Smart Auto Insurance Blog

Residents may be in for a surprise when they obtain their California auto insurance quotes.  According to the article “State considers revised mileage-based auto insurance” on Central Valley Business Times’ website there is a new draft of pay as you drive regulations that has recently been released.  This revised plan may cause auto insurance quotes in California to consider how much a driver is in the car when determining the cost of a policy.  This has been in the works for months, and is backed by Insurance Commissioner, Steve Poizner. 

This article states that Poizner believes the pay as you drive concept is a cutting edge program which will create motivation for California drivers to drive less.  This will eventually lead to lower auto insurance costs, less pollution in the air, and less dependence on foreign oil. 

Some are concerned about the intrusion on privacy that the pay as you drive might create.  The Electronic Frontier Foundation says the original regulation would allow auto insurance companies to install electronic devices into their policy holders’ cars to track how much they drive.  It will also track a variety of other information such as location and seat belt wearing.  The revised plan will prohibit black boxes to track location.  Companies will use odometer readings and estimates from the policy holder as well.  It’s still to be determined how this new regulation will all pan out in the end.

According to an article on coosavalleynews.com by Tony Potts, State Farm auto insurance is reminding everyone that the Federal Government’s Car Allowance Rebate System (CARS program or “Cash for Clunkers”) has an auto insurance requirement.

Last week the US Senate agreed to extend the CARS program until Labor Day which is a great opportunity for more car owners to take advantage of the tax benefit.  By trading in an older car for a new one, tax credits will be given.  But there are stipulations, one of which includes auto insurance.  Trade-in cars must  be registered and insured for the full year before trading in.  This is an important reminder of how crucial it is for all autos to be covered by insurance.  Uninsured drivers pose a risk to everyone on the road, not to mention it’s the law in most states.

SR-22 auto insurance policies show the DMV proof of insurance according to an article on officialwire.com by Joel McLaughlin.  Auto insurance companies fill out a SR-22 insurance form for you and then they forward it to the DMV when your license has been taken away for various reasons including a DUI or getting in an accident with no auto insurance.

Once the DMV gets the SR-22 insurance form they then have the proof that you are carrying minimum liability auto insurance and they will return your license to you.  The usual standard for carrying SR-22 insurance is 3 years.  This can vary depending on which state the violation occurs in and how severe the offense was.  If your auto insurance company cancels your insurance policy for any reason before the date of termination they will notify you.

Not all auto insurance companies offer SR-22 insurance so you may need to use a different carrier than you previously used.  You also may end up contacting numerous different companies to find a carrier right for you.

According to the article “Insurance Fraud Costs All of Us Money” by Jeanette Krebs on Pennlive.com, 7 out of 10 Pennsylvania drivers say they would not attempt insurance fraud.  That leaves about 2.5 million people who may consider fraud.  The same group of polled people believe that those who commit auto insurance fraud are rarely caught. 

Getting Pennsylvania auto insurance quotes already includes many factors most of which are based on individual information.  But the economy, business stability and fraud losses are all considered when auto insurance rates are determined.  This is why insurance fraud ends up costing all drivers on some level.  The worst part is that it is extremely difficult to catch these perpetrators.  According to the Franklin and Marshall University Poll about a quarter of respondents stated they would not report someone they knew involved in an insurance scam. 

In 1994 the fraud prevention authority was created as a funding mechanism, making funds available to law enforcement and prosecutors to manage insurance fraud.  The budget is approximately $11.6 billion which comes from insurance companies within the state.  Part of the money is also used to educate Pennsylvanians about fraud, such as TV ads letting people know they can go to jail for engaging in insurance fraud.

Good news for California auto insurance policyholders with USAA.  USAA Auto Insurance announced that it is reducing their auto insurance rates by an average of 7% in California according to an article on insurancejournal.com. 

USAA auto insurance is the tenth largest auto insurer in California insuring about one million automobiles. According to the California Department of Insurance, this covers approximately 3.5% of the auto insurance market. 

USAA California customers will save on average of 7% or about $104 per policy each year.  This totals to $47.6 million under the newly approved rates.  These auto insurance rates will apply to policies that are renewed or written after August 5, 2009.

Many consumers are considering trading in their older, less fuel efficient cars for newer cars to earn some extra cash through the government’s CARS program (Car Allowance Rebate System).  But higher auto insurance rates could minimize the benefits of trade ins according to insurance.com. 

Buying a fuel efficient car is great for the environment, but new cars generally have higher auto insurance rates because they are more expensive to repair and replace.  You may end up offsetting the savings from the government.  Fuel efficient cars do cut gas costs weekly right away, but auto insurance rates can cost you a lot more money over time so shopping around is crucial.  According to a study from women-drivers.com 22% of drivers shopped for auto insurance before buying their policy for their new car.  Rates are dropping so shopping around for auto insurance is a smart move. 

The CARS program is still a great initiative towards protecting our environment, but it may not be for everyone.  As always, do your homework before trading in or buying a new car.

Owners of hybrid cars can get a discount on their auto insurance for being environmentally friendly according to the article “US Hybrid - Auto Insurance Leader Says Being Green Pays” by Lavonne Kuykendall of Down Jones Newswires. 

Farmers Insurance Group offers their customers driving hybrids a 10% discount which they started back in 2005.  The Senior VP of auto for Farmers, Brian Dwyer, believes it was the responsible thing to do according to this article.  The discount was first offered in California which is home to about 25% of all hybrid cars registered in the US. 

Currently Farmers insures approximately 90,000 hybrids in the US which is about 7% of all hybrids sold in the last ten years.  This is according to research from Edmunds Inc.  Dwyer also pointed out that it’s probably good for auto insurance companies and the country if more drivers switched to hybrid technology which combines the use of gas and electric engines to save on fossil fuels, ultimately protecting the environment.  Edmonds shows that about .8% of cars sold in the US since ‘99 are hybrids and in ‘09 hybrids are up to 2.6% of all cars sold in the US.  This increase may seem small over a decade, but it’s movement in the right direction and is very encouraging.

According to the article “Auto Insurance fraud cases surge, commissioner says” on myvalleynews.com, cases of suspected California auto insurance fraud has increased significantly over the past year.  State Insurance Commissioner Steve Poizner discussed the surge during an appearance in San Diego on Tuesday. 

It is suspected that the economic downturn is causing the increase in fraudulent behavior, but Poizner reminds Californians that breaking the law will only compound financial problems.  The state Department of Insurance estimates that fraud claims are up by 25% from 2007 to 2008.  The agency also received 200 more notices about possible auto theft fraud in 2008. 

Poizner advised that state insurance fraud investigators are hard at work to crack down on anyone attempting auto insurance fraud.  Not only does this behavior mean problems for the perpetrator but it also ultimately raises everyone’s auto insurance rates.