MONEY Insurance

The Fastest Way to Shore Up Your Safety Net

Treadmill screen with dollar sign on it
Alamy

You can make sure you have enough life insurance in less time than it takes to make a sandwich

As part of our 10-day series on Total Financial Fitness, we’ve developed six quick workouts, inspired by the popular exercise plan that takes just seven minutes a day. Each will help kick your finances into shape in no time at all. Today: The 7-Minute Insurance Check-Up

You’ll need some financial info for this one. Pull together an overview of your investments, what you owe on your mortgage, the amount of life insurance you currently have, as well as saving and debt numbers.

0:00 Visit lifehappens.org, and select “Start calculating your life insurance needs.”

0:21 The first part asks about the expenses your family will incur if you die. Life-Happens suggests budgeting $15,000 or 4% of your estate. A funeral typically costs about $10,000, so if you won’t leave major debts, $15,000 is fine.

2:30 Next, you’ll calculate the money your family would need if you died today, and how much your spouse might earn. While your clan won’t need to replace 100% of your income, you will want to cover regular expenses.

4:19 Step 4 asks for an estimated inflation rate (pre-populated with 3%) and after-tax net investment yield (pre-populated with 6%). To be more conservative, decrease the yield.

5:00 Now the site will spit out a suggested amount of coverage. This is a good starting point but may miss some details. Say you’d like to cover a portion of your kid’s tuition; the calculator doesn’t allow for partial payment.

5:59 Go to intelliquote.com for instant quotes on term-life policies from a range of insurers. (Don’t be surprised if you get some sales calls.)

Easy, right? Next you’ll want to do an insurance inventory to check the health of all your policies. Not only will you be better protected, you might save some money too.

Previous 7-minute Workouts:

MONEY Baby Boomers

How to Work Less—Without Giving Up Your Career

Briefcase with fishing lures
Zachary Zavislak

It's called "phased retirement," and it's catching on.

The youngest baby boomers have just turned 50, bringing retirement within sight for the entire generation. But many boomers don’t expect to work at full throttle until the last day at the office. More than 40% want to shift gradually from full- to part-time work or take on less stressful jobs before retiring, a recent survey by Transamerica Center for Retirement Studies found.

It’s a concept called phased retirement, and it’s catching on. Last November the federal government okayed a plan to let certain long-tenured workers 55 and up stay on half-time while getting half their pension and full health benefits. Says Sara Rix, an adviser at AARP Public Policy Institute: “The federal government’s program may influence private companies to follow their lead.”

Formal phased-retirement plans remain rare; only 18% of companies offer the option to most or all workers. Informal programs are easier to find—roughly half of employers say they allow older workers to dial back to part-time, Transamerica found. But only 21% of employees agree that those practices are in place. “There’s a big disconnect between what employers believe they are doing and what workers perceive their employers to be doing,” says Transamerica Center president Catherine Collinson.

So you may have to forge your own path if you want to downshift in your career. Here’s how:

Resist Raiding Your Savings

Before you do anything, figure out what scaling back will mean for your eventual full retirement. As a part-timer, your income will drop. Ideally you should avoid dipping into your savings or claiming Social Security early, since both will cut your income later. If you’re eligible for a pension, the formula will heavily weight your final years of pay. So a lower salary may make phased retirement too costly.

Cutting back your retirement saving, though, may hurt less than you think. Say you were earning $100,000 and split that in half from 62 to 66. If you had saved $500,000 by 60, and you delay tapping that stash or claiming Social Security, your total income would be $66,700 a year in retirement, according to T. Rowe Price. That’s only slightly less than the $69,500 you would have had if you kept working full-time and saving the max until 66.

Start at the Office

If your employer has an official phased-retirement program, your job is easier. Assuming you’re eligible, you might be able to work half-time for half your pay and still keep your health insurance.

Then ask colleagues who have made that move what has worked for them and what pitfalls to avoid. Devise a plan with your boss, focusing on how you can solve problems, not create new ones with your absence. Perhaps you can mentor younger workers or share client leads. “Don’t expect to arrange this in one conversation—it will be a negotiation,” says Dallas financial planner Richard Jackson.

