Smart Auto Insurance Blog

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

Auto insurance quotes in Florida continue to rise and this is causing some serious concern for consumer advocate groups in the state.  According to the article “Fla. Consumer Advocate Focusing on Auto Insurance” by The Associated Press on MiamiHerald.com, Florida’s insurance consumer advocate is forming a solid group to address the issue of increasing auto insurance rates.

Robin Westcott, appointed by Chief Financial Officer Jeff Atwater, points out that one of the main reasons rates continue to soar is because of the no-fault coverage for personal injuries layout of Florida auto insurance law.  Westcott is encouraging those who have stake in the personal injury protection system including lawmakers to considering these groups and join to show support.  This would be a huge move in the industry to work towards bringing rates down for the residents of Florida.

Westcott says she hopes to submit the group’s research to Atwater and the Florida Legislature by November of 2011 and make serious strides towards a solution.  Florida’s rising rates have been an issue for many years now and the way the law is set up is encouraging rates to keep rising.  Something needs to change to protect Florida drivers from experiencing some of the highest auto insurance quotes in history.  The time and effort it will take to implement changes is huge, so the more support they can rally the better.  Florida residents need a voice to ensure rates are kept affordable.  Times are tough enough without the rising costs of auto insurance.  Since auto insurance costs are necessary for most Florida residents, it should be a top priority for lawmakers.  Time will tell if their efforts will pay off in the end.

Written by Sara Smart

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

Auto insurance quotes can be higher on cars that are the most commonly stolen.  Knowing this can help you make a decision on what type of car you want to purchase when you start to compare auto insurance policies.  The National Insurance Crime Bureau (NICB) recently announced their findings for 2010 in the most commonly stolen vehicle types and consumers are anxious to know.

It’s no surprise that for the third straight year in a row the 1994 Honda Accord is the most stolen car for 2010.  Over 50,000 Accords were stolen in 2010 according to the article “The Most Commonly Stolen Vehicles In The United States” on US Insurance Online.  It’s suggested that weak security systems and a continuously high demand for parts are the two main reasons that the ‘94 Accord continues to be stolen the most.

The spokesperson for NICB, Frank Scafidi, says there is a black market for important parts and sometimes cars are worth more for their parts than they are when they are still in tact.  Between 2002 and 2009 there were many more foreign cars on the top 10 list when compared with domestic models.  In 2010, there were actually six American models on the list which is a turn in the trend.  The Honda Accord, Honda Civic and Toyota Camry were the three top most stolen cars in 2010, so consider this when purchasing your car considering your auto insurance rates many be higher due to the high theft.

Written by Sara Smart

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

Many auto insurance companies have comprehensive coverage packages with great deals, but you have to do your homework to ensure you are getting want you really want.  One overlooked benefit that doesn’t come with all auto insurance policies is towing coverage.  Whether your car gets stuck in the snow, has a flat tire, the battery dies or it randomly will not start, towing coverage is invaluable and many policies offer it at no extra charge.  Unfortunately, many consumers do not realize this.

Specifically speaking, what you should look for when comparing auto insurance quotes is Towing and Labor Coverage according to the article “Does Your Auto Insurance Cover Towing” by Marcia Passos Duffy on FoxBusiness.com.  This type of coverage will often take care of the towing as well as labor to help get the car started again.  Labor generally covers small fixes and not parts so be careful when a mechanic offers to fix everything.  This coverage can also be called roadside assistance and some companies extend other benefits that mimic an auto club membership.

If you are a member of an auto club and paying an annual fee, double check with your auto insurance company to make sure you don’t already have the coverage you’re looking for.  If you have quality roadside assistance through your insurer, you may be able to cancel your auto club membership and save some money.  With this said, auto clubs such as AAA offer unique benefits that can be hard to find with insurers so you will want to be sure and compare the perks side by side and see what is the best fit for your budget and your personal needs.

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

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

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>

Alabama has been one of the leaders in uninsured motorists for years according to the press release found on OnlinePRNews.com.  Alabama auto insurance leaders and state lawmakers want to change this statistic and are pushing through legislation to reduce the rate of uninsured drivers throughout the state.

Alabama state law says that residents must have a liability policy in place if they want to legally drive an auto.  They are also required to carry proof of insurance with them in the car.  Even though there is a $500 fine for first time offenders, many drivers still choose to go uninsured.  The Insurance Research Council says that about 1 in 5 drivers in Alabama were uninsured in 2009.  To discourage this stat, lawmakers are trying to put in place an electronic auto insurance verification database which would match up policies with autos registered in the state allowing officials and the Department of Revenue to quickly determine whether or not a given car is insured.

In order to register your car you must check a box confirming you carry auto insurance for the car, but this database would actually verify this information rather than taking the driver at their word.  Obviously a handful of drivers are blatantly lying about this information so something needs to be put in place to prevent this from going on.  Hopefully this type of system will encourage more drivers to keep their policy valid and choose to be truthful on their registration application.