Smart Auto Insurance Blog

Some Georgia auto insurance customers will experience rate increases soon according to a story earlier this month published by macon.com.  Several auto insurers notified the commissioners office that they plan to raise their private passenger auto insurance rates while a handful of others said their rates would be dropping.   A new law that went into effect on 10/1 blocked the commissioner’s authority to block proposed insurance rate increases.

The following 19 auto insurance companies have filed to make changes to their rates (14 increases and 5 decreases):

• AIG National+2.4%
• Central Mutual -0.24%
• Grange Property & Casualty +7.4%
• 21st Century Insurance +8.9%
• GEICO -0.9%
• Government Employees Insurance -0.9%
• American Security Insurance +11.1%
• Unitrin +7.5%
• AIG Centenial +9.9%
• AIG Insurance+8.1%
• American Home Assurance +8.2%
• American International Insurance 9.0%
• TrustGuard Insurance 9.98%
• Grange Mutual Casualty 2.45%
• Depositors Insurance 7.6%
• Lincoln General -10.1%
• Allmerica +8.5%
• State Farm -0.1%
• Victoria Select +3.6%

In total, the Georgia auto insurance rate changes ranged from a 11% increase to 10% decrease.

Beginning January 1, 2009, auto insurance companies will be permitted to raise the North Carolina auto insurance rates by 9.4%.

North Carolina Insurance Commissioner Jim Long, initally requested that auto insurance companies reduce their rates by 16% but the N.C. rate bureau who represents the states auto insurers had previously requested a 12.9% increase.  A subsequent appeal to The North Carolina court of appeals trimmed the increase to 9.4% but that might be temporary until the court rules on the appeal.

The state of Pennsylvania offers some consolation to people paying expensive student loans, according to Jon Delano from KDKA Pittsburgh, but not for much longer if a state legislator has his way. Pennsylvania auto insurance companies currently offer reduced premiums to those who are better educated. Their justification is that people with more education are better drivers and less likely to make claims for an accident than someone with less education, like a high school dropout. Using that logic, it would make sense to give a rate break to individuals with advanced degrees, much like insurers raise premiums for teenagers because they tend to take more risks when driving, or lower them for married men since getting hitched supposedly calms them down.

However, the chair of the PA House Insurance Committee thinks these policies are discriminatory. Delano says that Representative Tony DeLuca wants to pass a law barring the practice, which I think will be an uphill battle. He points to the exceptions; the Ph.Ds unable to drive for beans and the amazing drivers who never finished the 5th grade. While those outliers do exist, insurance companies make decisions about their policies based on research of the majority’s driving behavior. Not all single males under 25 are reckless drivers, but statistics show that there are enough of them to justify higher premiums for that group.

DeLuca suggests that insurers should focus solely on a person’s individual driving history when figuring out their rates, which is probably best for everyone. It’s a good idea to get multiple auto insurance quotes and compare rates. But in that case, how will new drivers with no history get auto insurance?

(Photo credit: keithreifsnyder under CC 2.0)

New York Giants football player Plaxico Burress is in some hot water due to a car crash he was involved in last May. Last week he was sued in Broward County, Florida by the woman he rear-ended, says the Associated Press.

According to her lawyer, he was driving without auto insurance on his $140,000 Mercedes-Benz. All I can say is, really?! Didn’t you just win the Super Bowl? Although Plaxico has been involved in some other stuff lately that makes letting your expensive car’s auto insurance lapse seem like a good idea in comparison.

His insurance provider, Allstate, claims that he failed to pay his premiums. His policy expired just three days before the accident! He could’ve asked for an Allstate insurance quote and avoided this whole problem in the first place.

(Photo credit: tedkerwin under CC 2.0)

No matter what you celebrate, we at the Smart Auto Insurance blog wish you a peaceful holiday.

(Photo credit: kimberlyfaye under CC 2.0)

Russ Wiles from the Arizona Republic has a great tip to save money on your auto insurance. He suggests that you re-evaluate just how much you drive every year. Don’t overpay for your car insurance! I’m sure you have far better things to spend your money on, especially at this time of year.

