Category: Auto

Should I Use a Personal Automobile Policy for my Company Car?

Automobile insurance covers the owner of the car, the driver of the car, and/or an insured driving a temporary vehicle. If the company owns the vehicle, the company needs to provide liability coverage for its risk of operating the vehicle on the road.

As a driver, you need liability insurance even if you don’t own a car. Drivers are held responsible regardless of ownership. Entrepreneurs who own a company car and a personal car need both policies.

If you drive your car for business, the company still needs liability insurance to protect against the risk of operating a vehicle on a public road. Tangential issues include:

Pick-up trucks and vans are excluded from business use in many personal automobile policies. Claims will be denied under these conditions.Courts have been “piercing the corporate veil” recently. If the business and individual are judged to be too closely tied financially, corporate limited liability can be lost. Separating business from personal usage avoids IRS problems when allocating deductible expenses.  Keep liability clearly separated. A business issue can destroy your unrelated personal wealth.If employees are transported in your personal car, workers compensation coverage blurs into personal liability. Is driving to lunch business or personal? If another employee drives your car causing you an injury, you are exempt from your liability policy.

Too many scenarios can occur to confuse commercial coverage with personal coverage. If you work for a company as an outside sales representative and drive your own car, use a business use personal policy. If the company owns the car, your personal automobile coverage will provide liability insurance for you personally, but not the company. If you don’t own a vehicle, but drive a company car personally, purchase a non-owners personal policy.

Whichever entity owns the vehicle – titled name – requires liability insurance. Commercial automobile coverage is designed for automobiles, trucks, vans, pick-up trucks, assorted delivery vehicles, even dump trucks. Rating, that is premium generation, considers multiple drivers of mixed experience and more miles driven.

Personal automobile policies do not anticipate non-family operators on a regular basis. Usually, the application asks who will be driving the vehicle regularly. It is not favorable to list several employees.

The cargo transportation industry has its own truckers form. Garages and repair shops carry garage keepers coverage. The insurance industry creates forms and policies that fit the unique needs of different business models.

Beware of the Scam of Fake Auto Accidents

Many think of fraud as a non-violent type of crime. In reality, vehicle insurance scams, including the staged traffic accident, are far from non-violent. Aside from costing honest consumers hundreds to thousands of dollars in added insurance premiums, this steadily growing form of fraud has resulted in countless injuries and deaths to the innocent victims of the scams.  In fact, data from the NICB (National Insurance Crime Bureau) shows that staged traffic accidents have rapidly become a leading source of insurance fraud across the U.S.

How Does It Work?

These criminally staged collisions frequently involve several suspects driving a car. The victim is the driver of another vehicle that’s being targeted by the suspects staging the collision for their own financial gain.

The suspects will most often use one of two techniques:

  1. Swoop and Squat

Two or more suspects drive two different vehicles. They target an unsuspecting vehicle, most often an older model that only contains one victim. This is done so that there will not be any witnesses to the collision. The one or two suspects in the squat vehicle position their car in front of the vehicle driven by the victim. They slow to create a smaller space gap between themselves and their victim. Then, the swoop vehicle suddenly changes lanes to cut in front of the squat, thereby causing the squat vehicle to throw on breaks and stop. As a result, the innocent victim rear-ends the squat. Meanwhile, the swoop vehicle is long gone and the squat vehicle is claiming that an unknown vehicle cut them off and forced them to brake.

  1. The Drive Down or Wave On

In this version, the suspect(s) are stopped at the entrance to a parking lot or an intersection. They wave on or yield the right-of-way to the victim. When the victim proceeds, the suspect intentionally accelerates to collide with the victim.

What Can Drivers Do To Reduce The Risk Of Being A Victim?

* Stay aware of your surroundings, paying close attention to what the vehicles several in front, behind, and beside you are doing and maintaining sufficient room between you and all other vehicles.

* Use caution when making a turn in front of another vehicle, even if they yield the right-of-way.

* Since suspects tend to look for innocent drivers that accidentally cross the center line and then sideswipe them, pay close attention to staying within the lines of a lane.

* After any accident, count the number of passengers and get their personal information. You may find that more people are listed on the insurance claim than actually in the accident.

* Avoid driving when you’re stressed; preoccupied with a cell phone, map, or food; or lethargic. All of these lessen the care at which you drive and your concentration abilities, thereby increasing your vulnerability.

