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Auto Insurance Jargon Buster

Your guide to understanding the fine print
Don’t be intimidated by specialized insurance language. Below you’ll find definitions of some of the most common terms used when dealing with auto insurance.

Adjuster

An insurance company employee or contractor who reviews the damages and injuries caused by an accident and okays claims payments.

Bodily injury liability

Usually mandated by state law, this insurance provision covers costs associated with injuries and death that you or another driver causes while driving your car.

Claim

The formal request to an insurer for payment under the terms of your policy.

Collision coverage

Optional coverage that reimburses you for damage to your car that occurs as a result of a collision with another vehicle or other object—e.g., a tree or guardrail—when you’re at fault. While collision coverage will not reimburse you for mechanical failure or normal wear-and-tear on your car, it will cover damage from potholes or from rolling your car.

Comprehensive coverage

Coverage against theft and damage caused by an incident other than a collision, such as fire, vandalism, hail, flood, falling rocks and other events.

Credit-based insurance score

A confidential ranking developed by insurance companies based on your credit history that may be used to determine the cost of your insurance policy. A good credit score—an indication of responsible money management—has been shown to be a good predictor of whether someone is more likely to file an insurance claim.

Deductible

The amount subtracted from an insurance payout that you are responsible for. For instance, if you have a $500 deductible for your collision coverage, and an accident causes $2,000 of damage to your car, you pay $500 and your insurance covers the remaining $1,500. There is no deductible for your liability coverage.

Defensive driving

Driving in a way that reduces that chance of an accident. Defensive driving techniques include maintaining a safe following distance, scanning the road ahead, keeping both hands on the wheel and much more. If you take a defensive driving course, you may be able to get a discount on your auto insurance.

Diminished value

The value of a car after it has been in an accident and repaired. Even though the car may look fine, it is worth less than its value before the accident. If you’re the victim of an accident, you may be able to collect payment for the diminished value of your car, beyond the repair costs.

Distracted driving

Driving your car while distracted is dangerous and often illegal. Texting and using your phone are the most well-known distractions, but fiddling with your radio, looking at a map or GPS system, eating and drinking, talking to passengers and applying makeup also take your eyes off the road—and raise the risk of getting in an accident. Traffic tickets for texting or using your phone, as well as accidents caused by distracted driving, can drive up your insurance rates.

Gap insurance

As soon as you drive a new car off the dealer’s lot, its value begins to depreciate. And if you lease or finance the car, you’ll be responsible for the full amount you still owe should something happen to it, but your collision and comprehensive insurance will only cover the actual market value of the car. Gap insurance covers the difference between these two amounts—what the vehicle is worth and what you owe on it. The coverage can be purchased from the auto dealer or directly from your insurance company. For leased vehicles, gap insurance is usually rolled into the lease payments.

Liability

Your legal obligation to reimburse others for damage or injury that you cause. Nearly every state requires that you have liability insurance for your car so that if you or someone driving your car causes an accident, the victim will receive appropriate compensation.

Medical payments/Personal injury protection (PIP)

Coverage that provides reimbursement for medical expenses for injuries to you or your passengers stemming from an accident where you or someone using your car is at fault. This coverage may also pay lost wages and other related expenses.

OEM and generic auto crash parts

Crash parts are those that form the outside “skin” of a vehicle—such as fenders, hoods and doors panels—and are the most frequently damaged in auto accidents. Replacement parts provided by the manufacturer of your car are called original equipment manufacturer (OEM) parts. Parts that are made by another manufacturer are known as generic or aftermarket crash parts and are generally a lower cost, equally safe match for an OEM auto part.

Premium

The cost of your insurance policy, payable annually, semiannually or in monthly installments.

Property damage liability

Insurance coverage that reimburses others for damage that you or another driver operating your car causes to another vehicle or other property, such as a fence, building or utility pole.

Totaled

A car is totaled if the cost of repairs exceeds the car’s value. If your car is totaled and you have comprehensive and/or collision coverage, an insurer will pay you the full market value of your car or the limit of the policy, less your deductible if you are at fault.

Umbrella liability

Extra coverage beyond the limits of your regular liability policies. This will provide an additional layer of protection for your assets in the event you are sued. Your umbrella policy also covers claims that fall under your homeowners insurance policy.

Uninsured/underinsured motorist coverage

Uninsured motorist coverage will reimburse you when an accident is caused by a driver who lacks insurance—or in the case of a hit-and-run. In the case of a serious accident, underinsured motorist coverage will make up the difference between your losses and the coverage limit of the policy held by the driver who causes the accident.

