Surprise: No Increase in Car Insurance Premium

Last February, I had a little incident on the way to work: I was pulled over for speeding out side our house. After delaying my court appearance for almost three months, I eventually went to see the judge and settled my case. The price was a fine of $220 plus two points. I got some suggestions on how I can eliminate the points and prevent my auto insurance premium from going up after posting my story, but lot of things have been going on and I never got time to follow any of the suggestions. So the points stay. Naturally, I expected that our auto insurance premium could go up due to the incident.

Yesterday, the car insurance renewal package from Ameriprise arrived and to my surprise, not only the premium for 2008 doesn’t increase, it actually comes down a little. In January 2007, when I switched our auto and home insurances from Liberty Mutual to Ameriprise, the premium for a half-year coverage of our two cars was $559, one car with full coverage and the other liability only. The new rate for 2008 is $555 in total, with the $4 reduction from our Odyssey.

Well, it’s always possible that if I didn’t have that incident and hadn’t been assessed two points, my rate could be lowered even more. I don’t know if that would really be the case, because in the past 10 years, I almost never saw my rate go down even when I didn’t have any violation. It either kept going up (like my first insurer Amica which eventually forced to switch provider) or stayed the same (Liberty Mutual). So I was pleasantly surprised to see a bill the same size as last year. At least it won’t make me regret for not taking an action

*Photo from Safeauto.

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One More Benefit from Ameriprise Auto Insurance

We switched our auto and home insurance from Liberty Mutual to Ameriprise through Costco last year after some evaluations. The IDs arrived last week with an extra benefit that I didn’t expect before switching: Free 24-hour nationwide roadside assistance for Costco Executive Member. Though this service is mentioned on Costo website, there are much more details on exactly what are offered through this service:

• Have a flat tire
• Run out of gas
• Get locked out of your vehicle
• Get stuck in mud, snow, a ditch, etc.
• Have a dead battery

The switch not only saved us more than $300 in auto insurance premium, but also eliminated the need of my AAA membership. That’s another $60 per year.

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Identity-Theft Insurance: Why You Don’t Need It

Actually, I never knew such thing as identity-theft insurance till today when I read an article on MarketWatch.com, which named ID theft insurance "Stupid Investment of the Week." Though a little surprised, it isn't that hard to imagine why such products exist: there must be demands. After all, we insure everything deemed valuable: life, health, home, car, and pets. And since we care so much about our identities (the article says The Federal Trade Commission estimates that more than 9 million are victims of ID theft every year), getting a protection makes sense. But do we really need a policy for it? The author of the MarketWatch article declared ID thety insurance "will provide minimal extra protection and could be a hassle to open during a storm." 

For the ID theft insurance, the article quoted the National Association of Insurance Commissioners as

… identity-theft insurance won't protect you from becoming a victim any more than fire insurance would stop your house from burning down and "does not cover direct monetary losses incurred as a result of identity theft."

So if the policy doesn't cover "direct monetary losses," what does it cover? Take a look at AIG's Personal Identity Coverage which provides the following services:

• Identity theft specialists are on call to guide individuals through the process of restoring their identity profiles and credit records.
• A guide, complete with form letters to send to creditors and bureaus, is provided to each identity theft victim.
• Coverage is provided for lost wages as a result of time off work related to a covered stolen identity event.
• Expenses related to the recovery of an identity, including defense costs for certain civil suits, re-filing for loans and reimbursement of fees are covered.

The Identity Theft Resolution Service from MatLife (with no additional cost to auto & homeowner policy holders) includes the following features:

• Direct assistance with filing police reports
• Assistance in placing fraud alerts with credit bureaus.
• Identification Recovery, which provides direct assistance with notifying governmental agencies should your documents be lost anywhere in the world or due to natural disaster or fire.
• A full year of active credit monitoring follow-up to ensure the thorough resolution of your identity for you and members of your household.

In terms of coverage, the AIG plan does offer reimbursement of lost wages due to time off from work to clean up the aftermath, and that's a big plus compared to the MatLife plan which only helps monitoring your credit for one year (is it because it's free for existing customers?). Just like any other products, different ID theft insurance plans give you different coverages and it's the details of what you will get in the event you need it that separate them (Go to Insurance Information Institute for a list of ID theft insurance providers).