Without a formal program, you’ll have to have a conversation about part-time or consulting work. To make your case, spell out how you can offer value at a lower cost than a full-time employee, says Phil Dyer, a financial planner in Towson, Md.

Giving up group health insurance will be less of a financial blow if you are 65 and eligible for Medicare, or have coverage through your spouse. If not, you can shop for a policy on your state’s insurance exchange. “Even if you have to pay health care premiums for a couple of years, you may find it worthwhile to reduce the stress of working full-time,” says Dyer.

Do an Encore Elsewhere

This wind-down could also be a chance to do something completely different. Take advantage of online resources for older job seekers, including Encore.org, RetiredBrains.com, and Retirement-Jobs.com. You can find low-cost training at community colleges, which may offer programs specifically to fill jobs for local employers. Or, if you want nonprofit work, volunteer first. Says Chris Farrell, author of Unretirement, a new book about boomers working in retirement: “It’s a great way to discover what the organization really needs and how your skills might fit in.”

Sign up for a weekly email roundup of top retirement news, insights, and advice from editor-at-large Penelope Wang: money.com/retirewithmoney.

MONEY car insurance

When it Makes Financial Sense to File an Auto Insurance Claim—and When It Doesn’t

When to file a car insurance claim
Guido Mieth—Getty Images

How to tell if the bump in your premiums will exceed the money you'll get back

Getting into a car accident is bad enough—you’re shaken, your vehicle is damaged, and worst of all, you or someone else may be hurt. Adding insult to injury, auto insurers these days are hiking policyholders’ rates sky-high after just one accident, even when a driver has an otherwise impeccable record.

A single claim boosts the premium by an average of 41% nationwide, according to a recent study by InsuranceQuotes.com. And in some states, the jump can be as much as 76%. (Massachusetts, California, and New Jersey are the worst.)

Considering that the average premium is $815, a fender-bender could cost you an additional $334 to $619 per year.

Even simply calling your insurer to discuss your options can have consequences. “As soon as you start talking about something that just happened, it goes on your record—it’s called an inquiry,” says Amy Danise with Insure.com. “If you build up inquiries, even if you never get a dime from a claim, you can still be viewed as high-risk, and that can affect your rates.”

All this means that you’ve got yet another thing to think about after a crash: whether you should file a claim or pay repair costs out of pocket. This road map can help you make at least that part of the situation easier.

When You’ve Had an Accident and Someone Else is Involved

You’re better off claiming, says Laura Adams, senior analyst for InsuranceQuotes.com.

If you’re at fault, and you hit another person or vehicle, he has the right to make a liability claim against you, and he could potentially sue. With insurance, you’re entitled to a legal defense and coverage of a judgment against you up to a certain amount. “The average liability claim is $15,000,” says Adams. “In those cases, it’s hard to conceive of a situation where you wouldn’t want to make that claim.”

Even if the damage seems minor, and you and the other driver agree that you’ll handle everything yourselves, that approach can backfire. “I’ve heard of cases where the other person called later and said, ‘Send me $3,000,’” says Insure.com’s Danise.

And if you wait too long to loop your insurer in—say, after you’re notified that the other driver has filed suit against you—the insurer could deny your claim entirely.

“You’re better off saying, ‘Here’s my insurer, here’s my policy number,’ and handing it off so the insurer can deal with that person,” says Danise.

150218_FF_CarAccident_ClaimPrice

When You’ve Had an Accident and No One Else Is Involved

Let’s say you back into your garage door or hit a guardrail when you skid in the snow. You’re at fault, but the only car affected is yours.

As long as you’re fairly sure there won’t be any lingering medical issues, you’re better off paying out of pocket if you can afford it.

Of course, the more money it costs to fix, the less you can probably afford it—and the more it will raise your rates.

For property damage claims of under $1,000, rates will go up 18% on average, according to numbers from Insure.com. For claims over $1,000, it’s more like 29%.

