Top 10 Insurance Myths

The color of my car determines my auto insurance rate. My credit score has no bearing on my insurance premium. I have auto insurance coverage so my new car is already covered… right? Maybe not! Below is a list of fallacies many car owners believe and drive by each day. The truth just might make you change course.

Myth #10: "No-fault insurance means it's not my fault!"False. Basically, no-fault insurance means that your insurance company pays for your damages regardless of who's at fault.

Myth #9: "The color of my car affects my insurance rate."False. The color of your car does not impact your car insurance rates. What does influence your rate is your vehicle's year, make, model, body type, and engine size, along with your credit history and driving record.

Myth #8: "If I lend my car to a friend and that friend is in an accident, his or her insurance company will pay for the damages."False. Your car, your responsibility! However, your friend's insurance could act as excess insurance if the damages exceed your policy's limits. And guess what, even though you weren't present at the time of the accident, it will go on your insurance record and your insurance premium could go up.

Myth #7: "My insurance rate is set by the government."False. The government does not set your car insurance rate. Your state's insurance department only regulates the rates car insurance companies are allowed to set. Where you live, your credit score, marital status and your driving record is what actually affects your premium.

Myth #6: "I recently paid my insurance premium, so the new car I just purchased is covered."True, up to a point. Most insurance policies require that the policyholder notify the car insurance company or agent within a specified number of days after purchase.

Myth #5: "It's a fact. Males under the age of 25 pay more for auto insurance."True and false. Males under 25 years old usually pay more for car insurance than female drivers under 25. However, across the board, teenagers and seniors pay more for auto insurance, in large part because these age groups are typically involved in more automobile accidents.

Myth #4: "My credit score has no effect on my insurance rate."False. Your credit score really does matter! Many Insurance companies take your credit score into consideration when you want to purchase, change, or renew your auto insurance coverage.

Myth #3: "Even without comprehensive coverage, I'm still covered for theft, windstorms, hail and deer accidents."False. Many drivers believe that if they only purchase collision insurance—which covers damage to your car resulting from driving accidents—that they will also be covered for incidents that involve vandalism, hail, animal accidents and fires. That simply is not true. You need to purchase both collision and comprehensive coverage in order to fully protect your vehicle from all of these situations.

Myth #2: "My personal auto insurance covers both my personal and business use of my car."Be careful. It might be able to cover it, but you need to check with your car insurance company. If you occasionally use your personal car for business purposes such as transporting clients, going to and from meetings or hauling business equipment, then you will more than likely need to extend your personal car insurance to cover your business use. Plus, if your employees use their car while working for you, you will want to also obtain a separate non-owned car insurance policy.

Myth #1: "I've never had or been involved in a car accident, so I don't need automobile insurance."False. Some drivers are lucky enough to avoid accidents. However, car insurance is the best protection you can have in the event of an auto accident. You are also legally required to have some form of auto insurance, and failing to do so can carry strict penalties.

Five Best Selling Cars Of 2009

It's no secret that 2009 has been a tough year for the auto industry. Through June, sales are down 35.1 percent from last year, the market is on track to sell fewer than 10 million cars and light trucks, according to auto-industry trade magazine Automotive News. That's about 3.2 million fewer vehicles than last year, which was down 2.9 million vehicles from the last year before that. Despite the tough market, top 10 best-selling vehicles are virtually unchanged from 2008, a testament to the appeal of these cars, trucks and sports utes. Like the rest of the market, sales for the top 10 vehicles are down, as you will see in the following slides. But they are still moving, which bodes well for their future salability when the market rebounds. Let's take a look at 2009's best-sellers so far and why they continue to resonate with buyers.

1. Ford F-series
Total sales for 2009 so far:179,632
Percentage loss from last year:36.6

The perennial king of the hill is still on top. The F-series has been American's best selling pickup truck for 32 years, and it's not giving up the title despite tough competition from Chevrolet, Toyota and much improved Dodge Ram. We like the the F-150's balance of capability and comfort. It far outmuscles the competition when it comes to pulling power and payload capacity, yet still offers one of the smoother and more refined rides on the market. While full-size trucks may no longer be the choice for everyday transportation, their utility and hauling capacity will always make them popular with contractors, small business and families who need to tow, haul and go off-road.

2. Toyota Camry
Total sales for 2009 so far:150,242
Percentage loss from last year:37.4

Pickup trucks and midsize cars traditionally top the best-sellers list. The Toyota Camry has been the best-selling midsize car for seven years, and it still holds that distinction in the first six months of 2009. Toyota Group Vice President and General Manager Bob Carter cites the company's core values of quality, dependability and reliability (QDR) as the reason. "When consumers look at the Camry and evaluate styling, packaging, QDR and value, we've hit the mark,"Carter say. We like the Camry for its luxurious ride, capable engines, efficient use of space and, yes, quality, dependability and reliability. High resale value is another reason to buy.

