Smart Auto Insurance Blog

There are many myths out there about what may or may affect your car insurance quotes.  Although each company has different criteria for determining rates, in general there are 6 myths out there that are commonly misunderstood.  The article “Car Insurance Myths” in the news section of www.canada.com discusses them in further detail.

It is often thought that the color of your car will affect your car insurance quote, but most companies do not factor this in.  Some think that a 2 door car will automatically cost more to insure but that is not necessarily true.  If the car is more expensive to repair then your quote will be higher.  Bigger cars and more expensive cars are often quoted higher, but it doesn’t have anything to do with how many doors the car has.  Parking tickets do not generally count against you when getting a quote.

Speeding tickets can affect your rate, but not as much as some think.  First time offenders may have no change in their rates at all, and repeat offenders may be surprised to see their rate barely increase.  It’s often thought that only high risk drivers should shop around but this is not the case.  Regardless of your driving record it can save you to shop around since every company has different ways of computing rates.

According to the article “Texting While Driving Ban: Texting While Driving Laws Do Not Reduce Accidents” found on khabrein.info/news, a recent study shows that the recent bans on texting has not effectively brought accidents down in California.

The research was conducted by Highway Loss Data Institute, which is a non-profit organization supported by the auto insurance industry.  The research shows that the rate of accidents before and after laws were enacted in California have not significantly changed.  The study also pointed out that accidents in CA haven’t shown any significant changed in comparison to Arizona and Nevada where there are no bans on texting while driving.

The Automobile Club of Southern California finds the research interesting but they do not plan on accepting the study, citing that the samples were not large enough and the study is inconclusive.  It’s still known that any distraction while driving will put you at a higher risk of being in an accident, whether it’s texting, changing the radio, or programming a GPS.

There will be a voter initiative on the June 2010 ballot for Californians aimed at giving discounts to drivers who have had insurance for a long time according to the article “Californians To Vote On Auto Insurance Persistency Discount” by Patricia-Anne Tom on insurancejournal.com.  This discount would apply even if Californians switched carriers confirmed by the Secretary of State.

The Continuous Coverage Auto Insurance Discount Act will mean lower California auto insurance quotes for many but it’s facing criticism by consumer groups because the act will penalize drivers for not having previous auto insurance coverage.  The article says that the measure would legalize surcharges on auto insurance and penalize good drivers for accidents that weren’t necessarily their fault.  The group believes it could ultimately lead to more uninsured drivers on the road.

Kathy Fairbanks of CalFAIR says this ballot proposal will reward over 80% of responsible Californians who keep auto insurance coverage which is required by law by making them eligible for this discount even if they switch auto insurance companies.  Currently, the discount cannot be offered to new customers.  California drivers will be able to carry this discount with them if they choose to shop around for better rates and switch insurers.

According to the article “Keep Your Teen’s Car Insurance Rate Low” by Beatrice E. Garcia on The Chicago Tribune’s site, car crashes are the number one cause of death among teens in the US.  The fatality rates for teens between 16 and 19 years is 4 times more than those 25-69 years of age.  Based on this staggering statistic it makes sense that car insurance quotes for teen drivers are much higher.

There are some discounts available to teens that are important to be aware of.  Many car insurance companies offer good student discounts to teens with a B average or higher.  There are also discounts given to those with perfect driving records, which includes no moving violations or at-fault accidents for 3 or more years.

There are education courses available for teens and their parents which can make discounts available as well.  Some insurance companies offer discounts up to 25% off the original quote which can mean huge savings.  It’s definitely worth getting educated and understanding what kind of benefits your car insurance company offers your teens.

According to the article “Auto Insurance Customers Urged to get Breakdown Coverage” found on PrudentMinds.com, it’s extra important to have breakdown coverage through your auto insurance policy during the cold weather.

The article says that claim filings increase in the cold weather as road conditions are often hazardous.  In addition, cars are more likely to experience mechanical problems in the colder air.  The article also recommends making minor car checks before hitting the road such as oil level, anti freeze, hazard lights, tire tread and pressure, as well as ensuring you have a spare.  It’s also important to make sure your window wipers are working properly and you have sufficient wiper fluid.

In bad weather, there is a chance of being left in the cold for an extended period of time so it’s important to be protected.  It’s a good idea to keep safety items in your car such as a torch, warning sign, first aid kit, jumper cables, and a blanket.  Before you take a road trip in the wintry conditions, contact your auto insurance company to understand what type of breakdown coverage you have.

According to the press release “Federal Government Cracking Down on Texting While Driving” an Executive order put forth this year has banned all US government employees from texting on their cell phones while driving in government autos that are owned, leased or rented by the government.