Not sure? Check out the “When to Make an Insurance Claim” calculator at InsuranceQuotes.com to see how it looks in your state.

When Your Car was Damaged, but Not in an Accident

If a tree limb falls on your hood or your car gets burglarized, that’s not your fault—and insurance companies generally won’t punish you for it.

Even if you file a comprehensive claim of $2,000 or more, you’re looking at an average rate hike of just 2%, or about $18, according to InsuranceQuotes.com. So if the damage goes above your deductible by more than a few hundred dollars, there’s no harm in claiming it.

…And If You File a Claim For Any Reason and See Your Rates Rise as a Result

Ask your insurer for the surcharge schedule—which should tell you how long it will be before your premiums return to normal levels.

Also, remember that not all insurers give accidents the same weight, so you can always shop around for a cheaper policy.

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What Women Can Do to Increase their Retirement Confidence

MONEY Health Care

Why You’re Still Paying for Birth Control Even Though It’s “Free” Now

150211_FF_BirthControl
Laura Johansen—Getty Images

Most women with private health insurance can get contraception for free, but a lack of information means some are still paying out of pocket—even when they shouldn't be.

A record scratch sounded in my head one weeknight this January, when a pharmacist at my local drugstore told me my birth control pills would—for the first time—cost more than $50 a month.

Strange, I thought, since I could have sworn I heard contraception was one of the preventive health services that are free under the Affordable Care Act, and that the law was rapidly expanding access for most women, with at least 67% of insured women on the pill paying $0 (up from only 15% in 2012), according to a recent study by the Guttmacher Institute. Perplexing.

After all, I don’t work for an exempted religious organization or a company such as Hobby Lobby, which in a Supreme Court case last year won the right to deny contraceptive coverage because of conflicting beliefs. And the same pills—Ortho Tri-cyclen Lo—cost me nothing under my old health plan. Sure, I had switched insurance companies in the new year (to Aetna, the third largest in the country), but I’d opted for a high-premium Gold plan. A monthly copay on par with the cost of an iPod shuffle seemed hefty and unfair.

So I left the pharmacy empty handed and went home to call Aetna.

My happiness was brief when a customer service agent informed me that—while most brand-name pills had a copay—I could simply switch to a free generic version of the same compound. The problem? Turns out there is no generic version of Ortho Tri-cyclen Lo yet. So I was trapped, much like women whose insurance companies have denied them coverage for the NuvaRing, reasoning that they can take generic pills with the same hormones—even though the Department of Health and Human Services has been clear that the ring is a distinct form of contraception (and should therefore be free).

I hesitated to simply choose a different generic for a reason that should not surprise the many other women who have tried multiple birth control methods: Switching from pill to pill in the past caused me side effects, which thankfully subsided once I finally found one that worked for me.

“People respond differently to different pills and a change can cause side effects like irregular bleeding and headaches,” says Jill Rabin, an ob-gyn and professor at Hofstra North Shore-LIJ School of Medicine. “There’s no predicting how someone will do unless they try it.”

The pressure I felt to switch seemed especially unjust given this aspect of the law: While women can be charged a copay for brand name drugs when an equivalent generic is available, this Department of Labor FAQ explains, “if, however, a generic version is not available, or would not be medically appropriate for the patient” as determined by her doctor, “then a plan or issuer must provide coverage for the brand name drug … without cost-sharing.”

When I brought my dilemma (and the fact that I was a journalist planning to write about it) to Aetna’s director of communications, Susan Millerick, she took swift action. Within a week, I had my Ortho Tri-cyclen Lo, free of copay.

“It is always Aetna’s intent to abide by the laws that govern our health benefits coverage, and to fairly interpret and apply all laws and regulatory guidance on behalf of our customers and members,” Millerick wrote in an email.

Millerick’s explanation for what had happened suggests any woman would be wise to question any insurer denial for contraceptive; she said Aetna’s “service reps erred” in not telling me about the option to appeal the copay. I should have been told that I could just ask my doctor to call and verify that I really needed my pill and that a different generic would not suffice.