Insurers charge different rates based on your yearly mileage. If you’re driving less for any reason (lost your job, shorter commute, etc.), check to see if you can be considered a “pleasure driver”. Your premiums will drop 10-15% in that case. The majority of providers consider pleasure drivers those that drive under 7,500 miles per year, but if you compare auto insurance you might get lucky and find one that’s more lenient.

(Photo credit: Glen Bowman under CC 2.0)

Eyewitness 4 News in New Mexico recently highlighted a new trend in auto insurance claims: after an accident, more people are choosing to keep the money from their claim as opposed to using it for repairs. I can see their point; in this struggling economy, it may seem like a better idea to pocket that insurance payout and use it for family needs (like food), instead of non-essential car repairs. As a result, body shops are reporting a 25% drop in repairs across the United States.

However, body shop employee Tommy Hufnagel claims that insurance companies will often underpay consumers when sending them a direct check. If you think you’ll need any repairs at some point (even if your automobile still works right now), it might be a better idea to get a body shop estimate first.

Mike Chaney, the Insurance Commissioner for the state of Mississippi, has recently decided to allow local auto insurance company Alfa Insurance to reduce their rates, along with letting them offer an extra discount to long-time customers. Starting on December 28th, the Associated Press reports that Alfa will reduce its rates by approximately 2.1%, resulting in about $1 million in savings for customers on their Mississippi auto insurance quotes. The discount for loyal policy holders, which goes into effect the same day, is 15% for customers that have been with Alfa for three years or longer, and 20% for those that have had their Alfa policy for at least six years.

According to Jeffrey Krasner in the Boston Globe, Progressive Insurance’s website recently showed incorrect comparisons with other auto insurance companies, making their rates appear cheaper than they really are. A computer glitch compared the price of Progressive’s 6-month policy with 12-month policies from Commerce Insurance or Liberty Mutual. (Unlike most Massachusetts auto insurance companies, Progressive sells policies in 6-month increments.)

Progressive spokesperson Cristy Colt stresses that they weren’t intentionally trying to mislead consumers; rather, the system is meant to divide competitors’ prices in half to show fair auto insurance quote comparisons. For now, the rate comparison tool on their website is down, and Progressive is sending letters to inform about 21,000 consumers whose decisions may have been affected by the error.

(Photo credit: wallyg under CC 2.0)

Today, I read a new article in the Wall Street Journal about the increase in uninsured motorists over the past few months. M.P McQueen reports that a recent survey by the Insurance Research Council found that several hundred thousand Americans have dropped their auto insurance over the past year, and that a 1% increase in the unemployment rate results in a 0.5% increase in the number of uninsured drivers.

Experts blame this issue on a perfect storm of higher unemployment and higher premiums hitting consumers at once. The U.S. Labor Department’s consumer price index indicates that auto insurance premiums have increased 3.8% over the past year. While I can’t blame drivers for trying to save money on auto insurance, dropping your insurance isn’t a good way to do it. Not only is driving with insurance illegal in 48 states and Washington, D.C.; but in the event of an accident, all of your assets could be wiped out in court. Also, you can be penalized with a 25-50% increase in premiums when you decide to buy auto insurance again.

A lot of people who have kept their auto insurance have downgraded to the bare minimum coverage, which may not be enough. If you get in an accident with an uninsured driver, uninsured motorist insurance will protect you and compensate your medical expenses. 20 states currently require this type of insurance by law; drivers in other states who don’t have this coverage would have to sue for compensation. Most uninsured drivers don’t have a lot of assets, so you’d be very unlikely to recoup any catastrophic medical expenses. Although uninsured and underinsured motorist coverage adds from 7% to 9% to your insurance premium, the increase in uninsured drivers on the road could make it valuable for drivers in every state.

Find out if your state auto insurance requirements include uninsured motorist coverage.