Smart Auto Insurance Blog

Check out our update to this blog.  Hint: voters in California voted the same on Prop. 33 as they did on its predecessor Prop. 17.

Two years ago, voters in California turned down a Proposition very similar to this year’s Prop. 33.  Erik Anderson of KQED in California talks about both sides of Prop. 33 in “Prop. 33 Asks Voters to Reconsider How Auto Insurance Discounts Work.”  If Prop. 33 passes, auto insurance companies will be able to offer better discounts to drivers who have consistently carried insurance for 5 years.  That means that around 80% of drivers would be able to receive significant discounts on their auto insurance simply by maintaining insurance coverage without interruption for 5 years.  Some exceptions have been made to separate Prop. 33 from the failed Prop. 17.  Military members, people who have lost their jobs, and children who were living with their parents will not face steeper car insurance rates if they haven’t maintained 5 straight years of insurance coverage.

But California drivers who don’t meet those exceptions will face much higher auto insurance rates if Prop. 33 passes.  Opponents says that 20% of the drivers in California will be financing the discounts for the other 80% of the drivers.  They say that there was a good reason for the law passed 24 years ago prohibiting auto insurers from offering discounts based on insurance coverage history.  They currently have to base pricing on the driver’s driving record, how many miles they drive, and how long they have been driving.  One concerned voter worries that their rates will be high when they voluntarily sold their car and used public transportation within the past 5 years.  Why should they be penalized for not maintaining auto insurance when they didn’t have an auto to insure?

As he was with Prop. 17, Mercury Insurance owner George Joseph is the main proponent of Prop. 33.  He is also offering up much of the funding.  He says that it will increase competition in the auto insurance market, which is good for drivers as well as most insurance companies.  Proponents say that Prop. 33 will reward drivers in California’s auto insurance market who have maintained their insurance.  It also allows drivers to switch companies and get lower car insurance rates because the discount is portable.  It can be difficult to tell whose best interest is at the forefront in political debates and Prop. 33 has made auto insurance political.  California drivers need to do their research and vote this November to make sure that what they would like to see happen with Prop. 33 has the best chance of being the outcome.

Around 1% of those with auto insurance are using usage-based programs to try for discounts on their auto insurance premiums.  But according to NASDAQ’s “The rise of usage-based auto insurance,” that number is rising.  In the next five years, some estimate that as many as 20% of drivers could be using usage-based programs.  They even predict that 30% of drivers will be using them by 2020.  Usage-based insurance, or UBI, allows your auto insurance company to place a device in your car to monitor your driving habits.  They can determine when you drive, how often, how far, how fast you are accelerating, as well as your braking habits.  Companies advertise discounts of up to 30% when you use their UBI, if you are found to have safe driving habits.

When asked, drivers said that they are happy to give up some privacy in exchange for a discount on auto insurance rates.  Between smart phones and Facebook, people are used to giving up some of their privacy, so they willingly participate in UBI services.  In fact, companies who are not currently using this technology, or at least in the development process, are pretty far behind and risk losing some customers.  At some point in the future, drivers may end up paying higher premiums if they don’t allow their insurer to track their driving habits.  It’s unlikely that insurers will force drivers to share UBI information, but collecting this data will likely become the norm in the future.

Here is a summary of some of the companies offering usage-based insurance.  First of all, you do have to have a car that is newer than a 1996 model.  Drive Wise is offered in three states by Allstate, but they plan to expand the program later this year.  American Family Insurance has tested their product and is currently developing a plan to implement it.  Esurance has teamed up with Sprint to collect UBI data, but it is only available now in Texas.  GMAC collects data through OnStar.  The Hartford insurance works with Octo USA to collect data for their TrueLane program, currently available in five states.  Progressive’s Snapshot is available in most states and even non-customers can try it out.  Travelers has started using IntelliDrive in four states.  Safeco offers the Rewind program to some customers who are trying to avoid rising premiums after violations.  State Farm’s Drive Safe & Save program also works with OnStar and is available in 14 states.  Have you taken advantage of UBI yet?