©InsuranceInformationInstitute
Source: https://www.iii.org/article/auto-insurance-jargon-buster

7 ways to improve your finances during Financial Literacy Month

April is tax season, so a lot of people are thinking about their finances these days. But if you’re like most people, you’re probably thinking in the short term: What’s my refund going to be—or how much do I owe? And what is that going to do to my monthly budget?

It’s good to be thinking about those things. It’s also important to look at the bigger picture. Financial Literacy Month, which is also in April, gives you the perfect chance to do just that. Surveys have showed that an alarming number of Americans lack even basic financial knowledge; in an era when we collectively have trillions of dollars in consumer debt, and many people live paycheck to paycheck, that can be a recipe for disaster. But it doesn’t have to be that way! This Financial Literacy Month website, created by nonprofit credit-counseling firm Money Management International, features tools and resources to help you understand your finances better and build a bright financial future. In that spirit, we’ve come up with seven tips that can help you become more savvy with your money. Some are easy things you can do today. Others might take a little more work. But all are worth the effort!

1. Make your saving automatic. It’s important to have money set aside for emergencies—and to save for retirement. But once your paycheck hits your account, it can be a lot easier to just spend it all. The solution? Schedule automatic transfers to a separate account for your emergency fund, your retirement plan, or both. Start with something like 10%. You might even find that you don’t miss it.

2. Pay your credit cards off every month. If you can’t do this now, pay them down until you can. One popular way is the “snowball” method, which in a nutshell, works like this: Make only the minimum payment on all of your debts—except the smallest one. Put as much money as you can toward that. When the smallest debt is paid off, repeat the process and continue until everything is paid!

3. Check your tax withholding. People love getting big tax refunds, but that really means you’ve loaned the government your money over the course of the year—interest-free. For example, instead of a $2,500 refund in April or May, you could have more than $200 extra in your paycheck every single month. Wouldn’t that be nice?

4. Don’t throw away free money. Who would do that? Well, you—if your employer offers a match on your retirement savings and you don’t contribute enough to get the full amount. Say your company matches the first 3% of salary you contribute to a 401(k); you should save as much as you can, but at the very least, you’d want to save that 3%.

5. Pay less for services. Are you paying more than you should for cable, internet or your mobile service? Maybe not—but you won’t know unless you ask. Often, companies have discounts or special packages available, especially if you’re a loyal customer and you haven’t been on a promotional deal for a while.

6. Consider a credit card that rewards you. This can be a great way to earn points toward free travel or other rewards, just for buying the things you would buy anyway. Don’t spend more than you normally would just to get rewards, though. And remember, if you regularly carry a balance, the rewards probably won’t outweigh the interest you’re paying. (Go back to item #2 in our list.)

7. Track your spending for a while—and then review it. You probably spend money on a lot of little things without realizing how much it adds up. Maybe you get takeout for lunch a couple of times a week, or stop for coffee every day on your way to work. Try tracking everything you spend for a month or two. Then, take a look at your habits.

You’ll find areas where you can save, likely without even feeling like you’re making a sacrifice. Insurance is an important tool for your financial well-being, too. Even though it’s easy to think of insuring your car or home as protecting your “stuff,” insurance really protects your finances. After all, insurance can’t prevent your car from being hit by another driver—but it can pay for the repairs, so that money doesn’t come from your pocket.

Take a little time to think about your finances this month, and try one or more of the tips above. As with many things in life, when it comes to money, small steps can have a big impact!

©Safeco
Source: https://www.safeco.com/blog/financial-literacy

WHAT TO DO IF YOU’RE IN AN ACCIDENT

We spend a lot of time in our cars, with the average American driver covering over a 1,000 miles a month. That is a lot of driving! With all those miles traveled you may find yourself in the unwanted situation of a car accident at some point in your life.
Read the tips below to learn what you should do if you’re involved in a car accident:
• Stay calm
– Keeping a normal demeanor helps you stay in control of the situation.
• Make sure you and your passengers are OK
– Move as far off the roadway as possible, but stay at the scene of the accident. Warn oncoming traffic by activating your hazard warning lights and/or setting flares.
• Call the police
– Call 911 or the appropriate emergency number to report the accident.
• Contact your insurance company and report the claim
– The sooner your insurance company knows about the accident, the sooner they can start working to resolve your claim.
• Do not admit fault
– Do not discuss the car accident with anyone other than the police and your claims representative.
• Exchange vital information with the other driver involved in the car accident
– Write down the name, address, phone number and license numbers for all drivers and witnesses, particularly those who were not riding in a vehicle involved in the accident. Ask for the insurance companies and policy numbers for drivers involved in the car accident.

source: Progressive

When – and Why – You May Need Umbrella Insurance ⛱

Here are a few cases when an umbrella policy is essential:

• Passenger Injuries
Driving around with friends, it can be easy to get distracted and go a little too fast. If an accident occurs and passengers are seriously injured, medical expenses can add up quickly – potentially totaling more than what an auto policy would cover. Without an umbrella policy, any liability expenses beyond the auto policy limits may be the driver’s responsibility.