Another part of this ban says these government employees cannot text in their own cars either if they are conducting company business or using company phones.  As of 2010, penalties are being placed on those breaking the rule.  This trend continues as over 21 states have laws banning texting while driving.  Most auto insurance companies, such as Dairyland Insurance, urge their policyholders not to text while driving.

The Virginia Department of Motor Vehicles reports that about 30,000 car accidents per year are because of distracted drivers.  About 100 people have been killed in these types of crashes and approximately 15,000 injured.  These staggering numbers are the reasons texting laws are being passed in many states and being encouraged by many auto insurance companies.

According to the article “How Does Cell Phone Use Affect A Cheap Car Insurance Quote?” by Sharon Gibson on youronlineinsurance.com, cell phone safety is a major concern for law enforcement.  More and more traffic incidents are caused by people talking and texting on their cell phones.  Cell phone usage is a huge distraction and directly affects your driving.

More and more auto insurance companies are offering discounts to drivers who are willing to drive safer.  You may get a discount for having a cell phone disabling system which is a device which blocks calls as well as text messages while you are operating the car.  Some companies will flat out ask you what your driving habits are in regards to cell phones.  Your answer may directly affect your car insurance quotes.

In today’s busy world it is becoming increasingly harder to put down the cell phone or personal digital assistant.  It’s important to realize the impact driving while using your phone can have.  Not only are you more likely to be an unsafe driver but it could end up costing you hundreds of dollars in insurance premiums over the years.

If Tiger Woods is following state law, he should have some type of auto insurance protection.  But, chances are, he can pay for his most recent accident out-of-pocket.  So the question is raised:  Should auto insurance be mandated for those who can afford to pay for accidents and medical costs out of their own pocket?

According to the article “Health Care Critics Look At Auto Insurance Mandates” by Kristen Wyatt on TimesLeader.com, thousands of drivers in the US do not carry auto insurance even though the law mandates it.  The insurance industry says that even though there have been about 40 years of mandates, the roads are not any safer and auto insurance costs haven’t been affected, so is the mandate bringing any value?  And should someone like Tiger Woods, who is extremely wealthy, be forced to carry auto insurance when over a lifetime it may be more expensive for him to do so?

According to the article “Tiger Woods claims car accident his fault alone; again calls off talk with state troopers,” found in the Cleveland Plain Dealer, Woods has admitted the wreck was his fault.  If Tiger files a claim with his auto insurance company it may affect his auto insurance rates.  Every consumer weighs the cost benefit of filing a claim with their insurer because if the claim is inexpensive it may not be worth the ramifications.

As to be expected, auto insurance rates are very high for teenage drivers because they are riskier since they are new and in the learning process of driving.  The article “A Crash Course On Auto Insurance” by Diane Giles on kenoshawnews.com points out that adding a teen to an auto insurance policy can double the yearly premium. 

Director of Insurance for the Consumer Federation of America, Robert Hunter, says that data on teen deaths and accidents is very bad.  It’s especially bad for young, male drivers and that is directly related to their auto insurance rates.  Auto insurance companies use this data to determine who is most likely to file a claim.  Car crashes are the number one cause of death among teens in the US.  A driver age 16-19 is 4 times more likely to have a fatal car crash compared to a driver age 25-69.  That is astonishing and extremely concerning. 

Experts agree that it is crucial for parents to get involved and educate their kids on driving safely.  Not only drugs and alcohol are distracting kids.  It’s also talking on the phone, texting, and loud and rambunctious passengers.  By having your teen contribute to their auto insurance bill it can encourage them to drive safely.  They need to understand the direct correlation between a clean driving record and the cost of auto insurance.

The state of California has seen suspected California auto insurance theft and arson fraud increase over the past year according to The California Department of Auto Insurance which released information on Friday.  This was found in the article “State Sees Rise In Suspicious Auto Insurance Claims” on Sacramento Biz Journal by Kelly Johnson.

The agency recently gathered data that showed criminals may be committing more auto insurance fraud to obtain insurance cash during these tough times.  Insurance Commissioner Steve Poizner stated in a news release that fraud is on the rise.  In 2008, the California Department of Insurance found a 25% increase in suspected car arson fraud cases from the year before.  They also received about 200 more suspected car theft fraud cases in 2008 compared to 2007. 

The department receives regular referrals of suspected fraud from auto insurance companies, law enforcement agencies as well as consumers and each case is researched to determine if it is actually a fraud situation.  Other kinds of auto fraud such as inflated damages, vandalism, and hit and run accidents have remained somewhat constant since 2007 according to the Department. 

This increase in suspected fraud may continue as the recession remains.  Consumers are feeling strapped for cash and desperate and this seems like the only road for many.  Of course, any type of fraud will end up costing you much more in the end, including possible jail time.