* Have a camera in your vehicle to take photos of the scene, license plates, and the occupants of the other vehicle you have an accident with.

* Always call the police and get a copy of the police report. If the damage to the other car is minor, then ask the officer to specify this on the report, as this will make it more difficult for the other party to create more damage for a larger claim.

* Alert the authorities if you feel the accident was staged.

In closing, these staged traffic accidents often have criminal elements that reach far beyond just the suspected drivers. It’s often a criminal collaboration between unscrupulous doctors and attorneys that willingly and knowingly assist in the fraudulent insurance claim process.

State Minimum Auto Liability Coverage is Inadequate

Sure, you’re a responsible driver. But is your state-minimum, bare bones auto insurance coverage really sufficient to cover your risks?

Yes, every state imposes a minimum on liability insurance coverage. This coverage not only protects you against having creditors forcibly seize your assets and land you in bankruptcy court; it also helps protect others around you, by ensuring that no matter what their medical issue or damages, there is enough liquidity on the table to make sure they are economically protected.

But state minimums aren’t designed for most individuals, especially the affluent and do not provide them with the real protection they need. State legislatures must set liability minimums low enough so that insurance coverage is affordable even for poor families – so at least they’ll get something rather than drive completely uninsured. State minimums are not designed to provide really adequate protection for drivers who have assets or make a decent income and are those who are targets for legal action.

The Owner is At Risk

Remember, even if you lent your car to someone else for the weekend – if he or she crashes it, and causes damage, it’s you, as the car owner, who is ultimately responsible. Owners are first in line, ahead of drivers, when plaintiffs’ lawyers start looking to collect on damages not covered by auto insurance.

How Big Can Judgments Be?

Judgments for damages in auto accidents are very frequently $50,000 and over and can range into the millions. We looked at actual judgments obtained by just one small law firm in Las Vegas, Nevada, and found instances like these:

  • $200,000 in liability for just one accident involving a motorcycle.
  • $265,000 for a T-bone auto accident.
  • $300,000 for a leg injury to a pedestrian.
  • $750,000 for a rear end accident with injury.
  • $2,000,000 for another rear-end accident with serious injury.
  • 2,900,000 for a wrongful death claim.

Your state-mandated minimum of $15,000 to $100,000 per accident should cover most fenderbenders, but it is woefully inadequate for the real risk. If you are sued, and the plaintiff wins, you will be held responsible for the whole judgment over the amount of your coverage.

Asset Protection

If someone involved in an accident sues you and wins, he will receive a payment from your insurance company, up to the limit of coverage.  When the payment is inadequate, they may take additional action. They may sue to seize your personal assets – your bank account, your vehicles, property, business and even your home in some jurisdictions. They may also file to garnish your wages. The fallout could easily force you into bankruptcy – and severely disrupt your life.

If you have any kind of hard-earned assets that are at risk of creditor action, you may want to consider buying extra liability coverage. The more assets you have, the more likely you are to be targeted. After all, plaintiffs’ lawyers know that judgments are easier to collect from the affluent than the poor. But even middle class people have a lot to lose by carrying inadequate liability insurance coverage.

Liability Insurance

You may consider two kinds of insurance: additional liability insurance for your car, over and above the state-mandated minimum, and umbrella coverage, which helps protect your assets against losses from a wider variety of sources. This can be especially important for parents of teenagers who are risky drivers and who may drive someone else’s car, or have a party at the house while you and other adults are out of town. When a youngster leaves the party at your house after drinking, and has a wreck, you could be held liable.

To assess your exposure, sit down with a licensed insurance professional, your attorney, or both. It’s easy to tailor a remarkably affordable plan to provide more realistic protection against the actual risks of liability – but you have to do it before the accident.

Pay Attention – Driving Distracted Could Be Your Demise

At one point in time a vehicle was a means to take us from point ‘a’ to point ‘b.’ Nowadays we not only travel in our vehicles, we eat meals in them, conduct business in them, read in them, watch TV in them, listen to cds and, of course, talk on the phone.     Cars are being equipped with more and more gadgets to seemingly make our life easier.  In the midst of this progress, we neglect to realize that easier isn’t always better, or, as in the case of driving while distracted, safer.  While perfecting the ‘skill’ of multi-tasking we sometimes forget that our vehicle is potentially a lethal weapon.