At the end, the author noted that 

A consumer who is concerned with identity theft would regularly check credit reports to look for unauthorized activity, would guard personal account information, shred documents with account numbers or any significant details, review bank statements and more. Those actions go much further towards protecting the consumer from identity fraud than insurance.

Indeed, you probably will be better off getting a credit monitoring service to prevent the identity from being stolen than trying to recover some loss after the damaged is done.

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Ameriprise Paper Works Received

One week after I called Ameriprise for our car and home insurance, the paper works from Ameriprise arrived last night. The estimated premiums and coverage options are exactly the same as what I got a week ago: home insurance one-year premium $207.27 and auto insurance six-month premium $666. However, I am not sure if all the discounts were applied because I wasn't asked for my Costco membership number during the phone interview.

On the home insurance application form, there is a section for me to provide the membership number and membership level (already entered "Goldstar" but I actually have an Executive membership, don't know if this will make any difference). But no such information can be found on the auto insurance form. At the bottom of the cover letter, however, it does indicate that the following discounts have been applied to the quote:

• Anti-lock breaks;
• Auto/Home
• Anti-theft device
• Education level
• Dual airbage
• Costco
• Multi-car
• Safe driving history

So even without the membership number, the Costco member discount probably is already factored in the quote. For the anti-theft device part, I may get some extra discounts with the window etching we had on our cars. When we bought the van last year, the dealer promised that we could get up to 15% discount on insurance premium with that feature and we did save a little bit with our current insurer Liberty Mutual (though I don't think it's 15%). I wasn't asked for any additional anti-theft device during the phone conversation with Ameriprise last week.

Finally, Ameriprise offers credit card payment option for the premium. That means I can get another 2% back if I pay the bill with my Fidelity 529 MasterCard. With Liberty Mutual, I can only pay with check or through bank transfer, no benefits at all. So far the comparison between Liberty Mutual and Ameriprise has made us lean towards Ameriprise and we pretty much decided to make the switch if nothing happens to change our mind between now and the end of the year.

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Called Ameriprise, Got Auto & Home Insurance Quotes Plus a Hard Credit Pull

Last Tuesday, I got an estimate of auto insurance premium from Ameriprise after receiving an email from them. Since I didn't give them my social, the quote was only an rough number, plus it was for auto only, not auto and home. Even so, the price was still lover then what I am paying Liberty Mutual now. A reader later also had some nice words to say about their rates and services. 

I waited till last Saturday to give them a call to get a better quote. After the home insurance quote but before the car insurance, the CSR told me I had to provide both my and my wife's SSN for a credit check in order to get an accurate quote. Though the home insurance premium came out better than we paid Liberty Mutual ($207 vs $253 for our townhouse), I wasn't ready for the credit pull before knowing I can really save some meaningful money with them. I asked the CSR to assume the best credit first and let me see how competitive their rate can be before the credit inquiry. With exactly the same coverage as I currently have with Liberty Mutual, the full year premium is $1252, compared to Liberty Mutual's $1516, a good amount of savings that justified a credit check. So I gave her our SSNs and the rate of auto insurance inched a little higher to $1332. Asking the CSR what caused the increase, she said it could be a number of factors and wasn't give me anything specific. Later on I suspected it could the high balance on my credit cards due to 0% BT. Though I paid off two of the three offers last week, the balance won't be cleared until sometime next month the earliest. When the CSR ran the credit check, she still saw some $32,000 balance on my credit cards. There could be other reasons, but this definitely affected the price, more or less. The home insurance, however, didn't change after the inquiry.

The quote was for full coverage for both cars. If I only insure my 2000 Honda Accord with liability, the premium dropped to $1118, more than $200 lower. I still haven't decided whether to keep the comprehensive for my car. It's 6 and half years old and has more than 82,000 miles on it already and I only drive the car to work every day on local roads. The chance of having an accident is much lower than two years ago when I had to commute nearly 120 miles round trip every day to work. Of course, people can have accident anywhere.

