Smart Auto Insurance Blog

Last month, we talked about California’s Proposition 33, which went to vote along with the Presidential election on Tuesday.  Prop. 33 would have let auto insurance companies offer discounted rates to drivers who have maintained a long history of coverage, regardless of which company was covering their vehicle.  The San Francisco Chronicle’s Drew Joseph gives us the results of California’s vote in “Prop. 33: Car insurance changes defeated.”

Insurance companies are able to offer lower car insurance quotes to drivers who have maintained insurance coverage with their company, but continuous coverage discounts were not allowed to be transferred to another insurer.  Voters have rejected Prop. 33, so nothing will change in that respect, much to the dismay of Mercury Insurance’s George Joseph.  He offered $16.9 million, or 99% of the funds used to campaign for Prop. 33.  Opponents of the Proposition raised less than $300,000.

Two years ago, Prop. 17 asked Californians to pass a similar law regarding the transfer of car insurance coverage discounts.  That failed as well, although it was close to passing.  George Joseph of Mercury and other supporters said that even more residents would get insurance discounts with Prop. 33 than would have with Prop. 17.  But opponents of both issues said that too many people would be punished with higher auto insurance premiums to make up for the discounts offered to others.  They pointed specifically to the large amount of unemployed Californians that may be without auto insurance for a significant period of time.  The discounts offered to some drivers would have to be financed by others getting punished.  It remains to be seen whether Prop. 33 will be put on the ballot again under a different number, but George Joseph seems to have a lot of funds to put towards his cause.

I just read an article insinuating that car rental companies might actually be forging your signature to add car insurance to your rental that you didn’t even want.  Most car insurance companies cover a rental car if you need one while yours is getting fixed.  But car rental companies make money off of the additional things they charge you for, so there have been recent allegations that some rental companies are charging you for car insurance you don’t need or want.  Recently, Dollar Rent A Car at the Denver airport was accused of charging a Florida man for car rental insurance without his permission.  This information comes from The Seattle Times article “Is rental-car insurance a scam?,” by Christopher Elliott.

Dollar insisted that the Florida driver had signed his consent for $215 in car rental insurance and $53 in roadside assistance for the rental car he drove for a few days.  When the charges were disputed, Dollar sent a form letter to the driver.  But he also disputed the charges with his credit card company and they believed him and refunded his credit card.  Dollar sent a copy of the supposed signature adding the extra coverage and this particular driver says that it was forged.  Not only did he not sign opting for the extra charges, he didn’t even need that coverage because he had personal auto insurance to cover rental cars as well.

A lawyer and consumer advocate told The Seattle Times that there have been hundreds of other consumers saying that this same thing has happened to them.  Unfortunately many consumers give up after their initial dispute and pay the bill because they don’t think they have a chance to fight any further or don’t want to spend the time fighting in court.  Since there is no type of legislation or regulation on this matter by the federal government, car rental companies don’t have much concern over lawsuits here and there.  Employees working for minimum wage are often pressured to up-sell extra coverage and receive large commissions.  With e-signatures becoming the norm, car rental insurance fraud and other car rental extras might be easier for these employees to pull off.  Read everything you sign and keep copies, especially when it comes to dealing with companies that have a history of fraudulent complaints.

After reading The San Francisco Chronicle’s “What insurance companies can do to you” by Jon Carroll, I am left scratching my head.  It’s quite apparent that comparing auto insurance companies is more important than ever, not only for good premium prices, but to find a company with ethical practices.  The author received a legal form letter from his auto insurance company after filing a claim detailing Insurance Code 790.03.

The code has long, wordy sentences that seem to go around in a circle without really getting to a definitive point.  Carroll says that it basically infers that auto insurance companies should not lie to their consumers or cheat them at all.  But it is quite vague and doesn’t say that insurance companies should never lie or cheat.  It states that they shouldn’t do it as a common practice.  It’s almost saying that it is okay to deceive consumers once in awhile, just not regularly.

Sixteen items are listed on the form detailing what California auto insurance companies should not do.  One of the items says that insurers should not push consumers to take legal action in order to receive their settlement if the court will simply deem that what the consumer was fighting for was actually a fair amount.  To me, the chances that someone will take an insurance company to court to prove they were expecting a fair amount of reimbursement is absurd.  That costs a lot of money.

There is even a code saying that insurance companies shouldn’t alter your paperwork, making it so that you don’t get paid as much or at all.  The author points out that this should actually be fraud or illegal, not simply a frowned upon practice.  The bottom line is that you want to make sure you choose an auto insurance company that is ethical and follow all of your claims closely.  Let’s hope that these Codes don’t actually need to be used by many consumers in fighting their insurer.

UPDATE 8/7/2012

A few months ago, we wrote about the changes being made to Florida’s auto insurance laws.  A MarketWatch press release shows how disappointed many Floridians and consumer groups are with these changes.  In “Opponents blast auto insurance reform, medical care cuts,” we learn that many opponents of Governor Scott’s auto insurance changes believe that they are only in the best interest of auto insurance companies.  Governor Scott disputes those claims and says the main purpose for these changes is to cut down on fraud and eventually lower Florida’s cost of living.

In July, around 150 new laws took effect, including the limitation of medical benefits that will be paid out and the stipulation that injuries must be reported within 14 days of a car accident.  The government in Florida says that the $1.4 billion that personal injury protection claims have increased over the past 4 years is largely due to fraud in the insurance market.  Now that PIP benefits are capped at $2,500 unless an “emergency condition” is reported by a valid medical professional, Governor Scott believes there will positive strides in Florida’s auto insurance marketplace.

But opponents say that many terms in the new laws are too vague, such as what constitutes an “emergency medical condition” and what providers can be seen.  Chiropractors, acupuncturists, and physical therapists say they are concerned that people will develop many more chronic conditions after car accidents because they aren’t getting reimbursed for seeing these types of providers.  They government disagrees with these claims and is trying to assure Floridians that they will be treated for their valid medical claims following a car accident.  They say they are just trying to get rid of the rampant fraud caused by many of the things they have changed or banned.

The most important thing to remember if you are a Florida driver is that you have to file any medical claim within 14 days of a car accident.  Once you have done that, follow the exact procedures listed under the new laws so that you will be reimbursed by your car insurance company.  Despite the battle between consumer groups and the government, you need to follow the laws until they change, if they do.

5/5/2012

After years of debate, changes have been finalized for Florida’s PIP auto insurance.  According to Tampa Bay’s Fox 13 News, Jeremy Campbell says “Car insurance changes (are) coming soon.”  Rick Scott, Governor of Florida, signed a bill this week that will take effect on July 1st of this year.  Auto insurance companies and lawmakers have been working for years to battle fraud related to Florida’s Personal Injury Protection (PIP) insurance.  They say that these changes will help to lower auto insurance rates because the fraud was out of control.

What will the new bill change?  First of all, Florida drivers will have to seek medical attention for any injuries related to an automobile crash within fourteen days of the occurrence.  At one point, there was no cap on the amount of time that could lapse between an accident and receiving medical treatment.  Unfortunately, some drivers were abusing the PIP system and seeking treatment for injuries or medical conditions unrelated to the crash quite a time later.

Drivers will also have to seek this medical attention from a certified medical doctor or dentist.  They cannot go to see a chiropractor or a holistic type of healer for care if they have been injured in an automobile accident.  The amount of benefits you can be paid has now been capped at $2,500, unless a certified doctor says that you have an “emergency medical condition.”  The cap used to be $10,000, so this is quite a significant change.  If you live in Florida and need to use your PIP insurance, make sure to have your claim documented by a medical professional within fourteen days of your accident.

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.