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Secrets of the Insurance


Here are some secrets of the insurance industry that can save you money and grief before, as well as after, an accident. As a Senator, Jim Donelan was a watch dog for the consumer when the insurance industry was trying to pass auto insurance reform at the Rhode Island State House. He knows that getting a good deal on auto insurance is difficult; and it's even more difficult to keep your premiums from rising. So here's some tips to help you keep auto insurance affordable and assist you when you have a claim.


At insurance renewal time your bad driving record is going to cost you more than the fine you paid for the ticket. Auto insurance companies usually obtain your driving record before they set your premium and send out your bill when your insurance is due; and, if your record has several violations on it you may even get cancelled. TIP - In Rhode Island we have the Good Driving Record Law for first time offenders. If you have a minor infraction and it's your first offense in a 3 year period most traffic court judges will dismiss the ticket. That will save you money when the bill for renewal of your insurance comes around. You can only use your good driving record once every 3 years because the court keeps track. Jim Donelan was the sponsor of this law when he was a Senator at the Rhode Island State House. Call him if you have any questions.


Most insurers will check your credit. Studies show that people with better credit are less likely to file a claim. So if you have good credit the insurance industry wants you as a customer and they will give you a better rate than someone with worse credit. The theory is you're more stable than someone who pays late. This helps them develop a "risk score" which is one factor that sets your auto insurance rate. TIP - Clean up your credit if you want a cheaper premium.


The Insurance Services Office (ISO) is an insurance industry support organization that gathers information and gives assistance to insurance carriers. One thing they do is collect data on most vehicles and rates them according to safety and theft probability. Most carriers use statistics generated by the ISO. The cars that are more likely to be stolen and are not as safe get a higher rating. The higher the number translates to a higher premium for you. TIP - Before you buy your next vehicle check with you insurance agent what the premium for the different coverages will be.


Items that you may leave in your car like expensive sunglasses, birthday presents, compact discs are not usually covered by your auto insurance. TIP - You may be able to recover the cost of the items that were stolen, less the deductible, by submitting a claim through your homeowner's or renter's coverage. And if you leave that expensive laptop in the car when you go to dinner, you may want to get a special rider on your home owners coverage. The same applies to expensive cameras, furs or other items over $500, and make sure you keep your receipts because the adjuster will want some proof that you actually own an expensive laptop. TIP - Talk with your insurance agent to see if it's worth the premium for the extra coverage.


As an owner of a car in Rhode Island you are responsible for any accidents your friends get into if you let them borrow your car. So if you let them borrow the car, and they get in an accident that's even partially their fault.... LOOK OUT..... It's going on your driving record. You'll also have to let your insurance company know about the accident, and your rates will probably go up as a result of the claim. However, if your car is taken without your permission, in most cases you won't be held liable for the damage. TIP - The bottom the line is, don't let other people borrow your car.


After an accident it can be very distressing arguing with your insurance company over the "fair market value" of your car. What you think it's worth and its actual value can be two different things. Don't accept the insurance company's first offer as the value of your car. You have rights to go to arbitration if you don't agree with the value. Show receipts for recent improvements such as a set of new tires helps increase their offer. Jim Donelan has settled thousands of car claims and will assist you to get the fair market value. TIP - Remember that deductibles don't apply when the other guy is at fault and it's his company that has to pay.


In Rhode Island when your vehicle is totaled as a result of the accident you won't have to pay the sales tax on the replacement vehicle you purchased up to the value of your totaled car. So if your totaled vehicle was worth $10,000, and the new car you purchased costs you $15,000 you will only have to pay sales tax on $5,000. TIP - When you go to register the new vehicle make sure you have the original "sales tax" letter from the insurance company stating the value of the old car. The registry will not accept a copy. Call Jim Donelan if you have a problem getting the letter.