As with many common tasks for most of us driving a car is second nature.  Because of this most people feel that it is safe to perform various tasks while driving.  Accident statistics tell us otherwise.   We know from research that just thinking about things other than the road ahead has the same effect as removing your eyes from the road.  When you actually take your eyes off the road to perform a task, the distance you travel is longer than you would think, especially when traveling at a high speed.  It is usually far enough to hit someone or something that is suddenly placed in front of you.  When you look away from the road you are merely speculating that nothing in your path will change until you resume the task of driving.  When you do this you are gambling with your life and the lives of others.

The Network of Employers for Traffic Safety estimates that, nationwide, somewhere between 4,000 to 8,000 crashes daily happen as the result of distracted drivers.  A National Highway Traffic Safety Association (NHTSA) survey revealed that 60% of cell phone usage takes place behind the wheel. 

While we may understand the risks we also know that our lives do not suddenly slow down because we want them to.  So what do we do?  Take steps to make our traveling safer and also take a minute to realize that the time to accomplish 10 different tasks isn’t when we are behind the wheel.

Some steps toward a safer commute include:


  • Use a hands free device when making calls and dial the number when the vehicle is stationary.
  • Do not answer phone calls during hazardous driving situations.
  • Be familiar with the controls on your car’s stereo system so that you can make adjustments with considerable ease.
  • Pull over to conduct business or finish challenging discussions.
  • Never attempt to look for lost items or retrieve an item off the floor while driving.
  • Be familiar with and adjust vehicle controls before starting out on a trip. 
  • Avoid eating, drinking and smoking while driving.


The life you save may not only be your own.  Saving time is not nearly as important as staying alive. 

Safety Is the Watch Word When You Choose a New Car

There it is, that shiny new car you’ve had your eye on for the longest time. It finally has a sticker price you can afford, so what’s stopping you from buying it?  Before you sign on the dotted line, make sure your dream car isn’t destined to become a death trap for you and your family.

What safety features should you be looking for when shopping for a new auto? Start with these features:

Air bags.   Front air bags are standard on all new vehicles. Crash sensors connected to a computer react to a collision by triggering the bags. They inflate instantaneously and deflate immediately after the crash.

Antilock brakes.  Prevents wheels from locking up during hard braking, especially on slippery roads. By preventing lock-up, the driver maintains control while braking.

Brake assist.   Senses the speed or force with which the brake pedal is depressed. This allows the computer to decide if the driver is trying to make an emergency stop. If so, it boosts brake pressure.

Traction control.  Limits wheel spin when you accelerate so that the drive wheels have maximum traction. Some traction-control systems only operate at low speeds, while others work regardless of speed.

Safety-belt features.  Adjustable upper anchors for the shoulder belts keep the belt across the chest instead of the neck to prevent neck injuries. Seatbelt pretensioners instantly retract the belts during a frontal impact to keep occupants in the best position for an opening airbag. Force limiters control the force that the shoulder belt builds up on the occupant’s chest.

Lower Anchors and Tethers for Children (LATCH).  Built-in lower anchors and tether attachment points for compatible child safety seats to be installed without using the vehicle’s safety-belt system.  Required on all new vehicles.

Electronic stability control (ESC).  Keeps the vehicle on course during a turn, to avoid sliding or skidding.

Tire pressure monitor.   Government regulations will eventually require all new vehicles to have a low tire pressure warning system.

Telematics.  By pressing a button the driver can communicate with a central dispatch center, which can track the location of the vehicle on a computer monitor to provide directions or emergency assistance.

Because safety is such a concern, the Insurance Institute for Highway Safety announced a new category for evaluating new cars, the Top Safety Pick. The award is based on the performance of vehicles in a range of crash tests.

Gold award winners included the Ford Five Hundred, the Mercury Montego with optional side air bags; the Saab 9-3; the Subaru Legacy; and the Honda Civic four-door. These cars earned high scores in frontal offset and side impact tests. They also received high marks in a test that monitors seat and head restraints in rear crashes.

Silver award winners were the Audi A6, Audi A3 and Audi A4; the Chevrolet Malibu with optional side air bags; and the Volkswagen Jetta and Passat. These vehicles received top grades in front and side crash tests, and they ranked second highest in seat and head restraint ratings.

