Smart Auto Insurance Blog

The American Automobile Association (AAA) released its 2011 Your Driving Costs research which indicated that the price of auto insurance quotes on a sedan is down 6.1% but driving costs overall increased by about 3.4% since last year.

The AAA report shows that the average annual auto insurance premium for a sedan is $968 which is down $63 from 2010 according to the article “AAA: Insurance Costs Down, Overall Driving Costs Up in 2011″ by Matthew Morisset on the Online Auto Insurance News Team.  This decline cancels out the auto insurance increase from 2010.  The 2010 report showed that policy costs had gone up by 5.7% from 2009.

The insurance costs were based on a 47 year old man with a good driving record and drives between 3-10 miles each day.  The coverage for this sample policy included adequate coverage of $100,000/$300,000 with a $500 deductible for collision and a $100 deductible for comprehensive coverage.  This gives an average look of what a common policy price looks like for an individual but would obviously vary if the coverage, mileage or age were different.

The average yearly costs to own and operate a sedan is $8776 based on 15,000 miles per year.  This number actually increased from 2011 most likely due to the rise in gas prices, the costs of tires and the increase in depreciation rates.  A variety of cost categories were looked at including auto insurance, fees for licensing, taxes, finance charges, depreciation, gas, maintenance and tires.

According to the article “Florida Senate Panel Advances Auto Insurance Bills” by Brent Kallestad on Business Week’s website, two Florida bills aimed at cutting down the amount of fraud running rampant through Florida moved passed an important Senate panel.  The Senate Banking and Insurance Committee barely approved the bills after some debate between lawmakers.

Legislature is trying to get a handle of the amount of auto insurance fraud that is frustrating insurers enormously.  The bills move forward after being backed by the insurance industry which would give them more power to deny claims they deem suspicious for fraud.  A similar bill is moving through the Senate as well.  Florida auto insurance quotes are impacted by the amount of fraud going through the state, so hopefully as fraud decreases so will auto insurance quotes Florida.

The bills are guaranteed to pass.  Mark Cedarberg, an Orlando lawyer, cautions lawmakers about giving the insurance companies too much freedom.  He believes that if the bills pass it will make it harder on honest people, including honest doctors who need to be paid.  Once an auto insurance company decides to deny a claim it will be challenging to get it reversed.  Insurers, medical providers, and lawyers all agree that fraud is too prevalent, but they can’t agree on the best solution to fix the problem just yet.

Bristol West has a link to the Insurance Institute for Highway Safety website because driver safety is a priority to them.  Not only will driving safe keep your auto insurance quotes lower, but it keeps you and your family safe on the road.

An article posted on the Insurance Institute for Highway Safety website discusses the 2011 Top Safety Pick in their “Hyundai Equus Earns 2011 TOP SAFETY PICK Award” listing.  This luxury car earns this award for many reasons.  They actually earned this high rating across the board in the Institute’s safety evaluations.  The Equus was rated good for front, side, rollover and rear crash protection.  On top of this, it has electronic stability control which has become another requirement for earning the Institute’s highest rating.

In the rating for roof strength for rollover protection, the Equus withstood a force equal to 4.87 times the car’s weight.  This earns them a high rating as well since the current federal standard is 1.5 times a car’s weight.  Bristol West Insurance not only wants drivers to know about safe cars, but they hope lives can be saved through education.  As car makers compete for this honor, the hope is that vehicles will become safer and safer over time.  Many auto insurance companies take car safety into consideration when they calculate an insurance quote because someone is less likely to be severely injured in a very safe car.

Have you ever wondered how auto insurance companies recognize staged accidents and other fraudulent claims?  There are mechanisms in place with each insurer to limit fraud as much as possible and usually a whole department is dedicated to the efforts.  But there are some things you can watch out for to ensure you are not a victim of this crime.

The article “Staged Accidents And Scams: How to Spot Insurance Fraud” from The Car Connection website, says that stage accidents cost policyholders and insurance companies billions of dollars every year.  During the recession they’ve been increasingly popular according to the Insurance Information Institute (III).  Insurance fraud can take many forms from false claims, staged accidents, and huge fraud rings that stretch across the nation.

Some key warning signs that may indicate you are getting involved in insurance fraud include people who appear at the accident and insist you use certain lawyers and doctors, doctors who insist you file a personal injury claim even though you were not hurt, and when tow trucks appear without any calls being made.  Also, if after the accident you recognize other parties are inflating claims and misrepresenting facts you may be involved in someone participating in fraud.  It’s important to report any unusual activity to your insurer in hopes that they can get to the truth and not lose any more money on fraudulent claims.  It ends up costing everyone more money, not just the auto insurance company.

Many people often wonder what type of coverage they have if someone they lend their car to gets in an accident.  Unfortunately, most do not consider this when they compare auto insurance benefits.  This is an important benefit to consider though, especially if you think you may be lending out your car to any friends or family members during the life of your policy.

In general, auto insurance policies follow the car.  This doesn’t always make sense to drivers since rates are based on their driving record, not the person they lend their car to, but most insurers follow this rule.  It is possible that you would be responsible for coverage if you are driving someone else’s car and they do not have auto insurance.  This is unfortunate situation that can confuse drivers.

According to the article “Lending Your Car Can Bring Auto Insurance Concerns” by William Pirraglia on E-Wisdom.com, when you lend out your car to someone, you take on ‘vicarious liability’.  Your auto insurance is responsible for property damage, bodily injury, as well as other possible damage charges.  Since you gave permission to for someone else to drive your car, you have to accept liability for your friend’s activity.  Legally the borrower has no classic insurance liability unless the car has no insurance on it.  If someone steals your car and gets in an accident then you would not be considered responsible for liability so that at least is a good thing.