3. Chevrolet Silverado
Total sales for 2009 so far:149,949
Percentage loss from last year:35.2

The Ford versus Chevy battle for supremacy in the full-size pickup market has been going for decades, with Ford usually coming out on top. However, if you add in sales of GMC Sierra, which is essentially the same product as the Silverado, General Motors bests Ford in terms of how many trucks it's moving off dealer lots. The Silverado is appealing as a powerful, capable and comfortable pickup. Recent product updates by Ford and Dodge have garnered more headlines and added unique features that the Silverado lacks, such as Dodge's Ram Box and Ford's best steps. But Chevy trucks are still a big part of the American culture and probably one of the most well-rounded trucks on the market.

4. Honda Accord
Total sales for 2009 so far:131,043
Percentage loss from last year:35.9
In the 1980 and '90s, Honda Accord and Toyota Camry redefined the midsize car in America. Quality and reliability were emphasized, efficient 4-cylinder engines emerged, four doors became the norm and back seats grew to be more spacious and useful. The resulting sales success meant the domestic automakers had to follow or get out of the way, and many buyers think the domestics are still playing catch-up. The current Accord boasts the same advantages as the Camry, though with a little less luxury and a bit more sportiness. Rock-solid reliability and outstanding resale value have made the Accord a sure bet for years.

5. Toyota Corolla/Matrix
Total sales for 2009 so far:121,463
Percentage loss this year:37.5
Toyota's Bob Carter says the Corolla sedan has the same base values-quality, dependability and reliability-as the Camry but in a smaller package. It doesn't offer the same silky ride or overall refinement as it's bigger sibling, but the Corolla is sure to hold its resale value and do an admirable job of getting frugal buyers where they need to go. The Matrix, which shares it's platform and power trains with Corolla, comes in a more useful hatchback package. Both cars are safe bets for shoppers who like to spend their money wisely.

Auto Insurance Quotes

Automobile insurance quotes online offer choices to the potential policyholder to make an informed decision about the best rates and coverage available. Costs may vary from company to company and the differences might be substantial. When obtaining an automobile insurance quote, be as accurate as possible in providing information to the company. A good quote will include applicable discounts available to the potential policyholder. Having a good driving record, good credit history, low mileage, location of vehicle, safety features on a vehicle as well as other considerations might cause discounts on rates. There are some factors, however, that might send the rates higher. Tickets, accidents, low credit score, high mileage or gaps in coverage could mean high-risk to the insurer and make for higher rates on premiums.

Acquiring sufficient coverage is important when applying for an online quote. Oftentimes when a vehicle is totaled the difference between payoff on the loan and the value paid by the insurer is less. Gap insurance will pay the difference between the payoff and what the insurance pays, if there is one. By requesting coverage quotes the policyholder can find out how to secure this coverage to protect their investment. Unless a sufficient down payment is made at the time of purchase there is usually a significant difference between loan amount and the fair market value of the vehicle. Before purchasing a policy, request automobile insurance quotes online in order to understand policies, terms and coverage limitations. Ask questions and give as much information to the insurer as possible when seeking an automobile insurance quote.

Good driving practices and financial habits can help a consumer receive lower rates on a quote. "So that thou incline thine ear unto wisdom, and apply thine heart to understanding." (Proverbs 2:2) Drivers should keep their eyes on the road while driving. It is not a good idea to talk on a cell phone or eat while driving. Drive safely by driving within posted speed limits. Stop at all red lights to prevent accidents. Pay bills on time to maintain good credit scores. Automobile insurance quotes will be higher if there are gaps in coverage. Driving less as well as not using the vehicle for business purposes will keep rates down when applying for insurance quotes. Lowering deductibles will save money on an automobile insurance quote. Having more than one vehicle on a policy usually qualifies for multi-car discounts. Launching a search on the Internet allows the potential policyholder to find the best deals on automobile insurance coverage.

Auto Insurance

1. Can You Really Save Money On Gas?

"You might be able to save money on gas by combining multiple trips, or walking and biking more often. Reducing your annual mileage to below 10,000 miles could also reduce your car insurance rate by letting you qualify for a low-mileage discount (if available)."

Remember in April and May of 2008, when gas prices started to soar, and no one knew where (or if) they would stop? Well, they peaked at over $4 a gallon in July, and then started falling along with the world economy. Where they will go in 2009 and beyond is anyone's guess, although a strong worldwide green energy push could keep them low.

