4 Important Questions to Ask About Totaled Cars

A totaled car isn’t just a devastating experience. It can also be a complicated process. It’s perfectly normal—and expected—to have lots of questions about how the process works, how to deal with your auto insurance provider, and beyond.

First, it’s important to make sure you understand exactly what a totaled car is. To put it simply, it’s when it’s determined to be a “total loss,” or it would cost more to repair the car than the car is worth. Read this for more information on what a totaled car is.

Then check out these common questions (and answers!) on totaled cars. We hope you never have to undergo this experience—but it’s always best to be prepared.

1) How common is “total loss”?

A totaled car, or a car determined to be a “total loss,” is more common than you might think. According to CCC Information Services lead analyst Susanna Gotsch, 14.24% of all vehicle appraisals in 2013 were determined to be a total loss.

2) Who decides if my car is totaled?

Both your insurance provider and your state’s laws determine whether your car is totaled or not. Be sure to be aware of both your insurance coverage and how your state defines total loss.

3) What is the worth of my totaled car?

Your insurance provider bases this off of the market value of your car right before the accident. It’s determined by type of car, mileage, condition, standard features, extra features, and where you live.

If you want to figure out what your car’s market value was before the accident on your own, you have a couple of options. You can use websites like Kelly Blue Book to look up a typical market value of a car like yours or you can get another estimate from an appraiser.

4) What is gap insurance and how does it work? Do I need gap insurance?

Gap insurance is important to be aware of. If necessary, gap insurance can cover the difference between what your car is worth and the balance you owe on it. If you’re financing or leasing a car, gap insurance could be helpful for you—especially if you are less than halfway through an auto loan. If you own your car or if you owe less on the loan than the car is worth, gap insurance isn’t necessary.

If you have a totaled car and you are in the first half of financing or leasing a car, you could still owe money on a loan—for the same wrecked car. That’s where gap insurance can come in handy.

Any questions? Contact SaveALot Auto today

To learn more about how a totaled car could affect you, feel free to contact the auto insurance experts at SaveALot Auto today. Check out our FAQ for more answers to common questions.

How Do I Insure My Classic Car?

If you have a classic car that’s been restored, you probably want to get special insurance to make sure you are covered for the actual value of your car. An insurance company might give you an average sounding quote if you simply tell them you have a ’71 Mustang. But that’s because they only plan to pay you, in case of an accident, the cash value of a typical ’71 Mustang (which isn’t much!). If your Mustang is in mint condition, has restored everything, a new engine, show tires, etc… you definitely won’t be sufficiently covered by the average auto insurance policy.

Fortunately there are auto insurance companies that specialize in classic cars. Often the same companies insure classic boats, modified cars, and sometimes even priceless heirlooms. Since these companies specialize in antiques and collectibles, they will be better able to determine the insurance value of your car, ensuring that the loss of your vehicle, should it occur, will not be financially devastating.

Several qualifications must be met for classic auto insurance. Most importantly, these insurance companies will not insure daily use vehicles. Often a limit of 5,000 miles per year is imposed, to allow for pleasure driving and short trips to shows (for longer trips the vehicle should be towed). This is the same limit enforced by motor vehicle divisions when you apply for historic license plates. Next you must check with the insurance provider to make sure your car really is an antique or collectible car. Some 1970s and 1980s models will not qualify, but if your car was made before 1972, you’ve got an antique on your hands, no doubt. Finally you must make note of all modifications, updates, and restorations made to the car. A classic car insurance agent is an expert who will know the true value of your vehicle, and can ensure that any repair work done to it uses the appropriate parts.

If you choose to go with a classic car insurer rather than a typical auto insurance policy, you may be surprised by how affordable your premium quote is. This is mostly because of the low miles the car will clock on the road – it is out of harm’s way most of the time, and therefore a very low risk to insure, even if it is worth $30,000 or more. Inexpensive classic car insurance can also be obtained for vehicles completely off the road for restoration or storage, covering theft, fire, and other non-collision losses.

