Smart Auto Insurance Blog

Spokesperson for the Insurance Information Network of California says that states are turning towards alternatives to pay for traffic violations.  This can save money and prevent increasing California auto insurance quotes for drivers who have a clean record to begin with.

Some counties are offering traffic violation classes instead of a fine and other areas are even offering community service projects such as picking up a litter.  With the economic downturn, many drivers are finding this to be a pretty good deal, especially if it means they can keep their driving record clean.

The article “Pay Your Speeding Ticket by Picking up Litter” by Susan Ladika on the Fox Business website confirms that points on your record matter big time when it comes to auto insurance rates.  As an example, USAA Auto Insurance offers a substantial discount to those with clean driving records for a period of time.  Savings can add up to 5-7% and make a big difference in a yearly premium.

Violations can stay on your record for up to three years, so keeping your record clean is definitely beneficial.  Auto insurance companies are using this as a large factor in calculating quotes for customers.  If an alternative is available you can not only save money on the ticket itself, but in the long run your auto insurance rates may be less.

Written by <a rel=”author” href=”http://www.smartautoinsurance.com/author/sarasmart.html“>Sara Smart</a>

Car theft has for many years been a major contributor of claims to auto insurance companies.  2010 shows a different trend in how many cars are being stolen and it’s good news for car consumers.  A recent report from the National Insurance Crime Bureau showed that less people were submitting claims for stolen cars in 2010.  This could mean lower auto insurance rates over time if this trend continues.

Data from the Federal Bureau of Investigation showed that reported car thefts went down 7.2% in 2010 when compared to 2009.  The National Insurance Crime Bureau points out that there are areas in the country that had more car theft, but overall it was down.  Fresno, California was on the top of the list for high car thefts and in 2009 it only ranked 5th.  Modesto and Bakersfield, California were number 2 and 3 for 2 years in a row.

Improved anti-theft technology and further law enforcement have contributed to fewer thefts, experts believe.  Despite these efforts there are still prominent fraud rings in certain parts of the US and law enforcement finds is very challenging to put a stop to these perpetrators.  Time and money continues to go into stopping car thefts, but the fact that overall the number of claims is down is good news.  Hopefully this will cause auto insurance rates to go down eventually as well.

Written by <a rel=”author” href=”http://www.smartautoinsurance.com/author/sarasmart.html“>Sara Smart</a>

State Auto Financial is an Ohio auto insurance and property/casualty insurance company and they saw a huge influx of claims throughout Ohio and the rest of the mid-west in May due to devastating storms.  They expect a pre-tax loss of around $45 million to $50 million from the storms throughout May.  Three specific catastrophes affected 23 of the states they operate in, including the massive tornado that hit Joplin, Missouri on May 22nd.  Auto insurance claims as well as property claims from tornadoes, wind and hail poured in quickly in a very short period of time.

State Auto plans on having over 9000 claims on cars and homes filed throughout the coming months due to the storms.  They confirmed previously that $75 million to $85 million in losses were experienced from April storms.  Before 2011, State Auto’s historic 5 year average loss ratio for the 2ndQ is around $50 million of losses so they are feeling a huge impact from these storms.  Bob Restrepo, State Auto Financial president and chairman CEO said that these storms continued a deadly pattern of destruction throughout the mid-west.

The article “State Auto Financial Expects May Catastrophe Loss Up To $50m” found on claims.insurance-business-review.com points out that State Auto employees are working endlessly to respond to claims quickly and efficiently in the best effort to help out struggling victims.  Some agents who even lost their offices due to storms are working to help customers through this tough time.

It’s becoming common knowledge that having a good credit score will save you money on your auto insurance rates, but it’s unclear exactly how much it will save you.  Based on a recent CarInsurance.com study, drivers with credit ratings over 750 save about $783 a year on their auto insurance quotes when compared with a typical driver in the same age group with average credit scores.  The study used 42,809 auto insurance quotes to determine this figure and the results are surprising.

