Smart Auto Insurance Blog

The day after the Super Bowl is typically all about the commercials.  Today is no different.  While I didn’t notice any commercials from auto insurance companies, I sure did notice a lot of them from the auto companies themselves.  I guess it’s nice that your auto insurance company isn’t spending millions of dollars to advertise during a 30 second spot, maybe to help keep your auto insurance rates lower.

Some of the auto manufacturers who ran Super Bowl commercials succeeded with the most talked about ads.  Volkswagen had to compete with their much loved Darth Vader commercial from last year and they used a dog to fill that void.  Chrysler’s Halftime in America spot with Clint Eastwood had people crying, thinking, and hoping for America.  Toyota, Cadillac, Audi, and Hyundai ran some of the other memorable ads from auto companies.

With all of the money spent on these ads, I wonder if auto manufacturers will see a large increase in sales.  If so, that could mean big business for auto insurance companies including an influx of new quotes on auto insurance.  More demand or changing demand for auto insurance could mean more competition from insurers and better rates for consumers.  So while auto insurance companies weren’t spending big money on Super Bowl commercials, that doesn’t mean that they won’t be affected by auto companies’ commercials.

There is a fairly unique system in place regarding auto insurance rates in North Carolina.  The Daily Reflector published an article by Gary D. Robertson of the Associated Press entitled, “NC lawmakers look at auto insurance risks, costs.”  This article explains the current debate in North Carolina over whether it is more important for overall auto insurance rates to be low or for individual drivers to pay more based on their risk.

About 20% of North Carolina’s 7 million insured car owners are in a high risk insurance pool.  Called the North Carolina Reinsurance Facility, the high risk pool is for drivers that cannot otherwise get insurance from companies because of their past history of riskier driving.  Rates are around 30% higher for those in the high risk pool, but 70% of those in the pool haven’t had any type of risky driving is over three years.  These drivers don’t pay the extra 30% premium, so their premiums fall flat of covering their expenses and losses.

There is a clear divide in the state as to whether this pool needs to be altered or dismantled.  Insurers like State Farm, Geico, and Progressive agree with trade associations that want the ability to better match rates with driver risk.  This would call for the elimination of the North Carolina Rate Pool, which sets the rates that North Carolina insurers are allowed to charge.  But Nationwide and other insurance companies think the system works well and point out that North Carolina has the 7th lowest insurance rates in the nation.  North Carolina’s insurance market is competitive, their insurers make profits, and their overall rates are low.  But many believe that their huge high risk pool needs some changes.

Written by Sara Smart

Follow me on Twitter: https://twitter.com/#!/SaraSmart55

The continuous stream of auto insurance commercials on TV bragging about their lower rates may have consumers believing rates are down.  Unfortunately, this is not the case.  Auto insurance rates have increased about 10% between 2008 and 2010 based on smartmoney.com’s report from the Insurance Information Institute.  It doesn’t stop here.  Rates are expected to rise further this year by around 4%.  In the last 10 years, rates have risen by 30% causing financial strain on millions of Americans.

The executive director of advocacy group Consumer Watchdog, Douglas Heller, points out that this is a very different picture than what is painted in the media.  Many consumers don’t even realize they are paying so much more for their auto insurance coverage.  Larry Thursby, vice president of personal auto insurance for Nationwide Mutual Insurance says it’s cost-based pricing and as costs increase for the insurers, price hikes are passed on to the consumer.

The article “Auto Insurance Rates On the Rise” by Jason Collazo on Forbes.com talks about how increasing medical costs are making auto insurance rates higher.  Exorbitant medical bills auto insurance companies have to cover for injuries due to auto accidents are making rates increase.  This is in addition to more expensive parts and more expensive labor.  These high rates are pushing more drivers to go without auto insurance even though that is against the law.  About 16% of drivers are currently unemployed, and this number could increase as rates go up further and the economy continues to struggle.

Written by Sara Smart

Follow me on Twitter: SaraSmart55

Hurricane Irene has devastated many areas of the US and its estimated that at least 18 people have died as the storm moved from the Caribbean all the way up to New England.  The article “Hurricane Irene’s Damage, State by State” by Drew Armstrong on Bloomberg.com states that about $3 billion in damages have occurred and power was out in over 6 million homes and businesses throughout the east coast.

State Farm Mutual Automobile Insurance Company is the largest US home and auto insurance company in the nation and they’ve reported about 1600 homeowners insurance claims and about 500 auto insurance claims in just North Carolina and Virgina.  The number of claims will surely increase over the coming weeks.  State Farm received reports of siding and roofs blown off of houses and much destruction from the falling of trees.  There have even been claims for loss of food since the power outages have made food in refrigerators spoil quickly.

In the New York area, where the storm had weakened, claims are standing at about 360 homeowners’ claims and 60 auto insurance claims, but this is only after a few days.  People are still getting settled and assessing damage before calling their insurance company.  Storms such as Irene can cause slight increases in auto insurance quotes to account for all of the claims, but this generally happens over time.  Insurers across the nation are working hard to fulfill claims as efficiently as they can to ensure costs do not soar.  Sometimes, when there are heavy claims filed, insurers are quick to give out money to save time.  Hopefully insurance companies were prepared enough for this storm that it will not happen this way across the board.

Written by Sara Smart

Follow me on Twitter: http://twitter.com/#!/SaraSmart55

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

Follow me on Twitter: http://twitter.com/#!/SaraSmart55

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

Follow me on Twitter: http://twitter.com/#!/SaraSmart55

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

Follow me on Twitter: http://twitter.com/#!/SaraSmart55

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>

Many states are still working under the no-fault auto insurance ruling and experts believe this is causing a crisis in the auto insurance industry.  The laws were originally put into place to stop ambulance chasing lawyers from submitting small-claims cases, and it helped car accident victims receive funds quickly instead of waiting for the determination as to who was at fault.

Unfortunately, these laws are backfiring since many believe its contributing to fraud, rising medical costs, large benefit payouts, and excessive lawsuits.  Auto insurance quotes in Florida are skyrocketing and many are blaming their no-fault laws according to “Why Does Everyone Hate No-Fault Car Insurance?” by Barbara Marquand on FoxBusiness.com.  Some insurance companies have actually limited their business in states with no-fault insurance laws since it ends up being so much more expensive for the insurer.  This ends up affecting competition and can drive up auto insurance rates.

Currently, 12 states and Puerto Rico have no-fault auto insurance laws including Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, and Utah.  The laws allow policyholders to collect funds for car accidents from their own insurance company regardless of who was at fault.  The laws also prevent people from suing for pain and suffering unless their injuries are a certain extreme.  Florida is the nation’s staged-accident capital and this of course drives up Florida auto insurance quotes.  Many industry experts believe no-fault auto insurance needs to be eliminated altogether or the crisis will continues and rates will keep going up.

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.