• Dog Bites the Neighbor
Responsible dog owners take the time to train and socialize their pets. However, even breeds that aren’t typically associated with aggressive behavior can suddenly act out, despite our best efforts. If a pet badly injures a neighbor, the cost can go into the millions between medical bills and future disability.

• Faulty Furnace
Being a landlord is tricky business. Even with the most responsible management, rental properties can be a minefield of possible claims. If a furnace starts malfunctioning, a tenant may sue for brain damage caused by carbon monoxide poisoning. While all landlords should maintain their property and make repairs as needed, having a safety net in case of a major liability claim is equally important.

source: SafecoInsurance

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THE BEST TIMES TO EVALUATE YOUR CAR INSURANCE 🚗

It’s good practice to reevaluate your car insurance coverage once or twice a year, because many life changes can adjust your premium payments. The rate you pay for car insurance isn’t set in stone because it’s based on so many factors that can change over time.

Here are the best times to evaluate your car insurance and see if you’re getting the best deal for your needs:

• When you buy a new car
-You have a grace period of about seven to 30 days (depending on your insurance policy) to inform your insurance provider that you bought a new car, but you can also shop for policies before you buy. You must get a policy on your new car by the time your grace period ends, or you risk driving without insurance.

• When your family situation changes
-Changes to your family mean changes to who is on your insurance policy. If you get married, this can affect your insurance rates (generally being married lowers rates). Adding your spouse to your policy can increase or decrease your payments, depending on their driving record. Even if your spouse doesn’t own a car and rarely drives, it might be worth it to add them to your policy to lower your rates.

• When your premiums go up
-If your premiums increase and there have been no changes to your driving record, it’s worth checking to see if you’re getting the best coverage for your money. This might be time to compare your current insurance provider with others to see if you can find a competitive rate.

source: SafecoInsurance

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☎ Call us now: 505-807-AUTO(2886)
📩 Email: admin@swfins.com

YOU JUST BOUGHT A NEW CAR. WHAT ABOUT INSURANCE?

We admit that buying insurance for your new car isn’t quite as exciting as buying the car itself, but it just might be your most important purchase. Why? Well, first of all, it’s usually required either by your state, your lender, or both. More important, however, is the financial protection auto insurance provides.

Auto insurance coverage options.
• The type and amount of insurance everyone needs is unique. You most likely know about collision coverage, which pays for damage when you cause a collision with another vehicle or an object, and comprehensive coverage, which pays for repairs when your car is damaged by something you can’t control, like a fallen tree.

Other coverage options aren’t as well-known, but can be crucial when it comes to protecting both your car and yourself.

You should buy as much personal liability (PL) and uninsured motorist (UM) coverage as you can, because both can protect you from having to pay large out-of-pocket repair and medical bills. And once you have basic liability coverage, increasing your limits won’t cost you much more at all.

Don’t skimp on property damage (PD) coverage, either. It’s expensive to replace a new vehicle, and if you are at fault in a crash, not having enough insurance can expose you to unnecessary financial risks.

source: SafecoInsurance

Do Teenage Drivers Increase Car Insurance Rates? 🔞

In most cases, yes. After all, you’re extending your coverage to another driver, and that typically costs more. And, not just any driver, but an inexperienced one.

The direct impact on your car insurance rates can vary depending on the state where you live. That said, most states allow insurance companies to utilize the following factors in pricing coverage for a young driver:

• Male or Female: Premiums are often driven by statistics. Unfortunately, this does not bode well for young male drivers. According to the Centers for Disease Control and Prevention (CDC), in 2013 the motor vehicle death rate for drivers and passengers ages 16 to 19 was almost twice as high for males vs. females.

• Primary Driver: If your teen has her own vehicle, she will likely drive it more often than if she were sharing it. More time behind the wheel can mean higher rates, as your teen has gone from an occasional operator with limited use to a primary operator.

• Type of vehicle: The make and model of a vehicle always impacts your car insurance costs. If it’s a high-end vehicle, you can expect to pay more, particularly for an inexperienced driver. Always check how much a vehicle will cost to insure for a teen driver before you plunk down the cash for it.

source: SafecoInsurance

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10 Reasons to Contact Your Auto Insurance Agent

1. File a Claim

•After an accident, it can be stressful filing a claim. The easiest solution is to contact your auto insurance agent and ask him to file the claim for you.