Study Shows SUVs Are Not Safer for Kids

If you have children, you are always on the alert for products that will keep them healthy or safe.  Keeping this in mind, ad agencies for the top automobile makers design their commercials to tout just how safe your children will be on the road while riding in their clients’ cars.  The safety factor has usually been a great gimmick, especially when it came to the SUV.  Well, not any more.

A new study from The Children’s Hospital of Philadelphia states that children riding in SUVs have the same injury risks as children riding in passenger cars.  The study was published in the January 2006 edition of Pediatrics, the journal of the American Academy of Pediatrics.  The researchers concluded that an SUV has a greater chance of rolling over during a crash and that this liability outweighed the safety benefits derived from riding in a larger, heavier-weight vehicle.  The doctors who conducted the study justified the necessity for their research because of the growing popularity of SUVs and their increased use as family vehicles. They added that due to the large size of SUVs, many parents perceived them as safer family vehicles, even though not much is known about child safety in SUVs compared to passenger cars.  The objective of the study was to compare the potential risk of injury to children involved in SUV crashes with children involved in crashes in passenger cars.

This study, which is part of a continuing collaboration between Children’s Hospital and State Farm Insurance Companies, examined State Farm’s crash records involving 3,933 children between the ages of 0 and 15 years, who were riding in either 1998 or newer SUVs or passenger cars.  They found that rollover was a major factor in the risk of injury in both types of vehicles.  They also discovered that rollover occurred twice as frequently in SUVs as in the passenger cars.  Children who experienced rollover crashes were three times more likely to be injured than children who were not involved in a rollover.

The research went on to note that children who were not properly strapped into a car seat, booster seat or wearing a seatbelt during an SUV rollover had 25 times greater risk for injury than children who were appropriately restrained.  Almost 41 percent of all the children who were not appropriately restrained suffered a serious injury.  By comparison, only three percent of appropriately restrained children in SUVs were injured, and less than two percent of appropriately restrained children in passenger cars were hurt.

In a study conducted in 2005, Children’s Hospital discovered that State Farm crashes involving children riding in SUVs increased from 15 percent in 1999 to 26 percent in 2004.  The percentage of crashes involving children riding in passenger cars decreased from 54 percent in 1999 to 43 percent in 2004.

Are You at the Insurer’s Mercy If You Total Your Car?

You treat your car like you would a child. You take care of it inside and out and no one could ever tell it recently celebrated its tenth birthday. Over those ten years, you and your auto have had some great times together, but now the unthinkable has happened and your car has been “totaled.” Does that mean that the two of you have to say good-bye?

Totaling your car means that you have wrecked it badly, so much so that it is up to your insurer to decide if it is worth fixing. The insurer’s decision is based on the car’s worth. Minor damage to a very old auto could result in your carrier deciding to total it, while major damage to a brand new one might not. Auto insurance claims adjusters typically determine a car’s cash value through their company’s proprietary database of prices.

The decision to total a car varies with insurers. Some companies will total a vehicle if after the accident it is only worth 51 percent of its cash value. Others will decide to total the car at 80 percent. The insurance company pays you the car’s actual cash value less any deductible and your car is sent to a salvage yard to be auctioned off. The end result is usually an auction bidder buying the car for parts. The insurance company keeps the auction money, which offsets any costs over the amount they have collected in premiums.

If you feel your car has been unjustly condemned to salvage, do you have any way to protest the decision? You do have some rights, but they are limited. You enter into a contract with your insurance company when you buy car insurance. That contract states that you can’t coerce your insurer to pay out more than your car is actually worth. However, your carrier is obliged to ensure that you are “made whole.” That means the company is required to put you in the same condition you were in before the accident happened.

If your car has been wrecked but you want to have it repaired, you should be able to do so. Tell your claims adjuster right away that you want to keep the car. Keep in mind that you will have to pay for the repairs yourself, but your insurer still has to pay you the car’s actual cash value, less the deductible and less whatever the car would have brought at auction.

Before you decide what to do with the car, think it through. If you give up your car but later change your mind, it will be difficult to buy it back when auctioned. In most cases you cannot attend the auction without an auto salvage or auto dealer’s license. Newer model cars bring higher prices at auctions because their parts are highly desirable. That amount is probably more that what the company paid for your claim, so don’t be surprised if your carrier decides to send it to salvage in spite of your objections.