The good news for many women is that simply being informed of your options—and getting your doctor on your side—may be enough to go from paying a wallet-draining copay to nothing at all, says Rabin.

“Figuring out the best contraception that minimizes cost and maximizes efficacy is a conversation that should be between doctor and patient,” Rabin says. “Most doctors don’t want that decision taken out of their hands and would be happy to help make that call for their patients.”

For those women who encounter more resistance than I did—or find, as Kaiser Health News reported, that certain insurers are even trying to wriggle out of covering generics—there are other resources to turn to, like the National Women’s Law Center. Their website has clear instructions on how to fight back if you think your insurer is unfairly denying you free birth control, with templates for appeal letters and a free hotline (866-745-5487) for additional assistance.

Even with all the progress, thousands of women have been contacting the NWLC’s hotline in recent months after running into problems getting free contraceptives, says Mara Gandal-Powers, a lawyer at the NWLC.

Generally, the biggest obstacle to free birth control access right now is ignorance, she says. Many women—and their insurance representatives, doctors, and pharmacists—aren’t on the same page about whether their particular contraception should have a copay or not. Instead of doing a double take at the cost of their contraceptives, Gandal-Powers says, some women never question the charge.

That’s a compelling reason to double check your insurer, pharmacist, and even doctor’s assumptions.

“There is definitely a lot of education that still needs to happen,” says Gandal-Powers, “not just among women themselves but also among health care providers and pharmacists.”

Beyond a lack of education, a few more obstacles to universally free birth control remain. Besides the religious exemption, there’s also a subset of insurance plans that are “grandfathered” in such a way that they don’t have to cover contraception right away—though they will in coming years. Enrollment in grandfathered plans is dropping, with only 26% of covered workers enrolled in a grandfathered health plan in 2014, down from 56% in 2011, according to the Kaiser Family Foundation. Another exception is self-funded student plans.

The takeaway? If you’re paying more than $0 for birth control, it can’t hurt to do a little digging. If you are lucky (and persistent), you could end up pushing your insurer to better comply with the law—and save hundreds of dollars a year, to boot.

TIME Cybercrime

This Could Be the End of User Name and Password

Superintendent of the New York State Department of Financial Services Benjamin Lawsky Interview
Scott Eels—Bloomberg/Getty Images Benjamin Lawsky superintendent of the New York State Department of Financial Services, speaks during a Bloomberg Television interview in New York on Nov. 24, 2014.

Anthem, J.P. Morgan hacks could lead to tougher online security.

A top New York State regulator is “very likely” to impose new cyber-security rules on much of the banking and insurance industries after high profile cyber-intrusions at Anthem and JP Morgan Chase, law enforcement officials tell TIME.

The move could spell the beginning of the end for a decade-long debate among state and federal regulators over whether to require companies to go beyond the simple user name and password identity checks required to access many computer networks at the heart of America’s financial system and could affect everyone from employees at those firms to the consumers they serve.

Early investigations in the Anthem case suggest foreign hackers used the user name and password of a company executive to get inside Anthem’s system and make off with personal data for 80 million people, including names, addresses and Social Security numbers, the law enforcement officials tell TIME. Anthem had invested in extensive cyber defenses in recent years, but the officials say initial investigations suggest the theft could have been averted if the company had embraced tougher methods for verifying the identity of those trying to access its systems.

That shortcoming reflects systemic weaknesses found throughout the industry in an upcoming study by the New York State Department of Financial Services, a version of which was reviewed by TIME. Among the most worrying findings was a marked level of over-confidence among insurance industry officials regarding the security of their systems. “Anthem is a wake-up call to the insurance sector really showing that there is a huge potential vulnerability here,” says Benjamin Lawsky, the department’s superintendent.

While many big health, life and property insurers boast robust cyber-defenses, including encryption for data transfers, firewalls, and anti-virus software, many still rely on relatively weak verification methods for employees and consumers, and have lax controls over third-party vendors that have access to their systems and the personal data contained there, according to the report. The study follows a similar review by Lawsky’s office of the banking sector late last year that led to tighter cyber-examinations for banks doing business in New York.

