Smart Auto Insurance Blog

Toyota is still feeling the brunt from their huge recall of defective cars across the nation.  Seven auto insurance companies are filing suit against Toyota Motor Corporation to retrieve funds they paid out in claims cause by the accidents attributed to the Toyota cars’ defects.  This is according to the article “Seven Additional Car Insurers Sue Toyota” by Naota Hayashi on Automobile.com.

RIght now the National Highway Traffic Safety Administration is looking into claims that about 89 accident deaths since 2000 may have resulted from sudden acceleration in certain Toyota cars.  Toyota could face up to $10 billion in civil liability in the US courts from wrongful death, consumer fraud, and personal injury.

A recent litigation filed in Los Angeles County Superior Court, makes claims related to those in other cases filed in other areas that Toyota disregarded and tried to hide the defect that caused several engines to accelerate, and did not put in a particular brake override technology that may have prevented crashes.  The seven auto insurance companies are requesting minimum compensatory damages of $188,000.

According to the article “Vehicle Thieves Rarely Take a Holiday” found on CarInsurance.com, the most cars are stolen on New Year’s Day and Halloween.  In 2009, New Year’s Eve was once again the leader in car thefts based on an analysis by the National Insurance Crime Bureau.  Christmas Day continues to be the day with the fewest cars stolen.

Thieves are not respecting holidays the way most Americans are.  They do seem to have some sort of respect for Christmas Day which is interesting, but other holidays, thieves are out and about looking for targets to steal.  Of the 11 holidays looked at in 2009, a total of 22,991 cars were reported stolen while 24,676 cars were stolen total in 2008.

The good news is that car thefts have been steadily decreasing for the past six years, possibly seven with the preliminary 2010 FBI Theft Data coming out soon.  It’s important that car owners remain aware and take the necessary precautions to prevent car thefts even though the crime is down.  Quotes on auto insurance can even fluctuate based on how likely it is your car type will be stolen.

Bristol West Auto Insurance, along with many other auto insurance companies are getting hit with fraudulent claims.  According to the article “Report: Staged Car Wrecks On the Rise” by James Hart on blogs.kansascity.com, there has been a 40% jump in car accidents since 2007 staged on purpose with the sole purpose of ripping off insurers like Bristol West.  This statistic comes from a report from The National Crime Insurance Bureau.

Many of the fraud accidents are committed by all knowing parties, but sometimes the perpetrators target innocent drivers.  To avoid becoming a target, follow these simple tips:

• Avoid tailgating
• Always call the police immediately if you are involved in an accident
• Use your phone camera to document any damage as soon as it happens
• Never admit fault

Protecting yourself on the road is very important and knowing this type of fraud is going on can help you be more prepared if you are involved in an accident.  Avoiding the accident altogether is obviously ideal so your car insurance quotes are not affected.

According to the article “New York No-Fault Auto Insurance Leads to Inflated Claims” by Ryan Fields on e-wisdom.com, New York auto insurance could be experiencing higher rates because of their insurance model.  New York is one of many states in the US using the no-fault auto insurance system.  The purpose of this type in insurance model is to reduce costly legal costs from deciding who is at-fault for an accident.

Since no-fault auto insurance has auto insurance companies paying out claims directly to their customers regardless of fault, fraud can be an issue.  According to the Insurance Information Institute, about 20% of each no-fault auto insurance claims made are fraudulent.  That adds up to approximately $1561 per claim and cost insurers and their customers over $600 million since 2005.

Chief economist, Dr. Steven Weisbard, ties the increase to medical providers who submit claims that are much higher than they should be.  He says the amount of fraud in New York’s auto insurance system is so severe that payouts for claims are currently the 2nd highest they have been since the late 1990’s.  This excess translates to higher auto insurance rates for drivers in New York obtaining auto insurance.  Costs rise for everyone as fraud claims rise.

Auto insurance companies are getting more and more strict with paying out claims as the recession is forcing consumers to request more money to cover damages.  This is according to the article “Under-Insurance Hitting Thin Wallets” by Roeland Van Der Bergh on stuff.co.nz.

Another downside to this economy from the viewpoint of the auto insurance company is the rising rates of insurance fraud according to the article “Recession is Fueling a Boom in Insurance Fraud” found on the Times Dispatch website.  This increase in fraud is keeping state regulators and law enforcement very busy across the nation.

A recent survey conducted by the Coalition Against Insurance Fraud of 37 state insurance fraud bureaus found that the down economy has had a significant effect on the amount of fraud.  The bureaus reported an increase in fraud referrals and new investigations in all 15 categories of fraud covered in the survey.  Other tough financial times such as the influx in gas prices a few years ago.  As gas prices went up, so did the number of automobile fraud cases where people fraudulently reported their cars as stolen, or destroyed just to get the insurance payout from the auto insurance company.  People will do extreme things when faced with financial adversity.