If you calculate this out over a lifetime of driving, a person with excellent credit can save approximately $22,815 on their auto insurance premiums.  Credit is only one factor out of many that insurers use to calculate quotes but it’s becoming increasingly important.  Auto insurance companies strongly defend their use of the score despite many consumers finding it unfair.  Insurers have found a direct correlation between someone’s credit rating and the chances of them filing a claim.  Regardless of the reasoning behind this connection, there is a connection and it makes sense for insurers to use this information.

The good news is that you have control over your credit score.  Even if you have filed bankruptcy or charged off some accounts, you can repair your credit through time and bill management.  It’s important to keep your credit card debt down and make all of your payments on time.  It may take a few years, but once your credit score has improved you can start to compare auto insurance quotes and hopefully see a difference in the rates you receive.

Many states are still working under the no-fault auto insurance ruling and experts believe this is causing a crisis in the auto insurance industry.  The laws were originally put into place to stop ambulance chasing lawyers from submitting small-claims cases, and it helped car accident victims receive funds quickly instead of waiting for the determination as to who was at fault.

Unfortunately, these laws are backfiring since many believe its contributing to fraud, rising medical costs, large benefit payouts, and excessive lawsuits.  Auto insurance quotes in Florida are skyrocketing and many are blaming their no-fault laws according to “Why Does Everyone Hate No-Fault Car Insurance?” by Barbara Marquand on FoxBusiness.com.  Some insurance companies have actually limited their business in states with no-fault insurance laws since it ends up being so much more expensive for the insurer.  This ends up affecting competition and can drive up auto insurance rates.

Currently, 12 states and Puerto Rico have no-fault auto insurance laws including Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, and Utah.  The laws allow policyholders to collect funds for car accidents from their own insurance company regardless of who was at fault.  The laws also prevent people from suing for pain and suffering unless their injuries are a certain extreme.  Florida is the nation’s staged-accident capital and this of course drives up Florida auto insurance quotes.  Many industry experts believe no-fault auto insurance needs to be eliminated altogether or the crisis will continues and rates will keep going up.

Many people wonder if using an agent is the best way to purchase auto insurance.  It’s true that using an agent can save you some time and possibly save you some money.  If you aren’t internet savvy, then using an agent may be the way to go.  Many companies offer agents to help customers with their needs.  One of these companies is Founders Insurance.

Founders auto insurance is offered in Illinois, Indiana, Ohio and Wisconsin with limits up to $100,000/300,000/50,000.  They offer quick, electronic SR22 filing and take international and out-of-state drivers license.  According to their website, Founders Insurance is a preferred choice of agents for higher risk policies.  Whether you have a poor driving record, poor credit rating, or coverage lapses, Founders will work with you to try to get you the best coverage possible.  This is where an agent can come in especially handy.  High-risk drivers often have a harder time finding quality auto insurance online or on their own.  An agent knows where to look to get deals for non-preferred customers.

Founders Insurance also has complete online capabilities including quoting, binding, and policy issuance, payments, endorsements, document reprinting, renewals, claim reporting and form downloads.  You can even chat online or over the phone with an underwriter with any questions you may have about your policy and quote.  Founders works hard to have state-of-the-art imaging systems for underwriting and claim handling and are constantly working to improve their business.  Speak with an agent to see if this might be the right option for you.

You may have seen some recent commercials on TV or ads in the paper from Nationwide Auto Insurance discussing their Vanishing Deductible program.  A vanishing deductible sounds appealing but how does it exactly work and is it a good deal?

Basically this benefit will apply to good drivers only.  If you’ve never filed a claim with your auto insurance company you may feel that it’s unfair to pay the same deductible as someone who has filed claims in the past.  Nationwide believes you shouldn’t pay the same deductible if you have a clean record.  That is what motivated them to create this unique plan for good drivers where the deductible “vanishes” with good behavior.