2. Insurance.com's Tips for Hurricane Homeowners and Car Insurance Claims

"As Dostoyevsky said, 'You are wise to provide yourself with what you need, for it will all come in handy in the future.'"

We hope you didn't have to use this article, but it has good information about preparing for and making claims related to hurricanes and other natural disasters. The worst hurricane to hit the U.S. in 2008 was Hurricane Ike, although Hurricanes Dolly, Gustav, Hanna and Omar also affected many Americans.

3. Look Before You Peep: A Leafer's Guide

"Even though leaf-peeping sounds rather naughty, it actually involves looking at trees."

Ah, trees. As Ronald Reagan said, "I mean, if you've looked at a hundred thousand acres or so of trees—you know, a tree is a tree, how many more do you need to look at?" Obviously many people feel otherwise, which is why so many of them go leafing. This article also contains an interesting literary exercise that, like many of the best leaves, is hard to spot.

4. Usage-Based Car Insurance: The Freedom to Choose in California - and Elsewhere

"So, are the potential savings worth it? Would you voluntarily place a tracking device in your vehicle for auto insurance savings?"

Proposed insurance regulation in California stirred controversy because one of its mileage-verification options is a device installed in your car to track your mileage. Many consumer advocacy groups argue that visual verification is sufficient. You don't have to be a conspiracy theorist to see how putting an electronic device in your car that can communicate with your car insurance company via cell phone conjures up images of Big Brother, regardless of what it's actually used for.

5. National Drive Safely Work Week: Save Lives and Money

"Insurance.com's data supports the relationship between safe driving and lower premiums."

This article answers the often-asked question of how much a ticket or accident increases your car insurance. It turns out that it can be quite a lot: as much as $200–$400. If your safety and everyone else's wasn't enough to get you excited about safe driving, maybe the opportunity for significant savings will be.

6. Nitrogen in Tires: Hot Air or a Cool Breeze?

"If you can get your tires filled with nitrogen for free (as part of a deal with new tires, for example) it's probably not a bad idea—the advantages are minor, but a free advantage is always a good one."

Unfortunately, filling your tires with nitrogen is not a substitute for regularly checking their pressure. Still, the debate is interesting, and some people adamantly insist that they get better gas mileage and improved handling.

7. Racing to Find Car Insurance

"Driving well above the street-legal speed limit was simply not what your insurance company expected when you said you drive your car "primarily for pleasure"—and your rates are based on expected driving—not racing."

If you like to race or are a performance enthusiast, you need to read this article. In the past, car insurance may have covered driving improvement classes where you were able to safely exceed normal street speeds. Now, however, most insurance companies have closed loopholes in their standard policies that allowed it, leaving you without coverage.

8. How Did Your Vote Affect the Future of Driving?

"Energy issues were high profile while gas prices were sky-rocketing, but will this administration remain focused on this issue for the long-haul?"

The 2008 election was historic and important. The country needs leadership that will guide us out of our current situation. Will the energy and environmental promises of the campaign trail take a backseat to the economic recovery, or will the Obama administration find a way to link the two?

9. How Bankruptcy Affects Car Insurance Rates

"We believe that insurance companies can and should evaluate their risk criteria based on insurance risk scores and determine ways to help consumers retain their insurance coverage."

Usually, things like bankruptcy and foreclosure hurt your credit score and can also raise the car insurance rates you receive. Because the economic crisis is reaching well into the middle class, more people than ever before are declaring bankruptcy. We hope that when insurance companies set rates, they consider that a poor financial situation may not mean what it used to.

10. Will Insurance Companies Weather the Financial Storm?

"Because of the strict state regulation of insurance companies, your insurance policy is one of the safer financial products available, and your insurance company is probably safe as well."

There's some good news about your finances after all! If you're confused about why your insurance policies are still good even though you've heard so much about insurance companies failing, this article is for you.

Introduction to Insurance

Probably, no body knows what may happen tomorrow, even the Aerosmith front man Steven Tyler did write in his hit song 'Dream On' that "No body knows where it comes and where it goes". And, the line did approach to everyone. So what's next, no body knows. Life is not similar as before when Pandora opened the magic box and it lead to path of sorrow and destruction. So humans are mortal now, and nobody knows when the Lord of Death come and take us. So it's time to think not only for us but for others. With the growing need and demand, insurance is today's growing need. So what's the insurance?

Insurance is a way which provides security to the person and his property. It is a means of shifting the risk to insurer in consideration of a nominal cost called premium. Insurance thus, is a contract to indemnify loses occurred due to any particular risk, in consideration of cash payment in shape of premium. It provides financial protection against any specific risks.
According to Edwin W. Patterson,"Insurance is a contract by which one party for a compensation called the premium assumes particular risks of the other party and promises to pay to him or his nominee a certain of ascertainable sum of money on a specified contingency."
According to Insurance Business Act,"Insurance is defined as a contract made by the person paying certain amount based on estimated life and he or his representatives gets the amount after his death or expiry of policy period."