Aviva auto insurance in the UK is using technology to help its customers lower their auto insurance rates.  This technology is similar to that being used by Progressive and other car insurance companies in the US who are monitoring driving habits, but with one big difference.  Aviva is monitoring customers’ driving habits through their Android smart phones.  The company has already been testing this new process on their employees, but is looking for 5,000 volunteers to help in the testing process.  This information comes from The Guardian’s “Aviva to trial smartphone car insurance technology,” by Hilary Osborne.

In the past, Aviva auto insurance used black box technology to monitor driving habits.  Black boxes are installed in vehicles to track driving habits like braking, following, and speeding.  Drivers who demonstrate safe driving habits are eligible for a discount on their auto insurance premiums.  This new technology allows monitoring to occur straight from a driver’s smartphone, making it much simpler to begin the program.  Research has shown that this telematics technology not only helps customers reduce their car insurance premiums, it really makes for safer drivers overall.

Your first 200 miles of driving will be monitored after downloading Aviva’s RateMyDrive application.  Once your driving habits are monitored, you are assigned a score that will determine your auto insurance premium.  One stipulation is that it won’t really help you if your rates are low to begin with.  Drivers labeled safe can receive a 20% discount on their premiums, 10% if they are already paying a rate predetermined as low.  But those with the lowest premiums already will not receive an additional discount.  If for some reason your driving is not deemed safe after you have been monitored, you will maintain a standard Aviva car insurance premium.  Look for more US companies to use smart phone technology to monitor driving habits soon.

Auto insurance companies are always competing to win business, but MetLife had more in mind when they started their new “Teens on the Road to Safety Program”.  This program is specifically designed to encourage young drivers to make safe driving a priority.  The press release on Business Wire details how the program is expected to work.

MetLife Auto Insurance knew something needed to be done to reign in the number of accidents being caused by teenagers on the road.  One in three teenage deaths occur in car crashes and MetLife believes that can be prevented through education and awareness.  The program encourages young drivers to stay safe on the road by offering drivers who go a full year without accidents, claims or moving violations a $50 gift card from American Express.  If their commitment to safe driving continues, they can earn another $50 gift card the second year they avoid accidents, claims and moving violations.

In order to be eligible for the program, teens must complete 20 driving trips weekly with a guardian and submit a list of the trips to MetLife.  MetLife Auto Insurance has learned through research that practicing good driving skills with an experienced driver is an effective way to become safer on the road.  This will ultimately decrease the number of teen deaths on the road.  The program is available to 16 and 17 year olds who are covered under MetLife and live in a participating state.

Written by Sara Smart

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If you are already in the military you probably already know about the amazing benefits USAA Auto Insurance gives to their members.  What a lot of people do not realize is that you can become a member of USAA if you have a parent or spouse in the military as well.  Even if they are retired, your military parent or spouse can get you into USAA and you can start reaping the benefits of low rates, superior customer service and top quality products.

You can save hundreds through USAA according to their website.  The average person saves about $450 per year when switching to USAA.  If you own another USAA product such as a checking account or a homeowners policy you could end up saving even more.  They offer accident forgiveness for good drivers for as little as $1 per month.  There’s also good student discounts as well as safe driver savings.  USAA offers flexible payment options at no additional charge, and you can pick your own pay schedule.

USAA has been honoring our military men and women and there families for years by offering such top quality products with easy access and guaranteed renewal.  Additional perks such as roadside assistance, award winning claims services and multiple discounts makes USAA one of the top auto insurance companies and should definitely be considered if you are eligible.  It’s good to know our military has a place to go to ensure they are getting a great deal and being treated with the utmost of respect.  They definitely deserve it.

Nevada auto insurance quotes are too expensive for many residents in the state, and Assemblyman Kelvin Atkinson saw the need for the poor to get some help.   According to the article “Opposition Emerges to Bill Offering Low-Cost Auto Insurance to Poor” by Cy Ryan on The Las Vegas Sun website, Atkinson developed a bill to begin a low-cost auto insurance program for those living below poverty level in Clark County.

Although his intentions are good, Atkinson is meeting with some opposition to the bill from the Republicans.  Sen. Michael Roberson, R-Las Vegas isn’t for the bill stating that a similar plan has been tried in California and is not working.  Other Senators such as Sen. Mike Schneider, chairman of the Senate Committee on Commerce, Labor and Energy appreciates what the bill is trying to accomplish and sees the need to help the working poor afford auto insurance quotes.

