Smart Auto Insurance Blog

Based on five factors used by J.D. Power & Associates, they determined that customer satisfaction is at an all-time high with auto insurance companies.  Suzanne Kane of The Car Connection talks about some of the study’s findings in “Customer satisfaction with auto insurance at all-time high: J.D Power.”  The five things researched in the 2012 U.S. Auto Insurance Study were price, billing, claims process, policy choices, and interaction with the auto insurer.  The first of this study was administered in 2000, and this year showed the highest customer satisfaction since then.

The satisfaction with price was pretty steady until you added in a significant price increase in auto insurance premiums.  Of those surveyed, 1/5 of them had received a price increase in the past year.  Customer satisfaction was 8% lower when price increases were above $50 than when they were below $50.  J.D. Power found that if insurance companies were up front with customers before a price increase and gave them alternatives to help change their pricing, satisfaction would not decrease as much.

Seven different regions were researched and ranked in the J.D. Power study.  The California Region’s highest ranking auto insurance company is Wawanesa.  State Farm ranked highest in the West Region.  The Texas Farm Bureau is the highest rated insurer in the Central Region and in the Southeast Region, it is the Farm Bureau Insurance Tennessee.  There is a tie in the North Central Region between State Farm and Auto-Owners Insurance.  Amica Mutual is the highest rated insurance company in the Northeast Region.  Finally, Erie Insurance took the top spot in the Mid-Atlantic Region.

Residents in Utah now have a new choice when looking for auto insurance providers.  Allied Insurance has partnered with local Utah business Brasher Insurance Group.  This will help both companies offer more affordable auto insurance coverage to the people of Utah.  Allied Insurance is a part of Nationwide, which has an A+ rating from A.M. Best Company.  They are known for their stellar customer service and for making customized plans to fit any individual auto insurance need.  Some of the great discounts offered by Allied Insurance include accident forgiveness, good student, more than one vehicle, and money off for certain safety devices in your car.

One of the reasons that Brasher Insurance Group was excited to partner with Allied Insurance is their focus on outdoor vehicle insurance.  Even though auto insurance coverage is the main business of Allied, they also specialize in coverage for ATVs, boats, motorcycles, RVs, and other recreational vehicles.  Utah’s residents love the outdoors, so Brasher’s CEO thought that Allied Insurance was a perfect fit for a partnership with his company.  Brasher Insurance Group is independent, so they can partner with big companies like Allied and offer the best Utah auto insurance rates to their customers.  Both companies are very focused on top notch customer service, so this seems to be a perfect fit.

Louisiana Governor Bobby Jindal is working hard to make sure that everyone in his state driving a car is carrying auto insurance.  Currently, one out of seven drivers in Louisiana is uninsured.  But with the signing of HB 1053, Jindal is steepening the penalties for residents who choose to drive without auto insurance.  This information comes from Matthew Morrisset’s Online Auto Insurance News article “Uninsured Drivers in Louisiana Facing Greater Consequences.”

Police officers in Louisiana used to only be able to tow an automobile if it was causing some type of danger to the public, but they now have free reign to tow any auto where the driver has been caught without insurance.  Once you’ve gotten in trouble for not carrying Louisiana auto insurance, your fines can be anywhere from $100 for a first time offense to $700 for a third time offense.  These changes take effect August 1st of this year, so it’s definitely time to check out auto insurance rates if you don’t currently have coverage.

There is a “No Pay, No Play” rule in place in Louisiana.  Anyone involved in an auto accident in the state will be in big financial troubles if they don’t have an auto insurance policy, even if they were not at fault in the accident.  For the first $25,000 in property damage and the first $15,000 in medical bills related to the accident, any driver who did not have auto insurance coverage will not be paid out, even if the other driver was at fault.  That is financially scary and can be devastating, especially since you have little to no control when someone else is at fault in an auto accident.  The bottom line is that it is cheaper to carry auto insurance than deal with the risks you could encounter if you don’t have it.

Many people are worried that Michigan’s No-Fault auto insurance system is headed for very hard times.  According to Pete Daly’s Insurance News Net article “Crisis Predicted In No-Fault’s Unlimited Coverage,” the amount of these Michigan auto insurance claims went up by 13% in less than a decade.  This unlimited lifetime medical coverage is only required through your auto insurance in Michigan, where every auto insurance company in the state has to pay into the coverage pool.

The Michigan Catastrophic Claims Association, MCCA, reimburses auto insurance companies for any medical bills they have to pay over $500,000.  After the MCCA started accruing too much debt, they had to double the amount they would cover after from $250,000 to the current $500,000.  The unlimited medical benefits in Michigan are interesting because the state requiring the next highest medical coverage only mandates $50,000 worth of medical benefits.  Auto insurance companies will have to pay yearly premiums of $175 for each car they insure, an increase starting July 1 from the current $145.  $141.93 of that is for paying claims, $32.72 goes towards the MCCA’s debt, and $0.35 is for administration.

Unfortunately, the $32.72 doesn’t go far in covering the $2 billion in debt that the MCCA has already incurred.  Last year, $927 million was paid out in catastrophic claims.  Due to Michigan’s generous lifetime medical coverage mandate, insurance companies are worried that they will have serious financial troubles if the MCCA becomes insolvent and they have to cover this lifetime medical care.  A House Bill introduced last year would eliminate required lifetime coverage and give options of $500,000, $1 million or more chosen by individuals.  The default maximum would be $500,000.  So far, the bill hasn’t gone anywhere.

The Michigan Association of Insurance Agents has some ideas that they believe would help ease some of the costs.  They think that a medical fee schedule for PIP insurance, similar to that used for Worker’s Comp insurance, would really help lower costs related to PIP insurance.  They think that there should be clarification in the reimbursement for medical care performed by family members, because some are getting paid for every hour of every day.  MAIA also believes there should be more clarity in what is considered “serious impairment” and “pain and suffering” because there may be some questionable claims.

Right now there is some work that needs to be done to help sustain Michigan’s auto insurance PIP coverage.  Whether the unlimited lifetime coverage needs to be changed or some of the other items associated with the coverage altered, we’ll continue to follow this story.