So if you are thinking of restoring a car, it is probably unwise to do so if you must use that car for everyday driving. Your insurance company won’t cover the true value of the car, and you could be out all of your work in the case of an accident. But if you have a beauty that you can afford to limit the miles on, it may be worth keeping her off the streets in order to qualify for classic car insurance. With a low premium and the peace of mind that you are insured for the full value of your investment, you can better focus on your hobby.

What is Auto Gap Insurance?

Auto gap insurance is insurance you can purchase to cover the “gap” between the cost of repaying your car loan and the amount the insurance company will actually give you for your totaled car. Since a new car depreciates as soon as it leaves the lot, it is already worth less than you owe on it. Even if you were to total your new car the same day you bought it, the money your insurance company will pay out for the car will not likely cover the balance of the loan. Gap insurance is the only way to make sure you will not be in debt after losing your new car.

Gap insurance can sometimes be purchased on newer used cars, where the dealer price of the car still may be significantly higher than an insurance payout would cover. Some insurance companies will only cover brand new cars, however.

So how do you get gap insurance? First ask your current or prospective insurance provider if they can give you gap coverage. Just like you would shop around for your basic auto insurance premium, you may want to shop around for your gap coverage. It is usually very affordable, and worth the extra cost to ensure that you do not end up carless and saddled with thousands of dollars in debt. Some dealers may try to sell you their own auto gap insurance as an add-on, but you can often get a better deal by purchasing this special coverage on your own.

Gap insurance is often required when leasing a car. It the coverage may be included in the lease price, but if not you will need to make sure you are covered. Since you didn’t purchase the car, the dealer will lose money if it is totaled. So they may want repayment from you immediately.

Finally, if you have an older car you are probably not eligible for gap coverage. If you still owe money on your older car, the best thing to do to protect your investment is to drive safely!

Whether or not to purchase gap insurance is a decision only you can make as a car owner, balancing the supplementary insurance premium cost against the potential risk of finding yourself with a totaled car in the future. Like all insurance, you never know when you might need it, but you sure are relieved that you are covered when an accident happens.

This article is brought to you by SaveALot Auto Insurance, where Chicago, Illinois and Indiana drivers get quick, free auto insurance quotes.

Top Ten Websites for Auto Insurance Laws

Top Ten Websites for Auto Insurance Laws

Searching all over the web to find out your state’s coverage minimums? Need to find out your rights as an auto insurance consumer? We’ve put together a list of some of the top websites for insurance law information.

1. Insurance Information Institute
http://www2.iii.org/individuals/autoinsurance/

At the Insurance Information Institute you can find out how auto insurance works, determine how much coverage you need, and learn the steps of filing a claim. You can also explore statistics for things like teen driving, driving and cell phones, etc, and watch videos of what to do after an accident.

2. Auto Insurance Remedy
http://www.autoinsuranceremedy.com/auto-insurance-state-by-state.php

At Auto Insurance Remedy you can review the lists of minimum coverage requirements by state, and read articles from some of the nation’s top insurance providers.

3. Consumer Action
http://www.consumeraction.gov/caw_insurance_auto.shtml

At this federal government site you can find links and contact information for your local insurance regulator, and read tips on finding insurance that complies with state laws. Consumer Action also helps you know your rights as a consumer, and provides advice on staying safe while researching auto insurance online.

4. About.com on Auto Insurance
http://personalinsure.about.com/cs/vehicleratings/a/blautominimum.htm

About.com has good articles on anything you want to know about insurance, by a real life auto insurance expert! This link is to a list of state minimums, with lots of in-article links to state law information, and an educational video.

5. Wikipedia on Auto Insurance
http://en.wikipedia.org/wiki/Vehicle_insurance

While you should always visit your state’s official site for your specific insurance minimums and insurance consumer rights, Wikipedia has a comprehensive article covering auto insurance and auto insurance laws around the world. The article also contains good general information on coverage levels and insurance terms, and links to articles by reputable sources. If you are completely new to auto insurance, Wikipedia is an excellent place to start!

