Smart Auto Insurance Blog

Florida has not had a hurricane for years, yet Florida auto insurance quotes continue to rise.  It’s been six years since the devastating Hurricane Wilma took it’s toll and since then every day claims for homeowners and auto insurance, including reopened claims, have risen 80%.  At this point insurers feel like there is not choice but to ask for higher homeowners and auto insurance rates according to the article “Soaring Claims Drive Florida Insurance Rates Higher” by Kenric Ward on SunshineStateNews.com.

Insurance companies are asking for rate increased for a couple of reasons.  First, there is a certain projection of future claims due to natural disasters and most states witness this type of increase.  Secondly, they are raising rates due to claims that have already been paid out that went above and beyond previous predictions.  Lynne McChristian, a Florida representative for the Insurance Information Institute confirms that these rate increases are due to future and past claims.

Just recently, Allstate Insurance Co and two of their affiliates asked for rate increases averaging 30%.  Castle Key Insurance Co. and Castle Key Indemnity Co. reported that there could be rates increases as high as 68% for individual customers.  These astronomical rate increases can devastate families financially, but it seems to be a no-win situation for everyone involved.  Some industry officials are blaming such increases on a new law, only affecting the state of Florida, which says insurers must pay full replacement costs for home repair upfront.  In addition to this, policyholders have up to five years to file a claim due to a particular hurricane which is throwing projections off.  The Insurance Information Institute reports that claims costs are increasing on average around 17% per year, and if this continues, no one will be able to afford a quality home or auto insurance policy.

Written by Sara Smart

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Industry studies continuously show Louisiana auto insurance rates to be sky high and this is frustrating residents more and more.  They want to know why this is happening and why they are subject to some of the highest auto insurance rates in the nation.  The article “Car Insurance Costs” by John DeSantis on HoumaToday.com, offers some insight as to why this is consistently the case.

If you talk to local auto insurance agents, many believe the higher number of lawsuits involving auto insurance claims is to blame.  This is just one of many factors, but this is a very direct reason why rates have been increasing.  Auto insurance fraud, auto theft, traffic congestion, and overall claims filed all play into auto insurance rates being generally higher in Louisiana.

Some Louisiana officials are working hard towards reform to keep costs down.  Specifically, there is one law being worked on to make it more likely for insurers to settle rather than to fight cases they may win.  The director of Louisiana Lawsuit Abuse Watch, a non-profit organization out of Baton Rouge, says a particular law requires that a claim of at least $50,000 or more be made before a jury trial is assigned to a case and she feels this is unfair.  She says this isn’t fair to auto insurance companies defending lawsuits because many cases end up in front of judges and wastes a lot of time and money.  She feels there are cases where the judge is more likely to find for the plaintiff, although this is not always the case.

Written by Sara Smart

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One Beacon Auto Insurance is one of 14 companies marked as high dividend growth stocks for earnings this month by Seeking Alpha.  On their website they included details with interactive charts and price indexes to help readers see the impact these companies are having overall.  The Kapitall interactive charts are truly fascinating as you press a “play” button to compare changes in analyst ratings over the past two years.

Specifically speaking One Beacon reported earnings for their surety and title insurance industry.  The market cap was $1.26B while official earnings are to be released at the end of July.  Dividend yield is at 6.27%, a payout ratio at 11.91%, and a current year dividend per share estimated at $1.53 vs TTM dividend per share at $.84.  This has been an impressive stock over the course of 2011, gaining 24.91% over the past year.

Another insurance group, Selective Insurance Group Inc for the Property and Casualty insurance industry also reported numbers to discuss.  They reported a dividend yield at 3.2%, payout ratio of 33.77% and a current year dividend per share estimate at $.62 vs TMM dividend per share at $.52.  The stock as overall gained 14.18% in 2011.  The article goes on to detail the other 12 companies with dividend and stock information in a very smooth, and easy to read format.

Written by Sara Smart

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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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Auto insurance fraud continues to be a major problem across the nation and it’s affecting how much everyone pays for their car insurance quotes.  With proper monitoring, it’s possible to decrease the amount of fraud out there but it needs to be a group effort.  South Carolina Attorney General, Alan Wilson, stated that about $12 million was reported in South Carolina alone last year in auto insurance fraud.  This was found in a recently released report according to the article by Jessica M. Karmasek on the Legal Newsline website.  This astounding number needs to come down but it’s hard to determine exactly how to do this.

Falsified claims are the number one cause of auto insurance fraud and this is why most auto insurance companies have a claim review team in place.  Suspicious claims are sent to an expert department for review and if considered possible fraud the claim will be investigated.  Unfortunately, the downside to this process is that not all of the suspicious claims are truly fraud so innocent people end up getting the run around when submitting a claim.

With online auto insurance quotes a popular method for obtaining auto insurance, it’s no surprise fraud on the internet is happening.  Most companies, including First Acceptance Insurance and Progressive, offer quotes online for auto insurance policies.  Checks are in place to ensure the policy being set up is for the right person and the right vehicle.  Credit report information such as social security numbers, addresses and date of birth are used to confirm identity.  This is not a perfect science either and perpetrators can even alter credit reports if access is obtained to the credit reporting agencies.  Hopefully, over the next few years, monitoring will improve and the amount of fraud will decreased, ultimately lowering our auto insurance rates.

Written by Sara Smart

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Car sales continue to be less than desirable for many car makers across the nation in 2011, but GM is looking to change that.  To stay competitive and offer something different, GM is looking to offer free auto insurance coverage to new car buyers according to the article on USA Today by Chris Woodyard.

Uninsured drivers is a problem across the nation, including states like California and Oregon.  These two states are the location of this free auto insurance test where people who buy a new GM car will receive a year long policy from MetLife Auto Insurance completely free of charge.  This will not only save a customer money, but will save them time searching for auto insurance quotes.  It’s a quality policy, including both liability and physical damage coverage and exceeds the auto insurance requirements for both states.  The offer is only good until September 6th and applies to 2010, 2011, and 2012 Chevrolet, Buick, GMC and Cadillac cars, crossovers and trucks.

GM hopes to bring in more buyers with this unique offer.  The policy will cover the car and anyone who drives it with the owner’s permission for the entire year from the date of purchase.  GM is still in the testing phase of this offer to determine if it will appeal to a wide group of buyers.  The owner does not have to renew the policy at the end of the year, but this could be a great opportunity for MetLife Auto to reel in more customers as well.  Very interesting concept and curious to see how it all pans out.

Many insurance companies across the nation felt the harsh effects of the spring storms throughout April and May including Donegal Insurance.  Donegal Group, INC, expects to feel a $13 million to $15 million hit in the 2nd quarter from all of the recent claims brought upon by the devastating storms the swept the mid-west and affecting many areas of the US.

The article “Donegal Sees $13M-$15M Effect From Claims” by Tim Stuhldreher on CentralPennBusiness.com points out that claims of about $7 million to $8 million will be paid due to mid-Atlantic hail and storm damages and another $4 million to $5 million paid to the South due to the tornadoes that hit this area.  Another $2 million is going to the mid-west for wind and hail.

Donegal plans on covering additional losses through their reinsurance programs.  This is to help the blow of the loss be less painful.  Their subsidiaries will give about $3 million to keep their reinsurance coverage throughout the rest of 2011.  Many companies have felt the impact of all of these home and auto insurance claims, but Donegal remains positive that they are handling the situation and their preparation for such events has paid off.

Written by Sara Smart
Follow me on Twitter: http://twitter.com/#!/SaraSmart55

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.