The bill proposed by Atkinson would offer auto insurance at lower costs for those 250% below poverty level.  The State Insurance Division said approximately only 1000 drivers would sign up for such a program.  Joe Guild from Farmers Insurance said the bill would probably only save a driver $50 on a policy which may not make an impact.  With the uninsured motorist population at 19% according to the SAGE Commission, something needs to be done.  Rates have continued to increase making it harder and harder for the poor to afford to have proper coverage.

Most car insurance companies, including Progressive and American Commerce, have their own calculation for determining car insurance quotes.  You may feel like the rate you end up paying is out of your control but that isn’t necessarily the case.  There are numerous factors insurers use that are within your control and knowing what they are can help you save money.

The biggest factor is often driving record, and although you cannot do anything about the past, you can control your future driving habits and wait until previous driving violations fall of your records, which they eventually do.  You can have a clean slate with a little patience and careful driving practices.  Another big one these days is credit rating.  Again, the past is the past, but derogatory marks fall off your file in about 7 years, and focusing on paying your bills on time and keeping your debt levels down will pay off in the long run.

Of course what type of car you drive is going to have a huge impact on your car insurance quotes.  In general, the more expensive the car the higher your quotes will be.  Take a serious look at how big of a car you need, and how important luxury really is considering the overall costs.  Not only will that actual car cost more money, but maintenance and insurance will be higher.  The extra money can add up to a lot over the years.

And make sure you are shopping around for the best rate.  Just because one car insurance company gives you a hefty price, doesn’t mean they all will.  Get at least 3-4 quotes, if not more, and compare any trends you may see.  You’ll also want to make sure your coverage is sufficient and meets your needs.

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.

It’s well known that you can get car insurance quotes from Donegal Insurance, but many people do not realize how easy it is to get boatowners insurance coverage.

Donegal Insurance offers many types of insurance products, one of which is boatowners insurance protection.  Boatowners insurance provide the extra coverage you need to ensure your boat is protected.  Donegal covers the entire boat from bow to stern and provides coverage on water or land.  Their policy extends to motors, controls, electric equipment, and standard fuel equipment.  They ever cover extras such as boat oars, anchors, life preservers, and additionally a boat trailer.

Legal liability is taken care of with boat liability and medical payment coverage.  Coverage is extended in the case of a boating accident and there are many other optional coverages.  Some of these options include Boater’s Emergency Towing and Labor, Boat Replacement Cost, Uninsured Boaters Protection, and Boater’s Personal Property Coverage.  You can even get discounts through boatowners insurance.

Specifically noted on Donegal’s website are discounts for the completion of certain safety courses, built in fire extinguishing systems, depth finders, and of course if you have other insurance products through Donegal Insurance you can find yourself with an up to 10% off discount on your boatowners insurance.

We are bombarded with car insurance information all the time and it can often be challenging to sort out the facts from fiction.  According to the article “Experts Dispel Common Auto Insurance Myths” by Larry Printz found on The Ledger, AAA and the Insurance Information Institute have gathered the top car insurance myths out there right now and work to set the record straight.

The first myth is that red cars have higher car insurance quotes.  Color typically is not used when car insurers calculate quotes.  The second myth is that insurance costs increase as you get older.  Often times the opposite is true that rates decrease with driving experience.  The elderly can even take courses which will earn them discounts on their car insurance.

The next myth has to deal with your credit score.  Some people think it has no bearing on car insurance but it usually does.  If you have trouble paying your bills, car insurance companies can worry about you paying your premiums and some studies have shown a link between driving record and credit rating.  The fifth myth discussed clarifies that your policy does not automatically cover you for theft or damage to your car.  You have to carry comprehensive and collision.  Another myth is that the car insurance policy does not follow the car but it does.

One myth circulating is that soldiers end up paying more for car insurance, but this is not the case.  Many auto insurance companies actually offer discounts to military men and women.  The final myth says car insurance will cover you for business use of your car.  Depending on your situation you could find yourself uncovered if you happen to be using your car for business purposes, so double check to see what is included in your policy if you do use if for work purposes on occasion.

Hopefully dispelling some of these auto insurance myths out there will help consumers make more educated decisions and will carry the coverage that works best for their individual situation.