I have asked a hard copy of the quotes and other related information being mailed to me and I have till the end of January to make a decision on whether to keep the comprehensive coverage for both cars. But I'll definitely switch from Liberty Mutual to Ameriprise if nothing happens between now and next January that makes me change my mind.

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Auto Insurance: Should I Switch?

Early last month, I updated our car information with Liberty Mutual, our current auto and home insurer. The policy won't expire till the end of next January, and we have been quite happy with their rates and services for the past three years. Therefore, we aren't actively seeking any replacement, though the premiums went up a little bit (less than $100) every time we renew our policy. Then this morning an email from Ameriprise Auto & Home Insurance got my attention. Without reading the message, its subject "Costco members who switched saved on average $400" was enough to generate some interests. Actually, I have seen Ameriprise on Costco website before, but never gave it any serious consideration. This time I thought if I can really save several hundreds with them, it doesn't hurt to get a quote.

Following the link in the email, I went to Ameriprise and gave exactly the same coverage we currently have with Liberty Mutual:

• Bodily Injury: $50K each person, and $100K each accident;
• Property Damage: $50K each accident
• Uninsured/Underinsured Motorists: Same as above
• Medical Expense Limit: $250K
• Medical Expense Deductible: $1K
• Collision Deductible: $1K; other damage deductible: $1K

If both cars get the comprehensive coverage, the six month premium from Ameriprise is $714, compared to $1516 for a full year with Liberty Mutual. If I drop the full coverage on the 2000 Honda Accord, the premium became $600. Though the online quote isn't very accurate (it said I can get more accurate estimate if I provide my social security number, but I didn't), the number still slightly favors Ameriprise. Besides, the above quote is for auto only, and what we paid Liberty Mutual is to insure both cars and home with them. So if I do switch, it's possible to save a couple of hundreds. On top of the savings on premium, another bonus with Ameriprise, as mentioned in the email, could be

As a Costco member, you can charge your insurance premiums to your American Express Costco Cash Rebate Credit Card or TrueEarnings Card and earn a rebate on all eligible purchases.

With my Executive membership, there could be an extra 3% (1% from TrueEarnings card and 2% from Executive Member rebate??) discount of the premium, making the switch more attractive. However, I have a couple of concerns about the switch. First, this will be my fourth auto insurance company since 2001 (I have switched from Amica to AAA to Liberty Mutual) if I make the switch; second, I probably have to give them my SSN to get a better estimate and they may check my credit history. It won't be a big deal if eventually I use them, but what if the saving is not good enough? A credit inquiry may only get me a quote.

I intent to give them a call to get quotes for both auto and home insurance and see if they can do it without checking my credit.

Finally, anybody has any experience with Ameriprise? I have never had any business with them before and have no idea how goog they are.

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Auto Insurance Renewal and How to Trim the Bill

A letter from Liberty Mutual came yesterday, asking us for an update on our vehicles, a car and a van, which are both insured with then under comprehensive coverage. 

It's the time to renew our auto insurance.

I have been with Liberty Mutual for three years and have both auto and home insurance with them. Under the current auto policy, we pay $1516 a year for the two cars and the coverage includes:

• Liability: Bodily Injury: $50K each person, and $100K each accident; Property Damage: $50K each accident
• Uninsured/Underinsured Motorists: Same as above
• Medical Expense Limit: $250K
• Medical Expense Deductible: $1K
• Collision Deductible: $1K; other damage deductible: $1K

Though the total cost isn't that bad considering that New Jersey has notoriously high auto insurance premiums in the nation, I plan to drop the full coverage on the car when renewing the policy. The car, which was purchased new in 2000, has more than 80K miles on it already. For the past six years, the idea of changing coverage never occurred to us, though we switched insurance a couple of times and didn't have any accident (the only claim we filed for the car was four years ago when it was hit by a deer). Since now I only use the car for commute (30 miles round-trip, local driving), the full coverage doesn't seem to be necessary. Under the present policy, the cost for the coverage for damage is $253. Changing to liability only may save us a couple of hundred dollars a year. 