There are a lot of complex exceptions based on a variety of scenarios, so be sure to check with your specific auto insurance policy to see how your insurer will respond to each situation.  Knowledge is key in preparation for accidents if you do decide to lend out your car to someone you know.

Understanding your auto insurance company’s financial strength is important to protect your lifestyle and future financial well being.  Insurance agents, brokers, financial advisors, and other insurance professionals have long used AM Best’s Financial Strength Ratings to help support their insurance selection and investment choices.  It’s now recommended consumers also utilize Best’s ratings to understand their insurance company’s strengths.

Companies such as Founders Auto Insurance are found on the AM Best ratings list.  Founders Insurance received an A- as of July 2010 which is considered excellent.  This excellent rating is very important to the well being of the company.  Best’s Financial Strength ratings offer an independent evaluation from a third party to assist in determining the ability of an insurance company to fulfill its obligations with regard to a variety of insurance products, including auto insurance coverage.

The AM Best rating process gives all insurance companies the same rigorous review which provides an extremely valuable benchmark for comparing insurance companies against each other.  Companies can receive ratings from an A++ all the way down to an F which usually means the company is in liquidation.  A B or below is considered a vulnerable rating whereas a B+ or above indicates secure financial strength.

According to the article “Louisiana Auto, Property Insurance Rates Highest in US” by Christopher Tidmore on Bayou Buzz, an average quote for Louisiana auto insurance is $1,111 which is the highest in the nation.  This is based on a recent survey conducted by InsWeb.

There was a drastic difference between Louisiana and other southern states.  For example, North Carolina’s average rate is $495 and Virgina’s average rate was $521.  This is about half of what the state of Louisiana is experiencing which is making it difficult for Louisiana residents to afford auto insurance coverage.

The closest southern state was Florida coming in at about $750 on average.  Louisiana also ranked high for very high property insurance rates as well.  The average premium for home owners insurance for the whole nation is $690.62 which is significantly cheaper than Louisiana’s average which is $1392.  This is up .2% from the previous year.

The south typically has higher insurance rates because of the devastating threats of hurricane season, but Louisiana consistently is one of the most expensive states for insurance in the United States.

State Farm auto insurance offers pay-as-you-drive auto insurance policies in California, Ohio, Texas and Illinois.  Progressive Insurance offers it as well throughout the US.  It’s getting more and more popular.  According to the article “Low-Mileage Drivers Benefit From Insurers’ Pay-As-You-Drive Plans” by Eve Mitchell on BellinghamHerald.com, auto insurance rates are tied to part of the actual number of miles driven and many consumers are seeing big savings.

State Farm specifically calls their program the Drive Safe & Save program and drivers can self-report their mileage online or at an agent’s office before they renew their policy.  Customers who drive General Motors, Saab, and Saturn vehicles with OnStar technology and have a diagnostics account can have their actual mileage sent right to State Farm for updating.  Drivers are paying better attention to how they drive in hopes that it will ultimately save them money on their quotes on auto insurance.

The pay-as-you-drive momentum is party due to California’s Proposition 103 which was the landmark auto insurance reform bill passed by voters back in 1988.  It requires insurance companies to base rates primarily on the customer’s driving record, number of miles driven per year, and driving experience.  More recent regulations allow actual mileage to be a voluntary alternative to estimated mileage and it makes it possible for auto insurance companies to obtain mileage verification from devices inside the car.  Any savings from actual miles driven are applied once the policy is renewed.  Drivers who are not on the road that often really appreciate this initiative and are hoping to see big savings over time on their auto insurance.

Based on a recent online survey completed by the InsuranceQuotes website, a surprising 16% of American drivers say that they have driven without carrying auto insurance, which happens to be against the law.  Also in this survey, 2% admitted to currently driving around without auto insurance which is concerning for all insured drivers on the road.

With the past few years being tough economic times for many, this probably makes sense.  According to the article “16% of Motorists Have Driven Without Insurance” by Alex Vorro on insurancenetworking.com, 28% of males ages 18-25 and 45-54 were at the top of the list for driving without insurance.  The percent of women driving without insurance is only about half of men.

Men and women combined in the age group 45-54 were the most likely to have driven without insurance at about 22%.  In the age group over 55 only 8% have admitted to ever driving with auto insurance.  The survey also looked at the reasons why people were driving with out auto insurance.  Auto insurance quotes can be expensive and it would seem that would be one of the reasons.  Actually, 24% of drivers drove without auto insurance because they didn’t have a chance to renew, 19% because of a gap while switching insurance companies and 12% because the insurer cancelled their policy.

Every driver knows they should be carrying auto insurance to protect their car and their financial situation if they happen to be in a devastating accident.  Unfortunately, most people do not carry insurance for an earthquake or a tsunami and the Insurance Information Institute says the US is at risk for both of these natural disasters.

An article found through a link on the One Beacon Auto Insurance entitled “Few Homes Have Insurance Coverage for Earthquake or Tsunami, Although the US Is At Risk for Both” on iii.org, discusses the importance of making sure you have the right kind of insurance coverage for your specific living situation.  Most home owners insurance policies do not cover earthquake damage so individuals at risk need to shop around for either an endorsement or a completely separate policy to ensure they are properly protected.

Earthquake coverage is offered through various private insurance companies and can be affordable.  In California where earthquake risk is higher, insurance can be purchased through the California Earthquake Authority (CEA), which is a privately funded, publicly managed group.  In California, only 12% of people carry earthquake insurance which is down dramatically from 1996 when 30% carried protection.  During tough economic times people often eliminate unnecessary insurance products, but there is no earthquake season and you never know when you may be a victim of a catastrophic event.