Smart Auto Insurance Blog

According to Jeannine Koranda of the Wichita Eagle, a bill pending in the state legislature would prevent Kansas auto insurance companies from charging different premiums to drivers with different credit ratings. Senate Bill 24 is currently waiting for a hearing in the Financial Institutions and Insurance Committee.

The bill has sponsors from both political parties, whom believe that auto insurance rates should be based primarily on a person’s driving record. Senator Oletha Faust-Goudeau also believes that using credit ratings to determine premiums has a disproportionate impact on lower socioeconomic levels: they tend to have lower credit ratings, and therefore pay more for their car insurance. This bill could change that, and lower rates for most Kansas drivers.

The Insurance Journal recently published an article highlighting trouble in paradise: Hawaii auto insurance fraud is growing rapidly! According to the Department of Commerce and Consumer Affairs (DCCA), convictions by its Insurance Fraud Investigation Unit increased by a whopping 61% in 2008, following a similar increase in 2007.

Fraud results in higher auto insurance rates for all. Estimates from the DCCA claim that motor vehicle insurance fraud results in up to $300 worth of increased premiums per person per year.

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Carla Castano from KXAN Austin recently reported on a new trend: police are pulling over drivers, and towing their cars if they lack Texas auto insurance. The ordinance came into effect last week in Dallas. Reportedly, Austin is planning to consider a similar ordinance. Texas’ Auto Insurance Verification Program, run by the state’s Department of Public Safety, is able to run a person’s license plate in order to tell if they have liability insurance.

These new laws may result in more defensive driving by the uninsured to avoid being pulled over in the first place, predicts Carla. Even though it already costs about $250 to pay a ticket for driving without insurance in Austin, almost a quarter of the population was still driving uninsured.

Insured drivers may need to have uninsured motorist coverage to protect themselves. The economy is making more drivers forgo car insurance in favor of other essential needs. Unfortunately, uninsured drivers often lead to higher auto insurance premiums for everyone; often, they also have to pay penalties once they reinstate their insurance. 

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The cost of New Jersey auto insurance could increase sharply for some drivers, claims Rudy Larini in the Star-Ledger. A new rule that came into effect on January 1st allows auto insurance companies to deny coverage to virtually anyone they want for almost any reason (barring obvious, illegal discrimination of course). Before, the state’s “take-all-comers” rule required all insurers to cover all drivers in new Jersey, except those who either had a policy canceled for non-payment of the premium or garnered more than 7 points on their driver’s license. Now providers can take into account factors such as not having had a license for the past 5 years.

Drivers in urban areas will suffer the most impact. The “take-all-comers” rule was first enacted when they complained of not being able to find auto insurance. According to Rudy, the rule was intended to be temporary, and this is just a final step in auto insurance reforms that have been going on for several years.

Individuals probably won’t have a problem finding an insurer that will accept them, since New Jersey requires all drivers to have insurance. Unfortunately, that insurance could be far more expensive than it was previously. If someone is rejected by two or more insurers, they will automatically be directed to the state’s high-risk pool. If that pool increases to more than 10% of NJ drivers, the rule will be reinstated to prevent discriminatory auto insurance rates.

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The two largest providers of Alabama auto insurance recently announced plans to lower their rates, according to Jeff Amy in the Press-Register. State Farm, which holds almost a quarter of the state’s auto insurance market, will lower its rates by about 1.8%, as of January 12. Second-place Alfa Insurance is going to decrease its rates by 1.7% to 1.9%, depending on the subsidiary which wrote the policy. Those rate changes will go into effect on January 26.

Progressive Insurance also intends to lower its insurance rates for one of its Alabama subsidiaries later this month, by 5% on average. They’re the fourth-largest insurer in Alabama.

While Jeff warns that these lower rates won’t necessarily apply to everybody, it’s still a good idea to check out State Farm quotes or Progressive Insurance quotes, as well as Alfa’s, in order to keep up with rate changes in Alabama.

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According to a recent press release, Esurance has now begun offering auto insurance coverage in Utah.  With the addition to Utah to its coverage footprint, Esurance now offers auto insurance in twenty-nine states, accounting for roughly 85% of US drivers.

Utah residents who purchase an auto insurance policy online from Esurance will receive a 5% discount on their first policy term.

Any time competition increases in an insurance marketplace such as Utah, it is good for customers, as more opportunities to shop for the best Utah auto insurance rates will result.  Anybody who is knowledgable about the auto insurance marketplace will tell you that there is tremendous price variance between companies even for similar coverage levels, and you can save a substantial amount of money by first shopping before you buy.

9 News Colorado reports that a new state law (which came into effect on January 1st) is likely to increase auto insurance rates for Colorado drivers. The law requires insurance companies to automatically enroll policy-holders into a MedPay plan that provides an additional $5,000 in medical coverage. Ever since Colorado repealed its no-fault auto insurance law in 2003, there have been many problems surrounding the reimbursement of medical costs caused by an accident. This program is intended to fix many of these issues. Consumers can only opt out via a written form.

The extra coverage can increase your yearly premiums by $40 to as much as $1,200 per car, depending on your auto insurance rate. MedPay coverage isn’t really necessary if your health insurance covers car accidents, but a lot of policies don’t. Experts say you should think carefully before trying to reduce your auto insurance premiums by dropping out of the program; if you end up in a crash not covered by your health care plan, you may end up paying far more in the end.

More information about Colorado auto insurance.

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The Detroit Free Press reports that mayoral candidate Freman Hendrix claims that he will file a class action lawsuit against auto insurance companies if they do not lower Detroit auto insurance rates.

Detroit auto insurance rates are the highest in the country, twice as high as the rates for Philadelphia, the second highest cost city.

According to the Michigan office of Financial and Insurance Regulation, auto insurance rates vary greatly even within Metro Detroit.

Some Michigan Auto Insurance examples from top carriers

Married couple with 2 children and a clean driving record would pay GEICO $4738 if they lived in Southwest Detroit, $3244 in Pontiac or $2482 in Warren, and $1906 in Kalamazoo for comparable auto insurance coverage before any  discounts.  Through Allstate the family would pay $13,014 in southwest Detroit, $7774 in Pontiac, $6464 in Warren and $5536 in Kalamazoo.

More information about Michigan Auto Insurance.

IFA Insurance Company, an auto insurer serving Pennsylvania and New Jersey residents has announced that they will next accept payment of auto insurance premiums via Paypal.  The integration of Paypal into their accepted payment methods, is a innovative convenience for policy holders I would not be surprised to see other auto insurance companies to follow suit.

More Information about Pennsylvania Auto Insurance, and New Jersey Auto Insurance.

In a Boston Herald editorial, it’s said that auto body shops in Massachusetts are petitioning the state legislature for higher pay from insurers. They are asking that the state require a price floor; body shops would have to charge a minimum labor rate, and Massachusetts auto insurance providers would be required to pay no less than that minimum hourly rate for covered repairs.

The body shops claim that such legislation is necessary in order to keep up with inflation of their actual costs, and point out that their average rate is already under the national going rate for auto repairs (although insurance companies snap back that Mass. body shops also take more hours to fix a car than the national average, evening things out). Such a law would be likely to increase auto insurance premiums for consumers.