Remember, if you keep the car and it is seriously damaged, you will only have a small part of the money needed to repair it. If it isn’t repairable, you will be left with having to dispose of the vehicle.

If you go ahead with repairs, be sure the car is completely repaired. When the insurer deemed your car to be totaled, your state’s department of motor vehicles (DMV) was notified. That’s because your policy expired with the loss of the vehicle. Insurers can refuse to completely underwrite a car that’s been totaled and repaired if the vehicle doesn’t pass a DMV inspection. As long as it passes, however, you should have no problem buying liability insurance, although buying comprehensive and collision insurance may be more difficult. Keep in mind, some insurers won’t provide this type of coverage for a previously totaled car.

Everything You Always Wanted to Know About Auto Theft

If you’re like most people, you believe you’re pretty well versed when it comes to protecting your car from thieves.  If that were the case, the FBI’s National Crime Information Center wouldn’t be reporting these chilling statistics:


  • Every 27 seconds, a motor vehicle is stolen in the United States.
  • The odds of a vehicle being stolen were 1 in 196 in 2000.
  • The odds are highest in urban areas.
  • Only 14.1 percent of thefts resulted in arrests during 2000.
  • The FBI’s 2002 Uniform Crime Report, released October 27, 2003, indicates there were more than 1.2 million motor vehicle thefts in the United States in 2002 with an estimated value of approximately $8.4 billion dollars.
  • Only 65 percent of stolen vehicles were recovered in 2002.


These statistics paint a serious picture that reminds us not to take our vehicles for granted.    Many times we forget basic prevention techniques that can put our cars in jeopardy.

For example, when you leave your car, never leave the motor running – even if you think you will only be gone a couple of minutes.  Those few minutes are all it takes for a would-be car thief to easily drive away in a new vehicle.

When you park your car, be sure to roll up the windows and lock the doors.  There are no exceptions to this rule, even if you park in your own driveway.  It’s not uncommon for thieves to try a door handle of a car in driveway because they assume that it was probably left unlocked.  If you have a garage, park your car in it and lock the garage door, even if you intend to use the car later on.  It may seem like a lot of trouble if you are planning to leave the house again soon, but it’s better than going to the garage only to find your car missing.

When you park at your destination, turn your wheels sharply toward the curb.  This makes it very difficult for thieves to tow the vehicle.  Always put on your emergency brake and leave the transmission either in park or in gear.  If a valet parks your car, only leave the ignition key with the attendant.  It goes with out saying that if you park at night, park in busy, well-lit areas.

Think about equipping your car with various anti-theft devices.  Ask about car insurance discounts for anti-theft devices such as alarms, window etchings, and anti-hot-wiring devices.

Finally, when you buy car stereo equipment, be sure to choose items that can be removed
and locked in the trunk.  Nothing is more tempting to a car thief than to see if he can make that expensive audio equipment his own.

Where’s the Insurance? Beware of Uninsured Drivers

About twenty years ago, a famous hamburger chain ran a series of commercials featuring a cute octogenarian named Clara Peller.  This feisty little old lady claimed her fifteen minutes of fame asking that now famous question, “Where’s the beef?”  While it may have been funny to watch her put fast food restaurant owners on the spot, it is not at all funny if you’re in a car accident and you ask the other driver for their insurance card only to find out they have none.

Unfortunately that’s a scenario that happens all too frequently.  As the cost of living rises and paychecks don’t meet needs, people start making decisions about where to cut expenses.  One of those decisions may be to eliminate or greatly reduce the amount of their car insurance.  They need the car and take the calculated risk that they won’t get into an accident, but invariably, they are wrong.  In fact, the possibility of an uninsured motorist hitting you is greater than you may realize.  There are some states in which almost 32 percent of all drivers do not carry automobile insurance.  The national average is 14 percent.

You can protect yourself from an uninsured driver, or even an underinsured driver, whose negligence causes you to be involved in an accident. The first way is with uninsured motorists (UM) coverage.  It provides insurance protection for bodily injury, and in some states, property damage, caused by an uninsured driver.  This type of policy permits you to collect from your own insurance carrier just as if it provided liability coverage for the uninsured driver.