The Vanishing Deductible program drops your deductible by $100 for each year you are a safe driver.  They even offer a $100 discount for signing up.  This optional feature does seem appealing and doesn’t have much of a downside.  According to their website, annual credits are subject to eligibility requirements with a maximum credit of $500.  It’s important to understand that details and availability of the plan vary from state to state so check with a local agent to see if this is an option for you.  Having an insurance company that offers little perks like this can make all the difference since the market is so competitive.

We all know that competition generally returns better prices for products but that holds extra true for car insurance quotes.  A survey from Gocompare shows that approximately 25% of consumers do not change companies when it comes to car insurance, homeowners insurance, and other financial accounts.  The article “Consumers Benefit From Competition for Car Insurance Quotes and Bank Rates” by Ed Dixon on Newstaar.com points out how drivers are missing out since car insurance is a highly competitive industry.

Most car insurance companies do not offer loyalty benefits for staying with the same insurer, so with that said, why aren’t more people shopping around to compare quotes?  Awareness is definitely one concern.  Many consumers aren’t aware of how highly competitive the market really is and don’t even think of changing companies.  They inadvertently have loyalty to an insurer and they’re not even sure why.

With so much competition in the car insurance arena, drivers who are no shopping around are missing on a huge opportunity to get lower rates, especially if they have a good driving record.  If you’ve been with the same company for years and years, your rates may have slightly gone up since you first became a customer and you don’t even realize it.  By shopping around you are getting other companies to fight for your business and offer you market low prices.  There’s no downside to shopping around.  If no one can beat your current price then you just stay with your current provider and no harm done.  You’ll likely be surprised how much money you can actually save.

Alabama has been one of the leaders in uninsured motorists for years according to the press release found on OnlinePRNews.com.  Alabama auto insurance leaders and state lawmakers want to change this statistic and are pushing through legislation to reduce the rate of uninsured drivers throughout the state.

Alabama state law says that residents must have a liability policy in place if they want to legally drive an auto.  They are also required to carry proof of insurance with them in the car.  Even though there is a $500 fine for first time offenders, many drivers still choose to go uninsured.  The Insurance Research Council says that about 1 in 5 drivers in Alabama were uninsured in 2009.  To discourage this stat, lawmakers are trying to put in place an electronic auto insurance verification database which would match up policies with autos registered in the state allowing officials and the Department of Revenue to quickly determine whether or not a given car is insured.

In order to register your car you must check a box confirming you carry auto insurance for the car, but this database would actually verify this information rather than taking the driver at their word.  Obviously a handful of drivers are blatantly lying about this information so something needs to be put in place to prevent this from going on.  Hopefully this type of system will encourage more drivers to keep their policy valid and choose to be truthful on their registration application.

Bristol West Insurance has a link on their page to The Coalition Against Insurance Fraud website with some useful information for consumers discussing how prevalent auto insurance fraud really is.  One particular article discusses how even minor “fudging of details” can be considered fraud and ends up costing insurers and ultimately consumers a lot of money.

Auto insurance fraud is not only committed by hardened criminals or fraud rings.  Many normal and generally honest people commit fraud through leaving out or changing minor details.  Some people feel they are owed more because of all the premiums they have paid so they tell a little white lie to get a little extra money.  They feel it’s a small amount and won’t hurt anyone.  The truth is, with so many people thinking this way, the losses to the insurance companies can really add up and at this point the costs are passed on to the customers through higher auto insurance quotes.

Ask yourself if you may have fudged the details just a bit in your favor.  Here are some questions to determine if you may be guilty of insurance fraud.  Have you ever underestimated the amount of miles you drive to work?  Have you ever said you park your car in a garage when you do not?  Have you let an auto repair shop inflate your bill to recoup your deductible?  Have you ever inflated the value of items in your car or home when filing a claim?  These are just a few examples of minor fraud violations that add up and really do end up costing everyone more money.  When you know better, you do better so, ensure you are as accurate as possible with your insurance company.