As the fourth-largest state and the home to many of the corporations in question, New York could affect consumers in other states with its decisions.

For more than a decade, federal and state regulators have debated measures to require increased security at banks and insurance companies that handle the financial and personal details of hundreds of millions of Americans. In 2005, the federal body charged with setting the examination standards for federal regulators concluded [pdf] that simple user name and password systems were “inadequate” for “transactions involving access to customer information or the movement of funds to other parties,” but stopped short of requiring tighter measures. Updated guidance in 2011 [pdf] also stopped short of requiring them.

MORE Apple Might Make Computers You Control With Hand Gestures

The primary federal regulator of big banks, the Office of the Comptroller of the Currency (OCC) says different banks need to assess their own risks in determining whether to use additional verification methods. Other regulators have worried that if one agency, like the New York State Department of Financial Services, tightens standards on its own, the result will be a patchwork of rules that make life difficult for banks doing business across the country.

Still, most agree that username and password security alone is increasingly vulnerable to hackers. As American Banker reports:

Most of the security breaches that occur in banking today use compromised credentials. More than 900 million consumer records have been stolen [in 2014] alone, according to Risk Based Security; 66.3% included passwords and 56.9% included usernames. According to Verizon’s latest Data Breach Investigations Report, weak or stolen login credentials were a factor in more than 76% of the breaches analyzed.

The additional measures New York State is likely to require are known as “multi-factor authentication” and include a range of approaches to verify the identity of those trying to sign on to a computer system. Options include sending a confirmation number to an individual’s cell phone, using a fingerprint or other biometric authentication, or using a separate identification source, like a swipe card.

Lawsky has not decided whether his new rule would require institutions to use multi-factor authentication only for employees and third-party vendors, or whether consumers would be required to use them too. However, requiring major banks and insurers under his purview—such as Barclays, Goldman Sachs, Anthem and others—to adopt multi-factor authentication could change the industry standard.

Lawsky says he is eager to see that change. “The password system should have been buried a long time ago, and its high time we buried it,” Lawsky tells TIME. “We really need everyone to go to a system of multi-factor verification. It is just too easy, whether through basic hacking or through phishing or stealing basic information, for hackers to get a password and a user name and then to get into a system,” he says.

MORE Why Your Passwords Are Easy To Hack

State and federal officials have argued that banking and insurance cyber vulnerabilities pose a threat not just to the accounts of individual consumers, but potentially to the stability of the entire financial system. The Obama administration’s recently released National Security Strategy says, “the danger of disruptive and even destructive cyber-attack is growing,” thanks to “malicious government, criminal, and individual actors,” targeting the networked infrastructure on which economy, safety, and health rely.

The New York State Department of Financial Services study of the insurance industry shows most are largely convinced they are confronting and defeating hackers. 58% claimed they had experienced no security breaches during the three years preceding the 2013-14 study, while 35% said they had only between one and five such incidents.

To some that suggests naiveté on the part of the industry. As FBI Director James Comey said last fall, “There are two kinds of big companies in the United States. There are those who’ve been hacked by the Chinese and those who don’t know they’ve been hacked by the Chinese.”

In addition to the new rules on identity verification, Lawsky expects to impose new requirements on third-party vendors that have access to insurance company databases. Those vendors often have lower cyber-security standards and are not required to describe those standards to the companies even though they often have full access to personal data held by the company.

Read next: The 7 Biggest Lies You’ve Been Told About Hacking

Listen to the most important stories of the day.

TIME Companies

Health Insurer Anthem Hit By Massive Cyber Attack

The company said names, birthdates, email address, employment details, Social Security numbers, incomes and street addresses were stolen

(INDIANAPOLIS) — Health insurer Anthem said hackers infiltrated its computer network and gained access to a host of personal information for customers and employees, including CEO Joseph Swedish.

The nation’s second-largest health insurer said it was contacting customers affected by the “very sophisticated” cyberattack and was working to figure out how many people were affected.

