers are in-network, are evergreen. Knowing these details before a crisis hits helps you capitalize on network discounts.
Consider how you're going to deliver the information; due to sensitivities it's important to select a medium that allows you to communicate with employees how they're most comfortable. Traditional options include inviting carrier representatives to join a staff meeting, including articles in the employee newsletter or creating an e-mail campaign. Non-traditional options, such as leveraging social media or text messaging may also be accepted by today's ever-growing digital population.
Too often, employees are disconnected from their health care plans--including proactive decisions they should exercise greater control over. Continuous conversations with employees will prompt them to make smart decisions moving forward, and help your company save money.
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