Under Rhode Island Law you are allowed to stack uninsured and under-insured motorist (UM/UIM) coverage for each UM premium that's listed on the declaration page of your auto insurance policy. You are also covered for accidents with an uninsured driver for family members living in your house if they have a different policy. So if you've been hit by an uninsured or underinsured motorist and your son has a separate policy from another insurance company, you may be able to collect from that insurance company too. TIP - This coverage also applies if you or a member of your family has been hit as a pedestrian by a hit and run or uninsured vehicle. Circumstances vary so it's best to contact Jim Donelan before you make any claims.


When renting a car the rental agent always asks if you want Collision Damage Waiver insurance or otherwise known as CDW. If you have insurance from a Rhode Island insurance agent generally you don't need the CDW. That's of course assuming you have full coverage on your own car, which usually includes collision and comprehensive. So in most cases the CDW is not needed and it will save you money when renting a car. But if all you have on your own car is liability coverage then you may want to add the CDW coverage. TIP - Always check with your VISA or MASTERCARD company because they'll cover you if the entire rental is put on their card.


If you finance the purchase of a vehicle you may want to purchase "GAP" insurance. When you are involved in an accident and your car is totaled "Gap" insurance will cover the difference, or gap, between the balance owing on the loan and the fair market value of your vehicle. Many times a car depreciates quicker than the balance owed on the loan. TIP - Your car's mileage as well as it's pre-accident condition are 2 major factors in valuing the vehicle after an accident. So the car can depreciate quickly if someone is putting a lot of miles on the car. As a result you may be in for a surprise when you discover the fair market value of your vehicle is a few thousand dollars less than the balance owing on the loan.


Insurance premiums are usually offered and paid on a six-month or quarterly basis. Most carriers will let you pay them on a monthly basis but they charge a fee for the installment payment plan. TIP - If you can afford it, pay the whole premium when it's due rather than on the installment plan and save a few dollars.


Other factors also affect you premium. Unfortunately some of these are difficult to avoid.

MARITAL STATUS - Marital status profession and the area in which you live can affect your car insurance rates. If you are single, divorced, or even widowed, it will add to your auto insurance premium. Statistics show unmarried drivers are more accident prone than their married counterparts.

RESIDENCE - People living in urban areas also pay a higher premium for motor vehicle insurance than their rural and suburban neighbors.

OCCUPATION - Occupation also plays a part in setting premiums. Doctors, lawyers and judges pay a higher premium than scientists, pilots and even actors.

COLLISION AND COMPREHENSIVE - TIP - If your vehicle is worth less than $5000, you may to want to consider cancelling your collision and comprehensive coverages to save a few dollars. If your vehicle is totaled in an accident you may only receive a few hundred dollars in your pocket after the deductible is taken into account. Check your declaration page of your auto insurance coverage and see what you'll save. You may be surprised.

Checkout Understanding your Insurance for other secrets of your insurance company. 

Call Jim Donelan at 401-461-1500 if you have any questions regarding an accident.


Jim Donelan handles motor vehicle accidents such as car accidents, truck accidents, and motorcycle accidents in the following Rhode Island areas: Barrington RI, Bristol RI, Burrillville RI, Central Falls RI, Charlestown RI, Coventry RI, Cranston RI, Cumberland RI, East Greenwich RI, East Providence RI, Exeter RI, Foster RI, Glocester RI, Hopkinton RI, Jamestown RI, Johnston RI, Lincoln RI, Little Compton RI, Middletown RI, Narragansett RI, New Shoreham RI and Block Island RI, Newport RI, North Kingstown RI, North Providence RI, North Smithfield RI, Pawtucket RI, Portsmouth RI, Providence RI, Richmond RI, Riverside RI, Scituate RI, South Kingtown RI, Tiverton RI, Wakefield RI, Warren RI, Warwick RI, West Greenwich RI, West Warwick RI, Westerly RI, Woonsocket RI, Kent County, Providence County, Washington County, and through out South County, Newport County, East bay and West bay.


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