The company said information the hackers gained access to included names, birthdates, email address, employment details, Social Security numbers, incomes and street addresses of people who are currently covered or have had coverage in the past.

The Indianapolis-based insurer said credit card information wasn’t compromised, and it has yet to find evidence that medical information such as insurance claims and test results was targeted or obtained.

Anthem Inc., which recently changed its name from WellPoint, runs Blue Cross Blue Shield plans in more than a dozen states, including California, New York and Ohio. It covers more than 37 million people.

The insurer said all of its product lines were affected. It sells mainly private individual and group health insurance, plans on the health care overhaul’s public insurance exchanges and Medicare and Medicaid coverage. It also offers life insurance and dental and vision coverage.

Affected brands include Anthem Blue Cross, Blue Cross and Blue Shield of Georgia, Empire Blue Cross and Blue Shield and Amerigroup.

Anthem said Wednesday evening that the FBI is investigating and the company has hired Internet security company Mandiant to improve its network defenses. The insurer will provide free credit monitoring and identity protection services.

The FBI urged Anthem customers contacted by the insurer to report suspected instances of identity theft.

In 2013, the insurer agreed to pay $1.7 million to resolve allegations it left the information of more than 612,000 members available online because of inadequate safeguards. The U.S. Department of Health and Human Services said that security weaknesses in an online application database left names, birthdates, addresses, telephone numbers, Social Security numbers, and health data accessible to unauthorized users.

The Health and Human Services Department said then that the insurer didn’t have adequate policies for authorizing access to the database, didn’t perform a needed technical evaluation after a software upgrade, and did not have technical safeguards to verify that the people or entities seeking access were authorized to view the information in the database.

TIME Advertising

Here’s Why Nationwide Ran That Depressing Super Bowl Ad

It was to raise awareness about the number one cause of death for children

Nationwide Insurance has been getting some flak for its super-depressing Super Bowl ad about a child’s death, and now the company is telling its side of the story.

“We were not trying to sell insurance with this ad,” says Nationwide CMO Matt Jauchius. “We were trying to save kids’ lives by making people aware of this.”

According to the Centers for Disease Control and Prevention (CDC), accidents are the number one cause of death for children, and Jauchius says that’s been true since the 1950s. In fact, he said, if you average the number of children who die in accidents per year (9,000), it comes out to about one per hour. That means that over the course of the Super Bowl, four children could have been killed by preventable accidents.

Jauchius notes that there is no insurance policy explicitly advertised in the spot. Instead, the ad was designed to promote the company’s Make Safe Happen program, which raises awareness about preventable accidents and offers tools to help parents make their homes safer (like checklists organized by age, or room in the home.)

But what about criticism that the ad’s tone was too depressing for Super Bowl Sunday? Jauchius disagrees, citing ads about cyberbullying and domestic violence that also ran during the game. Plus, he notes, what better time to raise awareness than when millions of Americans are tuned in at the same time?

“Some people would say that the Super Bowl is not the place for these kinds of ads that are trying to do social good,” he says. “But if all of this saves one kid’s life, it’s more than worth it.”

MONEY Insurance

The $300,000 Reason You Should Shovel Your Walkway ASAP

Shalonda Earvin clears the sidewalk in front of her Union St. home in Norwich, Conn., Tuesday, Jan. 27, 2015. Earvin said this was her fourth time out shoveling since it started snowing.
Sean D. Elliot—AP Shalonda Earvin clears the sidewalk in front of her Union St. home in Norwich, Conn., Tuesday, Jan. 27, 2015. Earvin said this was her fourth time out shoveling since it started snowing.

Your municipality may have laws on snow removal, but you'll pay an even bigger price if somebody slips and falls on your property.

Find that shovel, snow blower or your neighbor’s kid if you’re in the Northeast. Thanks to winter storm Juno, your driveway and walkway are likely topped with a lovely coat of white snow that could cost you a pretty penny if you don’t clear it quickly.