So far I am quite happy with Liberty Mutual and there's no plan to change insurer just yet, but Costco says on its website that members can save as much as 20% on auto and home insurance. I don't know how believable that statement is; it doesn't hurt to give them a call to find out their rate.

Speaking of trimming the auto insurance bill, if you can’t change your ZIP code or build a garage for your car, you may find the following tips helpful:

• It pays to shop around. This is the rule-of-thumb not just for insurance, but for almost everything you shop. However, I will only use online quote as a screener to get an idea of the price range I may be in. Give the insurer a call for a second quote will give you the exact number.
• Buy a safe, reliable car. Yes, the maker and model of your car also have huge impact on your insurance bill. If you buy a low safety rating vehicle that costs a lot to repair, you will see it in your bill. Also, try not to buy those models that are attractive to thefts.
• Set a higher deductible. Don’t settle with $250 or $500 deductibles if you really want to save. As you can see, I $1000 deductibles for both the demage and medical expense. From my experience, I found this could be the single most effective ways to cut my insurance bill. Get quotes for $250, $500, and $1000 deductibles and you will see the difference when other selections remain the same. And with higher deductible, you may drive more carefully.
• Buy home and car insurances from one insurer. This way you can enjoy discounts for multiple policies.

Finally, you don't need a comprehensive coverage if your car is only worth several thousand of dollars, as what I want to do for my car.

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A 8-Step Course for Your Personal Finance from CNNMoney

As we entered the last quarter of 2006, there are some articles recently offering advices on how to get your personal finance in order at the end of the year and be prepared for 2007. For me, there are at least three things I plan to do for our investments before year end:

• Rebalance both taxable and tax-deferred investment plans;
• Max out 401(k) and Roth IRA contributions;
• Add money to 529 plan;

Today, there is another piece from CNNMoney that offers a 8-step course:

1. Rebalance your 401(k): Rebalance to keep each asset class within its target allocation, but don't make any upside-down change.
2. Revisit your estate plan: Review your will, add any new property, check your giving plan, and make sure that your guardianship plan for your kids still makes sense.
3. Sock it away: Maximize your IRA contributions and keep cash in high-rate accounts which are not difficult to find.
4. Give smarter: Keep a list of items you donated or want to donate and assess the fair values of your non-cash donation; otherwise, you may pay more penalty for overstated your donation under the new pension law.
5. Review your health plan: Be sure to sign up the flexible-spending account when you renew you health care plan.
6. Clean up your taxable account: Dump some hopeless losers before the year end to offset capital gain/dividend incomes that will be taxed. Best of all, the loss can be carried over into 2007. But be aware of the wash-sale rule.
7. Do a property insurance checkup: Don't be under-insured!
8. Check the new credits and taxes: New "kiddie tax" rule: for kids under 18, their annual investment income will be taxed at their parents' rates if it's above $1700.

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Trim Your Auto Insurance Bill

Got a heavy auto insurance bill? If you can’t change your ZIP code or build a garage for your card, you may find the following tips helpful in reducing your car insurance premiums, according to Kiplinger’s.

• It pays to shop around. I believe this is the rule-of-thumb not just for insurance, but for almost everything you shop. However, I will only use online quote as a screener to get an idea of the price range I may be. Give the insurer a call for a second quote will give you the exact number.
• Buy a safe, reliable car. Yes, the maker and model of your car also have huge impact on your insurance bill. If you buy a low safety rating vehicle that costs a lot to repair, you will see it in your insurance bill. Also, try not to buy those models that are attractive to thefts.
• Set a higher deductible. Don’t settle with $250 or $500 deductibles if you really want to save. I always select $1000 deductibles and found this could be the single most effective ways to cut my insurance bill. Get quotes for $250, $500, and $1000 deductibles and you will see the difference when other selections remain the same. And with higher deductible, you may drive more carefully.
• Buy home and car insurances from one insurer. This way you can enjoy discounts for multiple policies.

Of course, you don’t need a comprehensive coverage if your car is only worth several thousands of dollars.

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