6. CyberDrive Illinois

http://www.cyberdriveillinois.com/departments/vehicles/mandatory_insurance.html

At the official website for the Illinois Secretary of State (Illinois’s DMV), you can review Illinois state minimums, find out where to purchase Illinois auto insurance, and read about vehicle codes and laws that affect Illinois drivers.

(Note: We’re based in the Chicago area, so we’re including these two Illinois government sites – #8 and #9. Every state has different laws and regulations, so we recommend that you go to your state’s specific website(s) to get the appropriate information.)

7. Illinois Department of Insurance
http://www.insurance.illinois.gov/

The Illinois Department of Insurance provides news and articles for consumers, businesses, and insurance providers. Stay up to date on the latest insurance laws in Illinois, and know your rights as a consumer of auto insurance.

8. SaveALot Auto Insurance
http://savealotautoinsurance.com/

SaveALot Auto Insurance provides definitions of insurance terms and descriptions of insurance laws via their helpful “Insurance Information” articles. A leading provider of Illinois auto insurance, SaveALot specializes in guiding the consumer who is new to auto insurance, or who has had past auto insurance troubles.

Hopefully this list helps you find the information you need about your state’s insurance laws, and provides you with the knowledge to help make purchasing auto insurance online a safe and painless process.

This list was compiled by SaveALot Auto Insurance.

My Car is “Totaled.” (What Does That Mean?)

The term “totaled” comes from the insurance term “total loss.” Put simply, when the cost of repairing a damaged vehicle exceeds the cost (or a set percentage of the cost) of repairing the vehicle, it makes little financial sense to spend the money for repairs. The insurance company calls the vehicle a total loss, and gives you cash for the vehicle.

Many drivers are upset when an insurance company tells them their car is totaled. When we think of a totaled car we think of a mangled pile of steel. However, since the decision to total the car is based on the amount of money it will cost to fix the car, and the damage may not always be apparent, a car that still looks fixable (especially to an owner who can’t bear to part with it!) may actually be totaled.

In some states drivers have some recourse, and can work with the insurance company on determining what will happen to the vehicle. For instance, shopping around for better estimates from trusted body shops, as well as finding shops that will use non-manufacturer parts, may lower the cost of fixing the vehicle. Check out state websites and know your rights. But keep in mind, the insurance company is not only considering the cost of the repairs, but also the cost of your rental vehicle, towing, storage, and any other incidental expenses associated with a lengthy and complicated repair. You may also choose to keep the totaled vehicle if you are hopelessly attached (is it your property), but the insurance company will not be able to get paid by the salvage yard, and this may affect your payout. Keeping a totaled vehicle, moreover, is not usually in your interest (unless you like the look of beehive and weed infested steel on your lawn).

If your vehicle ends up totaled, despite your efforts to work with your insurance company, you will be given the “actual cash value” of the vehicle, based on an appraiser’s estimate. The appraiser has to consider the condition of the car before the accident, so unfortunately the “actual cash value” is probably not going to buy you a new car.

Totaled vehicles are not good for the driver, and not good for the insurance company. So drive safe and avoid accidents!

This article is brought to you by SaveALot Auto Insurance, where even less-than-perfect drivers get the lowest auto insurance quotes every day.

What Are the Most Expensive Cars to Insure, and Why?

Insurance companies use many factors to determine premiums – how much you pay for your auto insurance. Some of these factors reflect the relative risk of your personal situation, such as age, gender, and location. But what about the car you’re insuring? Yes, the car brand, model and age are very important factors. Insurance companies are meticulous about calculating the possible payouts for claims from their insured customers, and they base their calculations on huge amounts of data about drivers, the cars they drive, and the accidents that occur.

