Smart Auto Insurance Blog

An article by Kenneth J. St. Onge in the Insurance Journal says that Esurance auto insurance has filed to obtain a foreign company license, the first step in being able to sell Massachusetts auto insurance. The insurer is following Geico and Progressive who have also decided to enter the state’s market, a year after deregulation of the industry. Like those companies, Esurance sells auto insurance policies directly to the consumer through the Internet.

Despite this indicator, Kenneth stresses that the auto insurance company states that they have no plans to enter the Massachusetts market any time soon. For one thing, they have not yet filed a rate plan; such an outline of the auto insurance rates they plan to charge is mandatory to sell insurance in the state.

According to insurance.com’s monthly RateWatch report for February:

• 21 states saw lower auto insurance rates on average vs. January
• 9 states experienced higher auto insurance rates on average.
• The remaining 20 states were either not included in the study (New York and Massachusetts) or experienced no significant changes in rates vs. the previous month.
• The 3 states with the highest rate increases included (Iowa 6.2%, Wyoming 5.4%, Utah 4.1%)
• The 3 states with the largest rate decreases included (Vermont 11.8%, DC 8.6%, Nebraska 7.0%)

Overall, auto insurance rates nationally fell to their lowest points since May, 2008, after an 8% increase for calender year 2008.

The Associated Press reports that GEICO has filed paperwork with the Department of Insurance and will begin selling auto insurance in Massachusetts.

GEIGO will be the second national auto insurance carrier to enter the Massachusetts auto insurance market since the state moved to “managed competition” last year, Progressive Insurance Company was the first.

Massachusetts was the last state to have their auto insurance rates set by state regulators before moving to a managed competition environment last year.

Cliff Reisig recently wrote about significant increases in New Mexico auto insurance rates in the Alamogordo Daily News. After being hit with a 48% jump in the cost of his auto insurance premium last year, even though he had never filed an accident claim in the 20 years he had the policy, he decided to investigate the cause. 

After contacting the state’s regulation commission, Cliff found that the New Mexico state legislature recently decided to deregulate the auto insurance industry. Now, insurance companies can increase their rates at any time for any reason. As a result, auto insurance rates have exploded across the state, far beyond the customary 3% or so inflation in past years.

Since New Mexico mandates that all drivers have auto insurance, a complete lack of price controls could hurt the state’s drivers.

Insweb has followed the lead of smartautoinsurance.com and insurance.com and has launched a device to track auto insurance rate trends.  While insurance.com provides a monthy report, and we at smartautoinsurance.com maintain a daily auto insurance rate blog that keeps track of auto insurance rate trends on a more detailed level, insweb has announced the launch of an online tool that tracks the median price of an auto insurance policy on both a state and local level.

Insweb’s calculation is based on regularly updated auto insurance quote information from leading national auto insurance carriers as well as comprehensive profiles of InsWeb auto insurance shoppers. By tracking those quoted rates over time, they can deliver a “trend line” that should provide directional accuracy.

The tool will be available to the public via select partner sites of theirs.

Here’s some great news for drivers with Massachusetts auto insurance: the state’s insurance commissioner, Nonnie Burnes, is no longer going ahead with her plan to shut down the appeals board. The Associated Press reports that her reversal comes after heavy criticism from the Massachusetts Attorney General, as well as the public.

The board, which was set to close on April 1st for new cases, allows motorists to appeal increased auto insurance premiums and added surcharges, levied when their insurance company determines them to be at fault in an auto accident. Annually, about 20,000 out of 50,000 drivers succeed in their appeals. Nonnie believes that despite that statistic, recent deregulation in the insurance market lets consumers buy auto insurance from a competitor if they believe their current insurer’s decision is unfair.

Major Northeastern insurer Plymouth Rock is offering several discounts on Massachusetts auto insurance, according to a recent press release.

To promote environmental consciousness, Plymouth has decreased auto insurance premiums for people who have “gone green” by driving fewer miles than the average in their area. This is similar to other auto insurance companies giving lower rates to drivers who do not use their cars for work commutes.

Inexperienced drivers, who normally have to pay more for policies, can save on their auto insurance rates by successfully completing a driving course from Driven Advanced Drivers Training. Plymouth Rock policy holders receive a 10% discount on the course.

Diane Levick in the Hartford Courant reports that Travelers Auto Insurance is expanding into the direct-to-consumer sales market. Unlike many major auto insurance companies, Travelers has solely relied on independent insurance agents until now. However, with an increasing amount of policies sold directly (two-thirds as of 2007), the company has joined firms such as Progressive Auto Insurance and Hartford Auto Insurance in selling through both avenues.

Currently, the Travelers auto insurance quotes available online or over the phone will be identical to those available through agents, though the insurer reserves the right to change those rates in either direction.

A report from Terrence Stutz in The Dallas Morning News states that some legislators have proposed a change to Texas auto insurance law that could result in significant savings on auto insurance rates. Two congressional Democrats, Representative Rafael Anchia and Senator Leticia van de Putte, have introduced bills that would make the following reforms:

• Auto insurance companies would no longer be able to increase rates immediately after they inform the Texas Department of Insurance. Instead, the state’s approval would be required before any rate increase.
• The state Insurance Commissioner would be elected to the public, making him or her more accountable to Texas drivers
• Insurers would be banned from using drivers’ credit ratings to determine premiums
• Policy forms would be standardized across all insurers in the state, making it easier to compare them

Terrence says that the fate of these measures is unknown at the moment.

Members of a variety of associations can save on their New Jersey auto insurance premiums with a local insurer. According to a press release from High Point Auto Insurance, more than 75 groups are eligible for extra discounts, including:

• the New Jersey Society of Certified Public Accountants
• OnStar
• the New Jersey State Chamber of Commerce
• New Jersey Soccer Group
• the New Jersey Dental Association

This membership benefit can be combined with other High Point discounts, which the company claims can result in up to 50% lower auto insurance rates.