2. Trouble with Your Claim

•If your claim isn’t going smoothly, your auto insurance agent is a great source to get things straightened out.

3. Add or Remove a Driver

•If you are looking to change drivers, you should call your auto insurance agent. Lots of reasons exist to change the number of drivers on your policy.

4. Add or Remove a Vehicle

•Taking vehicles on and off is a common occurrence on auto policies. It is a good idea to call and get a quote from your auto insurance agent to see what the price will be when adding a vehicle.

5. Moving

•Always notify your agent of a move. It is important your insurance company can contact you through both mail and phone.

6. Questions about Payment

•Billing questions are extremely common. Changes to your policy, renewals, and late fees can all affect your payment and raise questions.

7. Change Coverage

•Sometimes you just need to change the coverage on your existing vehicle. Maybe you are putting your sports car in storage for the winter.

8. Inquire about Cheaper Insurance

•The only stupid question is the one you do not ask. Asking your agent to review your policy is a great way to potentially save some cash.

9. Adding more Policies to Get Multi-Policy Discount

•Always call your auto insurance agent if you are purchasing a home and need home insurance.

10. Sponsorship for Kids

•Insurance agents are members of the community. Many like to sponsor local kids and especially support the kids of their clients.

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Weather safety

Hurricanes, hail, tornadoes, flooding — these and other extreme weather conditions can threaten your driving safety and damage your car. Learn how to prepare for hazardous weather and help minimize the damage to your vehicle using our weather driving safety tips.

Weather driving safety tips

Driving safety practices can protect you, your passengers and your vehicle. We give you the facts about safety equipment, and we keep you informed about the most important driving safety tips, including how to handle natural disasters and weather emergencies, how to keep your family safe when you’re on the road, and more. Another way to stay protected is by routinely checking your car insurance policy to make sure you have the coverage you need.

Weather driving safety tips include:

Driving during an earthquake

Our driving safety tips can help you stay calm and put yourself in the best position possible during an earthquake.

Flood safety

Flash floods are the number one weather-related killer in the United States. Most flood fatalities happen because people try to drive through deadly waters rather than avoid them.

Driving in a hailstorm

When in a hailstorm, you can follow specific driving safety tips, including staying inside the vehicle, pulling off the road to a safe place, keeping your car angled, and more.

Hurricane safety

Hurricanes can spawn tornadoes, landslides and floods, so if you’re in a hurricane’s path, you should take extra precautions to ensure a safe evacuation and return to the area. Our weather driving tips can help.

source: https://www.progressive.com/lifelanes/on-the-road/weather-safety/?fbclid=IwAR0TPVHTp2_sArJ13gYzc7IguL95YUBrcyM3o-qc3eaUa9h-lrkgP8vLEj8

Now that you’ve got some ideas on how to save on your car insurance, you may want to check with your carrier to review your coverage. You can get a quote from Southwest Federal Insurance.

Staying sane during traffic

When I’m stuck in traffic, my mind often wanders to this beloved scene from the 1999 hit, “Office Space.” The dull, all-over pain of having places to go and things to do and being met with nothing but brake lights and bumper stickers.

We mostly think of our cars as aluminum portals to take us from point A to point B. But what if we think of our cars as a sanctuary from the stress of our daily lives? A temple of total you-time where you can tune out and plug into the present moment. With some wisdom from cool-headed commuters, we gathered a few tips and tricks to turn your wheels into your zenmobile.

Engage your brain

Keeping your mind occupied with stimulating, educational content can significantly ease your suffering. Downloading podcasts, audiobooks or tuning into talk radio is a great way to stick it to the traffic man.

Re-route

Many technologies exist now to help drivers avoid high-traffic areas. Use an app like Waze (a community-based traffic app) to find out about real-time road issues. Because sometimes it’s all about outsmarting the streets.

Roll down the windows

When your body is all wound up from stress, it’s prime time to do some deep breathing exercises. Fresh air can help release some of that tension by flooding oxygen to your body and brain.

Make a pit stop

If all else fails and traffic is just unbearable, find a stop along the way that gives you a break from all the braking. The park or the mall can serve as the intermission you need to get home safely and sanely.

Car Karaoke

An in-car concert is a fast, fun and easy way to turn your mood right around. Whether it’s turning on the radio or tuning into your ‘favorites’ playlist – let the music move you into your happy place.

source: https://www.progressive.com/lifelanes/on-the-road/stay-sane-in-traffic/?fbclid=IwAR1XAoqtH6dq-0P0tofyKj3JpGnshwkrDd7gs7entRRl6P0Ga9wlNCvM8dI