Believe it or not, companies actually create psychological profiles about the drivers and the cars they drive. When you think of how emotionally connected people can be to their cars, this makes a lot of sense. Do you ever feel that your car is a kind of projection of your own personality? Of course. The things we buy and show to the world often reflect our own images of self, and the way we want others to see us. So, it only follows that excessive horsepower could be correlated with the driver’s own aggressive tendencies. Conversely, low horsepower may signal a more practical, less risky personality.

Are colors also important predictors of accident risk? You might think so. For one thing, colors could vary in their visibility to other drivers and pedestrians. Colors might also match up to personality types like “red equals bold and aggressive”. But the truth is that, as far as we can tell, insurance companies do not explicitly factor your car’s color into rate calculations. There is some debate as to whether your car’s color can be determined by its VIN number, which the insurer could use even if you didn’t state the color; but we couldn’t find any conclusive evidence that this routinely used in evaluating insurance rates.

Insurance companies base some of their rate decisions on historical data about accident frequency, injuries, property damage and repair costs related to specific vehicle models. A particular model that consistently shows more collision, liability and medical costs than any other mid-size sedan will reflect those costs in relatively higher premiums for that model.

Body styles enter into rate calculations as well. Of the top-20 2010 car models with the highest premiums, four are 2-door convertibles (“ragtop” sports cars), and nine are 2-door coupes (“hardtop” sports cars). Nearly all of the top 20 have either 8-cylinder or 12-cylinder engines. And bearing names like Porsche, Mercedes and BMW, you know they carry high price tags and hefty repair costs. Conversely, the models with lowest premiums tend to be small, practical SUVs and minivans.

So let’s get to it (drum roll please). With credit to a recent study by Quadrant Information Services, the ten car models with the highest average premiums are:

  1. Porsche 911 Carrera GT2: $2944
  2. Mercedes S65 AMG: $2863
  3. Porsche Panamera TurboAWD: $2837
  4. Mercedes CL600: $2755
  5. Audi R8: $2752
  6. Porsche Panamera S: $2745
  7. Mercedes SL600: $2716
  8. Porsche 911 Carrera Turbo: $2706
  9. Mercedes CL65 AMG: $2700
  10. BMW M6: $2689

What Is SR22 Insurance?

So what is this mysterious SR-22 insurance?

SR-22 insurance, sometimes called “financial responsibility insurance,” is a state program to reduce the number of uninsured drivers on the road by requiring SR-22 certificates from drivers who have repeatedly violated mandatory insurance laws. SR-22 laws and processes vary from state to state, but in Illinois anyone who has three insurance violations (i.e. ticketed for driving without insurance) can be required to carry SR-22 insurance.

The SR-22 insurance itself is a certificate that is kept on file with the state, rather than just between you and the insurance company like your typical insurance would be documented. An insurance company who is authorized to write SR-22 policies will set up your auto insurance and accept your premium payments, but will then send your SR-22 certificate directly to your state’s motor vehicle division (or the office of the Secretary of State in Illinois). The certificate will show that you are maintaining at least the state minimum coverage on your auto insurance.

Typical insurance coverage can be started or renewed instantly, but SR-22 insurance requires a little more work on your part. It must be renewed early to avoid suspension of your driving privileges. Since you carry this special insurance because you do not have a good track record with maintaining coverage, the state will start to suspend your privileges once your expiration date is fifteen days away. Renewing early is important since your insurance paperwork, including the renewed certificate, must be received and processed by the appropriate office of the state — and we all know that takes time!

Anyone who requires SR-22 must cover all the vehicles they own as well as all the vehicles they drive with this insurance. You can be insured as only owner, if you don’t plan to drive the car; as only operator, if you drive your parents’ or someone else’s car; or you can be insured as both owner and operator of your own car. These three options may change the cost of your SR-22 insurance.

If you have been required by the state to carry SR-22 insurance, the only way out of this predicament is to have a bond for at least $55,000 (varies by state) showing you have the cash to pay for an accident. There are some special circumstances where drivers go this route. But since you lapsed on your coverage in the first place, it is not likely that you have the funds to buy a bond.