Functions Of Insurance

Basically, it has two functions, viz, Primary and Subsidiary Functions.

-Primary Functions
Act of assessing the risk and minimizing financial risk using remedial measures to protect from loss immediately is the primary functions. Some of the primary functions are:
1. To provide assurance: Financial risk is unpredictable factor, so we can't assess the amount of loss which may take place in future. Insurance provides assurance by the agreement of compensating loss which takes place in future against premium.

2. To guarantee the protection: It guarantees protection against large and uncertain losses in return of nominal amount of premium.

-Subsidiary Functions
By the operation of insurance business, it performs various function to facilitate people are known are known as subsidiary functions.

1. Mobilization of capital: Insurance company collects the amount as premium from no. of customers and forms large amount of capital. It invests such capitals in the development.

2. Helps to increase the efficiency: Person who is insured feels more safe, active and enterprising.

3. Helps to minimize loss: In this modern age, insurance company makes the investigation to find out the tools to minimize the loss.

Life Insurance

It is one of the most common form of insurance. Life insurance is a contract in which insured promises to pay a uniform rate of premium at fixed interval against which the insurer agrees to pay a fixed amount on the happening of the event which may be the death of the insured or the expiry of a certain amount of years. This contract cab be described as 'contingent contract' because the loss of life can't be compensated but only a specified sum of money is paid if the insured dies.
It is assumed that life insurance companies so percent of the total insurance business performed in the world. It was believed to be started in England and other European countries in 16th century.

Types:
1. Endowment Life Insurance: The endowment policy is issued for a fixed period of time, e.g. 15 yrs, 20 yrs, 25 yrs, etc. The premium is payable during that period only the sum assured is payable to the policy holder on the maturity of the policy or the dependent of the policy holder on the death before the maturity of the policy.

2. Whole life insurance: In this insurance, insured person will have to pay premium amount in whole of his life time and sum assured is paid to the dependent insured person on his death. After the death of insured person, no need to pay premium by the dependent of insured person.

3. Term life insurance: It is a short term insurance. It is made only for the short period until and unless the amount of loan is repaid. It is made to give security to the creditors or lenders premium of such insurance will be very much nominal.

Non-Life Insurance

Fire Insurance: It is a measure to provide financial security against the risk of fire. The necessity of fire insurance was felt for the first time in England in 1666., when one-third of the London was destroyed by fire. Fire insurance is a contract in which the insurance company promises to pay a sum of money due to loss by fire to the property during stipulated time on the consideration of a premium amount paid by the issued. This contract doesn't help in controlling or preventing fire but it is a promise to compensate the loss of fire. Thus fire insurance is taken to safeguard from the loss of property due to fire.

2. Marine Insurance: It is the oldest form of insurance. It is attempt to minimize the loss due to perils of the sea in course of sea transportation. Marine insurance is agreement where the insurer undertakes to indemnify the insured and the extent they agreed against marine losses, that is to say that incidental losses to marine adventure. Marine insurance policy mentions for which the loss may be compensated. Marine insurance covers a large no. of risks including sinking, burning of ship, astray of the ship, accident, collision, of ship, etc.

3. Motor Insurance: Insurance which compensates loss of motor or vehicles owing to accident, theft, or similar type of risks. Such insurance is like the compulsory insurance in country like Nepal. Insurance company compensates the loss of goods and amount for the death of passenger and loss of vehicles.

Advantages of Insurance

1. Financial protection: Insurance provides financial protection to an insured. It guarantees or gives protection against large and uncertain loss in return of nominal amount of premium. Insurance provides certainty of payment in case of loss. Thus, it gives a feeling of security against the possible risk of uncertain events.

2. Reduction in risk: Humans are exposed to various kinds of risk and uncertainty. It is impossible to eliminate risk and uncertainty. Insurance is cooperative effort of sharing risk. Thus the impact of risk can be reduced through the distribution of risks to the no. of particles who has made insurance.

3. Encourages saving: The insured has to pay a premium regularly. Thus it encourages the habit of saving specially in life insurance. It creates the habit of saving to the insured person.

Disadvantages of Insurance

-It makes bias to the insured because any type of loss will be compensated by insurance company.
-It increases crime for the shake of getting compensation from insurance company.
-Sometimes the total amount of premium might be higher than the policy amount receivable on maturity.
-Insurance encourages savings even though it doesn't provide facilities. So it is more beneficial to deposit amount in the bank rather than in insurance.