“Property owners face legal obligations to keep their property clean, safe, and ice-free,” says Loretta Worters, vice president of communications for the Insurance Information Institute. “If you fail to shovel your sidewalk or other public walkway, and someone slips and falls, you could potentially face a lawsuit. In some states, you may have broken the law, too.”

You’re responsible not just for snow and ice on private walkways but also public ones that abut your land. If you fail to keep your premises safe, those who are injured on your property could sue you, says Worters. “If someone slips on ice because of a poorly positioned downspout, it is considered negligence,” she adds.

Some places like New York City and Bridgeport, Conn. have also enacted laws that make landowners responsible for keeping public sidewalks clear of ice and snow. Those who fail to follow the law can be fined. In New York, you could have to pay up to $150 and be subject to up to 10 days of imprisonment.

Often, places that have snow clean up laws will also have a time limit for when pathways need be cleared. “Some jurisdictions say that a property owner can wait a ‘reasonable amount of time’ before clearing, which is nebulous,” says Worters. “But in Boston, property owners have three hours after the snow falls to shovel.”

While it is a good idea to check directly with your local municipality to find out if snow clearance laws apply for your town and state, the safest route is to simply shovel your area within a few hours of the snowfall’s end so you can avoid both fines and litigation. After all, even in places that do not legally require you to clear the snow, such as Ohio, you can still face a lawsuit.

Since even the most vigilant shoveler may miss a spot, Worters also recommends having liability insurance coverage to pay the cost of your legal defense and any court awards (up to the limit of your policy) should someone slip on your property and sue you. Liability limits generally start at about $100,000, but the Insurance Information Institute advises that you purchase at least $300,000 worth of protection.

MONEY Insurance

The Best and Worst States to Have a Fender Bender

fender bender
Getty Images

Even just one car accident can send your insurance premium soaring, a new survey finds. Especially if you live in Massachusetts, California, or New Jersey.

Filing just a single claim for more than $2,000 after a car accident can raise your auto insurance premium by more than 40% on average, according to a new study by insuranceQuotes.com, and you can expect your premium to nearly double if you file two.

The study looked at insurance premiums for a college-educated, 45-year-old woman who has never filed a claim. For that driver, a bodily injury claim will raise premiums by 45% on average, while a property damage claim will hike them by 41%. However, a comprehensive claim, such as theft or damage from falling objects, will cause only a 2% price increase.

Typically, sharp premium hikes kick in only if the accident is the driver’s fault, the study notes. If the other driver’s policy covers the claim, a policyholder will likely avoid such higher costs.

Because of different regulatory environments, the penalty varies widely depending where you live. In Maryland insurance premiums increase an average of 22% after one accident claim, the lowest hike in the nation. That’s an enviable number for drivers in Massachusetts, where premiums are closely tied to driving records. Bay State residents face a 76% increase, the highest in the nation.

For consumers, the lesson is simple: After a minor accident, you might be better off covering repair costs out of pocket rather than tapping your insurance policy.

“If there are injuries involved, you almost certainly want to file a claim,” says Michael Barry, vice president of media relations for the Insurance Information Institute, adding that bodily injury costs are often five times the payout of a property damage claim. “If it’s a fender bender, you might not want to.”

By dishing out the cash to repair a bumper, you could avoid the long-term financial hit of years worth of higher premiums. (One possible exception: Look at your policy to see if you have accident forgiveness, advises Barry.) You can run the numbers with insuranceQuotes’s “Should I Make a Claim?” calculator.

In these 10 states in particular, you might be better off taking the hit.

States With the Highest Premium Hikes After a Single $2,000 Claim
State Average annual auto premium Average increase
Massachusetts $977 76.3%
California $750 75.4%
New Jersey $1,220 62.4%
North Carolina $611 51.7%
Minnesota $719 47.9%
South Dakota $557 44.8%
Iowa $561 41.6%
New Hampshire $717 39.5%
Washington $810 39.5%
Virginia $692 37.5%

Whereas in these 10 states, a single accident won’t be as costly.​

States With the Lowest Premium Hikes After a Single $2,000 Claim
State Average annual premium Average increase
Maryland $996 21.6%
Michigan $1,049 23.4%
Montana $658 24.6%
Oklahoma $737 24.6%
Mississippi $748 25.9%
Nebraska $617 27.6%
New York $1,152 27.8%
Missouri $684 27.9%
Alabama $659 28.6%
Maine $582 29.1%

Sources: Average premiums via National Association of Insurance Commissioners (NAIC); insuranceQuotes.com.

