Smart Auto Insurance Blog

Happy new year to Mike Campbell: the Associated Press reports that Geico has selected him as its new CFO (chief financial officer) and senior vice president. He was the associate controller and a vice president. Before that, he was their manager of corporate financial reporting. Campbell has been with the company since 1982.

This decision is probably a good thing for consumers looking for Geico insurance quotes. Warren Buffett owns Geico through his Berkshire-Hathaway firm, and even today is renowned for his sharp investment and business decisions that help keep his companies in good financial shape. It’s a good sign that Campbell knows Geico well, because he can help it maintain or better its current position as the 3rd-largest auto insurance company in America (based on written premiums over the past 12 months).

Insurance.com published a neat report in the 3rd quarter of 2008, which tracked auto insurance rate trends across the country.  The report can be found here (http://www.insurance.com/ratewatch/default.aspx)

Highlights of the report were as follows:

• Auto insurance quotes rose the 3rd consecutive quarter, reversing the trend in 2007
• The largest average auto insurance rate increases in 3q were found in: District of Columbia (8.3%), Nebraska (8.0%), Rhode Island (7.4%), Kansas (6.6%), Florida (4.9%)
• The largest rate decreases were found in: North Dakota (7.8%), West Virginia (7.0%), and Wyoming (4.5%)
• Shopping for a new auto insurance policy can yield huge savings.  Of more than 5,000 drivers surveyed, nearly 60% saved over $400 per year, and 25% saved over $800.

The increase in auto insurance rates in 2008, after a couple years of flat or declining premiums, in combination with the overall poor economy has lead to a steep increase nationally in the number of people who let their car insurance policies lapse.  Several hundred thousand drivers across the country allowed their policies to lapse in 2008 according to the insurance research council.  Similarly, insurance.com, found that about 40% of people calling into their call center in regards to applications they submitted online indicated that they had let their policies lapse.  The compares to less than 10% in recent years.  Studies have shown that for every 1% increase in unemployment, uninsured drivers increase by 0.5%

Letting your auto insurance policy lapse is never a good idea even if you are lucky enough to not get in an accident over the period of time when you are uninsured.  Uninsured motorists who let their policies lapse can be charged as much as 25-50% additional surcharge for a new policy, because they believe that allowing your policy to lapse indicates that you are less responsible and a greater risk than responsible drivers.