Uninsured motorist bodily injury coverage pays for your medical expenses, lost wages, and other damages when you or your passengers are injured in an accident caused by a driver without car insurance.  Uninsured motorist coverage also pays for injuries that result from a hit-and-run accident.  Policy owners choose the coverage limit when they buy their policy.

Uninsured motorist property damage coverage protects you if your vehicle is damaged in an accident caused by a driver without car insurance.  Other protection provided by this type of policy varies from state to state.  If available, the deductible for uninsured motorist property damage is usually $250.  This is often substantially less than the collision coverage deductible found in your auto insurance policy.

The other policy alternative is underinsured motorists (UIM) coverage.  This provides insurance protection for bodily injury, and in some states, property damage, caused by a negligent motorist who is not sufficiently insured and whose negligence results in an accident.  The bodily injury portion of this kind of coverage pays for your medical expenses, lost wages, and other damages when you or your passengers are injured.  It usually pays the difference between the coverage limit you select and the other driver’s bodily injury coverage limit.

Underinsured motorist property damage coverage protects you if your car is damaged in an accident caused by a driver with insufficient auto insurance coverage.  Other specific protection provided by this type of coverage varies by state.  As with bodily injury, property damage coverage pays the difference between your policy’s coverage limit and the other driver’s property damage coverage limit.

When you are deciding whether or not to buy either of these coverages, keep two very important points in mind.  Both UM and UIM coverage are broad in scope because they provide benefits for you and your family members’ injuries that occur in your own covered car, in cars you don’t own, and as pedestrians.  Despite all of this protection, the cost for this coverage is reasonable compared to liability coverage and physical damage coverage for your own car.

Teenage Drivers Are a Threat to Everyone

Teenagers and fast cars are a Hollywood legacy that dates back to James Dean. The “Rebel Without A Cause” and his Porsche 550 Spyder were the ultimate symbols of teenage rebellion during the 50s. Despite all the Hollywood hype surrounding a teen’s need for speed, the problem with teenage reckless driving has serious consequences that reverberate beyond the drivers themselves.

According to the Insurance Institute for Highway Safety’s report Fatality Facts: Teenagers 2003, the risk of motor vehicle crashes is higher among 16- to 19-year-olds than any other age group. In fact, per mile driven, teenage drivers are four times more likely than older drivers to crash.

As if those statistics weren’t bad enough, the Automobile Club of America (AAA) Foundation for Traffic Safety published a study that shows the majority of people killed in teenage driver crashes are people other than the teens themselves. The Foundation study analyzed data from the National Highway Traffic Safety Administration’s Fatality Analysis Reporting System (FARS) from 1995 through 2004.

The research data indicates that young drivers represent a little more than one-third of all fatalities caused by crashes in which they were involved. However, almost two-thirds of those killed in crashes are other vehicle occupants and pedestrians.  Between 1995-2004, crashes involving 15-, 16- and 17-year-old drivers took the lives of 567 people in Minnesota, of which 212 or 37.4 percent were the teen drivers themselves. The remaining 355 or 62.6 percent included 171 passengers in the cars driven by 15- to 17-year-old drivers, 155 occupants of other vehicles, and 29 non-motorists. The AAA of Minnesota is using this data in their lobbying efforts to beef up state driving laws.

As a result of their findings, the AAA is suggesting a two-pronged approach to solving the problem. The first is a graduated licensing law (GDL). Graduated licensing requires that a new driver be given driving privileges in three stages: a learner’s permit, a probationary license and finally full driving privileges.

The AAA made it their goal in 1997 to pass GDL laws in all 50 states and the District of Columbia. This goal was finally achieved when Wyoming and Montana enacted laws in 2005. The legislation requires teens to obtain more supervised behind-the-wheel driving experience as well as phased-in driving privileges. However, not every state’s GDL laws are as comprehensive as they should be.

The second part of their approach involves educating parents. Parents are encouraged to prevent their teenagers from riding with other teen drivers, or transporting other teens during the first year of driving.  To help parents overcome any awkwardness about enforcing these rules, especially if other parents may not be following the same track, the AAA has designed a new parent discussion guide. It encourages parents to work as a team to ensure their teens gain driving experience in the safest driving environment possible during that first year. For more information, log on to