Though many factors go into determining your premiums, the number and severity of insurance claims is a starting point for insurers, which then factor in variables like your age, driving record, and type of vehicle.

If you live in Detroit, any increase to your premium will add to an already substantial financial burden. According to carInsurance.com, drivers in the 48227 zip code in the Motor City already pay $5,109 annually, the highest average premium in the country. You can check out the website’s car insurance calculator to see how your zip code compares to that of Normal, Ill. (61761), whose residents only pay $827, the lowest in the country.

UPDATE: This post was updated to add more details about the study and to clarify the averages.

TIME Money

Why You Might Need More Car Insurance Than You Have

Car accident
Zero Creatives—Getty Images/Image Source Woman on mobile phone after car accident

That fender-bender could be more of a headache than you think

Being in a car accident, even if you’re lucky enough to escape without injury, still stinks — especially if it isn’t your fault. But what’s even worse than the inconvenience and the hassle factor is the reality that, in many states, you might not be completely covered by insurance, even if you’re a responsible driver who carries insurance.

That’s because there’s often a gap between the minimum states require drivers to carry and the amount that would be necessary to cover the cost of an accident, especially if anyone in your car is injured. Even something as minor as taking an ambulance ride to the hospital to get checked out can run into the hundreds of dollars, and costs obviously escalate depending on the severity of any injuries.

Personal finance website WalletHub.com just put together a ranking of the financial risk you face when you get behind the wheel, analyzing all 50 states and the District of Columbia to find out the legal minimum of insurance coverage drivers must carry as well as how many drivers in that state don’t bother to get insurance.

In short, stay out of of Florida and Oklahoma. Florida’s insurance requirements are lower than most other states, and 24% of drivers on the roads there are cruising around without insurance (which, yes, is illegal). In Oklahoma, requirements aren’t as low, but a whopping 26% of drivers don’t bother buying insurance. In Tennessee, Michigan, New Mexico and Mississippi, more than one in five drivers have no insurance.

How can you protect yourself? Unfortunately, it’s likely to cost you.

“In most states, drivers can purchase uninsured motorists coverage to cover their own bodily injuries and/or property damage if the at-fault driver has no insurance,” says WalletHub managing editor Karl Eisenhower.

In fact, in 21 states, you’re required to carry this type of coverage. In some states, you have to carry this insurance to cover property damage costs, while others make you carry coverage for medical costs if you’re hit by an uninsured driver. Eight states make you carry both. Drivers also have the option — and in a handful of states, the obligation — of buying insurance for personal injury protection or medical payments. “[These] will cover your medical bills after an accident regardless of fault,” Eisenhower says. “If you carry one of these . . . you can be certain any medical bills will get paid quickly.”

In states like Florida, where the minimum liability a driver has to carry is a mere $10,000 in coverage per injured person, or $20,000 per accident, getting into an accident with somebody who does have coverage but not enough of it could be a concern, too.

“Underinsured motorists coverage will protect you if your damages exceed the limits of the at-fault driver’s liability policy,” Eisenhower says. In the states of California, Massachusetts, New Jersey and Pennsylvania, a driver only has to have $5,000 worth of coverage for property damage — hardly enough to make you whole if you’re driving a luxury car or your vehicle is totaled.

“Just because someone doesn’t have sufficient insurance doesn’t reduce that person’s responsibility if he or she causes an accident,” Eisenhower adds. Unfortunately, this means you’d have to spend the time and money suing them — and be out-of-pocket for potentially thousands of dollars in the meantime — before getting compensation. If you have extra coverage for uninsured or underinsured drivers, “suing to reclaim costs is the insurance company’s headache, not yours,” Eisenhower points out.

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