You must keep your SR-22 insurance current for the length of the penalty term you were given. Minor infractions can disappear from your record in as little as three years, but major violations such as a DUI can cause you to carry SR-22 for ten years or more, and may never disappear from your driving record.

The best way to prevent having to deal with the expense, inconvenience, and future fallout from carrying SR-22 insurance is to keep your insurance current and avoid criminal driving infractions such as DUIs.

This information has been brought to you by SaveALot Auto Insurance, offering affordable Illinois auto insurance and SR-22 coverage.



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Why Do I Need Auto Insurance?

Auto insurance can cost a lot of money for certain drivers, but even if you are one of those drivers who is seemingly stuck paying high premiums, be aware that you still need to have auto insurance!  Read on to find out ways you may be able to reduce those premiums, and to learn the three reasons why at least basic insurance is always necessary.

1.   State Law — It’s what your mom and dad will tell you, but we have to say it too:  It’s the law!  The number one reason (in the eyes of the state) you must have car insurance is that it is a requirement for even having a vehicle registered in most states.  States require car insurance to minimize the overall impact of property damage costs and to reduce the likelihood of huge accident-related medical bills going unpaid.  Insurance companies step up to absorb these costs in the event that damage or injury does occur – they are able to do so because you pay your premiums.

If you are unconvinced that you need to do something just because the law requires it, think about the true financial costs of breaking the law – if you get a ticket for not carrying insurance, that is a couple hundred dollars lost.  That money could have paid for part of your premium.  If you get another ticket, you could lose your license and even have your vehicle impounded.  The costs of paying tickets, regaining your license, and getting your car out of impound will definitely amount to far more than paying a year’s insurance premium.  Not to mention, the time lost at work because of not having a car could create even more financial woes and familial inconveniences.

2.    Financial Ruin — Besides obeying the insurance laws (because that’s what’s best for everyone!) another reason to carry insurance is because of the great possibility of actually getting into an accident!  Who can afford the costs of an accident?  Most individuals cannot.  Whether you care about your own car or not, you could still hit a Mercedes, or worse yet you could hit a car full of children.  And no matter what you may think, you have no control over this!  Insurance insures that you will be financially prepared to fix that Mercedes, to pay those children’s medical bills, and have someone on your side in case of a lawsuit — whether you have any intention of fixing your own car or not.

In fact, you can even carry lower cost insurance called “liability” (sometimes referred to as “liability only”) which only covers damages to other cars and drivers for which you are liable.  It does not repair your car, but it keeps you from being financially ruined.  (In the case of either accident mentioned above, without insurance you would surely be financially ruined, and probably sued as well.)  If you have an older car that you own outright, ask your insurance company about going to liability only on this car.  If this saves you money, perhaps you will not have so much trouble making a basic premium payment.

3.    Protecting your Investment — A final reason (though there are probably more…) to keep insurance on your car is to protect your investment.  Cars are probably the second most expensive thing we buy, next to homes, and they are in much more danger of getting damaged since they are, unlike our houses, always moving about!  If you do have a newer car or a nicer car, you should probably continue to carry liability and collision coverage on your vehicle.  Collision costs a little more than liability only, but it will guarantee that you can fix your car no matter what happens to it in an accident.  You will protect yourself from the burden of paying for damages to others’ property, but you will also protect yourself from losing money on a car you love, or a car you just bought.  (In fact, most banks will require that you have collision coverage, in order to make sure you can pay back the loan no matter what happens to the car.)  If you are not ready to pay for collision coverage on your automobiles, you should not be in the market for a new car.  One accident would turn your investment into a huge loss.

If you have questions about what level of coverage is right for you, and how to save money while keeping at least your state’s minimum coverage, contact your insurance company.  By adjusting coverage levels, raising your deductible, or applying certain discounts you may be able to find a rate that works for you.  If you can’t, you must apply to the state for help, or you must simply stay off the road.

The information in this article is brought to you courtesy of SaveALot Auto Insurance where Chicago auto insurance is available at the lowest rates for all drivers.



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