Smart Auto Insurance Blog

New Jersey auto insurance consistently ranks as one of the highest states for auto insurance rates and regulators are looking to curb some of the rising costs through new regulations.  The article “What the New Car Insurance Rules Mean for NJ” found on NECN.com answers some of the top questions New Jersey residents have about how the new regulations will affect them.

New Jersey auto insurance is looking at a big overhaul from the proposed regulation changes for the personal injury protection component of auto insurance policies.  The changes will essentially change how and what physicians can charge for treatments and there will be a restructuring of the process for appealing a denied claim.  This is all in hopes that rising premiums will be slowed down and New Jersey auto insurance will become more affordable.

The article is very useful in answering questions many residents have.  It answers some details about personal injury protection and outlines why the system needs a makeover at this time.  The changes to medical services are discussed and gives an understanding of the changes being made to the approval and dispute process that New Jersey has long known.  Insurers will be benefiting from these changes in addition to the consumer so hopefully this encourages auto insurance companies to support the proposed changes and regulations are put into place quickly.  The regulations are not quite a done deal since the public has until the end of September to comment and a decision will be made at that time.

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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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 happen to find yourself in need of a quick SR22 insurance filing many companies can do it for you immediately including Eastwood Insurance headquartered in California.  This is particularly important if you need this information filed by a certain date to get your license or to ensure you have the proper auto insurance coverage in place by a certain time.

An SR22 is a certificate of insurance filed by an auto insurance company or insurance agent directly to the state in either an operator’s certificate or an owner’s certificate.  There is also an operators-owners certificate option.  SR22 isn’t exactly a type of insurance which often confuses consumers.  It is the name of a certain form insurance companies need to file for certain policyholders.  Not all states require SR22 but it is often required if your license has been suspended or revoked.  This makes the SR22 associated with high risk drivers who have somehow broken the law or had an exorbitant amount of violations.

It’s very important to get the SR22 form filed correctly if you are required to do so.  The SR22 insurance certificate is to certify coverage to the Division of Motor Vehicles in a particular state.  The insurance company is then required to notify the Division of Motor Vehicles in the case of the policy being cancelled, terminated, or if there are any lapses in coverage.  If you find yourself needing this type of form filed, check with your insurance company to see if this is something they offer.  Not all auto insurers file this paperwork so you will have to confirm yours does.

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.

According to the article “Florida Senate Panel Advances Auto Insurance Bills” by Brent Kallestad on Business Week’s website, two Florida bills aimed at cutting down the amount of fraud running rampant through Florida moved passed an important Senate panel.  The Senate Banking and Insurance Committee barely approved the bills after some debate between lawmakers.

Legislature is trying to get a handle of the amount of auto insurance fraud that is frustrating insurers enormously.  The bills move forward after being backed by the insurance industry which would give them more power to deny claims they deem suspicious for fraud.  A similar bill is moving through the Senate as well.  Florida auto insurance quotes are impacted by the amount of fraud going through the state, so hopefully as fraud decreases so will auto insurance quotes Florida.

The bills are guaranteed to pass.  Mark Cedarberg, an Orlando lawyer, cautions lawmakers about giving the insurance companies too much freedom.  He believes that if the bills pass it will make it harder on honest people, including honest doctors who need to be paid.  Once an auto insurance company decides to deny a claim it will be challenging to get it reversed.  Insurers, medical providers, and lawyers all agree that fraud is too prevalent, but they can’t agree on the best solution to fix the problem just yet.

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.

The Wisconsin auto insurance bill mentioned in the previous blog has been passed according to the article on BadgerHerald.com by Andrew Averill.  The bill will lower coverage limits for auto insurance which were originally raised in an attempt to save consumers money, but the Democrats have other suggestions to repair the budget.

Currently the law requires auto insurance companies to cover $50,000 for accidents causing bodily injury, $100,000 for two or more persons and $15,000 for property damage.  The limits will be changed to $25,000, $50,000 and $10,000 respectively with the passing on this new bill in Wisconsin.  Assembly Speaker, Jeff Fitzgerald, believes the previous law raised auto insurance rates for families and limited choices to the consumer shopping around to compare auto insurance.

Fitzgerald also goes on to say that the new bill will help consumers decide for themselves what level of coverage is best for their family, and it should make auto insurance more affordable for lower to middle class income families.  He believes it’s the perfect blend of consumer choice and consumer responsibility.  Others argue that the new bill will take away some consumer protections, but now that’s it is going to be signed into law people are focusing on the positives and hoping for the best.

The Wisconsin Assembly is voting today on a bill which will eliminate some of the higher minimum levels for auto insurance that Democrats put in place back in 2009.  Wisconsin would still have to purchase Wisconsin auto insurance, but supporters say consumers will have lower auto insurance rates and more options to choose from if all goes as planned.

According to the article “Assembly Set to Roll Back Auto Insurance Levels” found on WTAQ.com, critics of the bill say accident victims could be left with a larger bill because their damages would be more than the person’s auto insurance policy coverage.  The bill would end some major consumer protections as well.  If would end “stacking” which is where a driver can use liability on up to 3 of their cars to claim damages when one car gets in an accident.

This bill would also bring back reducing clauses.  This measure reduces a policyholder’s benefits for drivers who are under-insured and high risk drivers would be placed into a class by themselves with high auto insurance rates than others.  The Governor of Wisconsin, Scott Walker, supports the measure and it will be soon determined which way the vote will go.  Many states are facing similar decisions with their auto insurance laws, but Wisconsin is proactively trying to make changes.

For many years, auto insurance companies have been using a consumer’s credit score to help determine risk and calculate auto insurance quotes.  It has been debated by industry experts and consumer advocates whether or not this is fair and whether or not it makes sense.  Most auto insurance companies agree that this is an accurate way to determine risk, and study after study shows that riskier drivers tend to have lower credit ratings.

The National Association of Insurance Commissioners has been probing insurers continuously about their credit score use and the auto insurers are defending themselves.  This is according to the article “Auto Insurance Companies Defend Use of Credit Scores” found on Insurance NewsNet.com.  With a struggling economy, the issue is even more hot.  People with once excellent credit scores are finding themselves out of work and paying late on bills which is affecting their credit.  Double whammy once they receive an auto insurance quote and see their rates have increased due to the drop in their credit score.

The use of credit scores is supported by most states, which use a model from the National Conference of Insurance Legislators.  Louisiana commissioner of insurance, Jim Donelon, says he doesn’t see anything wrong with the practice and he attended a public hearing with the NAIC’s Property and Casualty Insurance Committee where auto insurance companies defended their use of credit scores when determining auto insurance rates for customers.