Back in February over 100 car owners were shocked to discover their cars’ computer systems were hacked into according to the article “Does Your Car Insurance Cover Hackers” by Liz Taylor on Cheapercarinsurance.com.  The car owners had their cars uncontrollable honking and some being disabled.  The police have since caught the culprit, but many are left wondering who is going to fix the car’s security system?

The remote, no-start system has pros and cons to begin with.  The high-tech systems allowed car companies to offer loans to higher risk customers because they could simply “turn off” the car if payments weren’t made.  Unfortunately, this may put financial strain on already high-risk customers.  The system allows honking to remind customers of payments due, locating the car if it is hidden, and disabling the ignition to ensure the car cannot be driven.

With this new technology, there is obviously a higher risk for computer hackers messing with cars.  Car insurance companies are being forced to address this issue in their policies and protect their customers from such cases.  Check with your insurer and see if you are protected.  If not, it may be time to shop around for car insurance quotes for a full benefit package, protecting you from this new crime.

Identity fraud is a growing problem with the rise in popularity of Internet quotes on auto insurance and online banking.  Although victims can end up not being liable for lost money, it can be very pricey for the victim to prove their innocence.  Their credit rating can also be destroyed which may take years to repair.

Many insurance companies are offering protection to their policy holders to help them avoid this disaster.  Encompass Car Insurance is one of those companies and on their website they outline what their Identity Fraud Protection covers.  They will pay up to $20,000 for expenses incurred as a result of identity theft.  They will also cover lost wages up to $500 per week for up to 4 weeks for time away from work because of the fraud.

Some other benefits of the products are covered loan fees if you are denied a loan due to incorrect information caused by the fraud and any new application fees incurred.  With prior approval from Encompass Car Insurance they will also pay for reasonable lawyer fees.  If a lawyer is used to defend you against any lawsuits are filed against you by any merchants or collection agencies, Encompass will help you.  This is an extremely valuable benefit to have through your insurance company, and not all companies offer it.  Be sure to look into what kind of protection you may have.  It could save you a lot of time and money.

According to the article “Five Auto Insurers Must Recalculate Customer Bills” by Johnny Diaz on boston.com, the Massachusetts Attorney General settled with 5 Massachusetts auto insurance companies that might have charged higher rates to policy holders because of driving record information that was inaccurate.

The state of Massachusetts says the auto insurance companies failed to update at-fault information reported to The Comprehensive Loss Underwriting Exchange.  This is a private database which is used to determine driving histories.  The error may have resulted in higher premiums for some of the customers with these 5 companies.

The auto insurance companies will need to pay the state over $100,000 within 10 days as part of the settlement.  They also must identify affected customers within 120 days and recalculate their rates.  If this problem was not caught as soon as it was, quotes on auto insurance may have been inflated for these certain customers for years to come.

Wisconsin is now requiring all drivers to carry auto insurance and with increased coverage, it could mean increased premiums.  According to the article “Auto Insurance Changes for June” by Kristin Crowley on fox11online.com the law that was meant to increase driver safety may backfire.

As coverages for Wisconsin auto insurance increases so will premium costs, which may cause more people to go without auto insurance.  This goes against the whole reason for the new law in the first place.  Wisconsin Insurance Alliance President Andy Franken states that about 14% of Wisconsin drivers are currently uninsured.

It is still to be determined how premiums will be affected by the new law, but one thing is for sure.  If you choose to drive without insurance it’s going to cost you.  The Wisconsin Department of Motor Vehicles states that driving without insurance will cost up to $500.  Even more expensive is fraudulent insurance issues which will be fines up to $5,000.

According to the article “Pennsylvania Attorney General Charges 24 People With Auto Insurance Fraud” by Mark Mendell on topnews.in, 17 New Yorkers and 6 New Jersey residents claimed to be PA residents to obtain lower auto insurance rates.

This is a very serious offense and is definitely classified as insurance fraud.  Pennsylvania Attorney General, Tom Corbett, said the rate manipulation leads to $12-$15 million in claims on PA policies that affects the auto insurance rates of all the other drivers in the state.

Pennsylvania auto insurance quotes are significantly lower than rates in NY and NJ so it’s no surprise people would try to cheat the system to save a lot of money.  PA officials are taking this fraud very seriously.  The PA Attorney General spokesperson, Nils Fredericksen, says that the 24 defendant each face up to 7 years in jail and $15,000 in fines.