Smart Auto Insurance Blog

Most car insurance companies, including Progressive and American Commerce, have their own calculation for determining car insurance quotes.  You may feel like the rate you end up paying is out of your control but that isn’t necessarily the case.  There are numerous factors insurers use that are within your control and knowing what they are can help you save money.

The biggest factor is often driving record, and although you cannot do anything about the past, you can control your future driving habits and wait until previous driving violations fall of your records, which they eventually do.  You can have a clean slate with a little patience and careful driving practices.  Another big one these days is credit rating.  Again, the past is the past, but derogatory marks fall off your file in about 7 years, and focusing on paying your bills on time and keeping your debt levels down will pay off in the long run.

Of course what type of car you drive is going to have a huge impact on your car insurance quotes.  In general, the more expensive the car the higher your quotes will be.  Take a serious look at how big of a car you need, and how important luxury really is considering the overall costs.  Not only will that actual car cost more money, but maintenance and insurance will be higher.  The extra money can add up to a lot over the years.

And make sure you are shopping around for the best rate.  Just because one car insurance company gives you a hefty price, doesn’t mean they all will.  Get at least 3-4 quotes, if not more, and compare any trends you may see.  You’ll also want to make sure your coverage is sufficient and meets your needs.

The American Automobile Association (AAA) released its 2011 Your Driving Costs research which indicated that the price of auto insurance quotes on a sedan is down 6.1% but driving costs overall increased by about 3.4% since last year.

The AAA report shows that the average annual auto insurance premium for a sedan is $968 which is down $63 from 2010 according to the article “AAA: Insurance Costs Down, Overall Driving Costs Up in 2011″ by Matthew Morisset on the Online Auto Insurance News Team.  This decline cancels out the auto insurance increase from 2010.  The 2010 report showed that policy costs had gone up by 5.7% from 2009.

The insurance costs were based on a 47 year old man with a good driving record and drives between 3-10 miles each day.  The coverage for this sample policy included adequate coverage of $100,000/$300,000 with a $500 deductible for collision and a $100 deductible for comprehensive coverage.  This gives an average look of what a common policy price looks like for an individual but would obviously vary if the coverage, mileage or age were different.

The average yearly costs to own and operate a sedan is $8776 based on 15,000 miles per year.  This number actually increased from 2011 most likely due to the rise in gas prices, the costs of tires and the increase in depreciation rates.  A variety of cost categories were looked at including auto insurance, fees for licensing, taxes, finance charges, depreciation, gas, maintenance and tires.

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.

Based on a recent online survey completed by the InsuranceQuotes website, a surprising 16% of American drivers say that they have driven without carrying auto insurance, which happens to be against the law.  Also in this survey, 2% admitted to currently driving around without auto insurance which is concerning for all insured drivers on the road.

With the past few years being tough economic times for many, this probably makes sense.  According to the article “16% of Motorists Have Driven Without Insurance” by Alex Vorro on insurancenetworking.com, 28% of males ages 18-25 and 45-54 were at the top of the list for driving without insurance.  The percent of women driving without insurance is only about half of men.

Men and women combined in the age group 45-54 were the most likely to have driven without insurance at about 22%.  In the age group over 55 only 8% have admitted to ever driving with auto insurance.  The survey also looked at the reasons why people were driving with out auto insurance.  Auto insurance quotes can be expensive and it would seem that would be one of the reasons.  Actually, 24% of drivers drove without auto insurance because they didn’t have a chance to renew, 19% because of a gap while switching insurance companies and 12% because the insurer cancelled their policy.

Louisiana once again is experiencing the highest median auto insurance costs throughout the entire nation.  Coming in at $1,111 on average according to the InsWeb survey, Louisiana feels the weight of these high rates especially when compared to other states which are significantly lower.

According to the article “Louisiana Auto, Property Insurance Rates Highest in US” by Christopher Tidmore on BayouBuzz, North Carolina’s average cost is $495 and Virgina comes in at $521.  Both of these rates are less than half the cost of Louisiana auto insurance.  Florida auto insurance quotes have jumped and are on the higher side as well, coming in at about $750, which is worse than last year.

InsWeb’s 2011 Car Insurance Rate Report comes in handy when people are shopping around to compare auto insurance.  It gives consumers an idea of what to expect and what might be considered “high” in their state.  The annual report ranks all 50 states and Washinging DC and bases their rankings on the median household car insurance rate for a 6 month policy.  InsWeb gets their rates from a system that tracks rates from the largest auto insurance companies in every state in addition to actual profiles of their customers.

Auto insurance fraud is soon to become a felony in the state of New York.  Legislators are working on harsher penalties for those submitting false claims and other fraudulent activity according to the article “New York Senate Passes Bill Making Auto Insurance Fraud a Felony” found on the US Insurance Corner website.

The New York Senate is hoping that passing harsher penalties against perpetrators will not only encourage less fraud but will ultimately lower costs of auto insurance quotes for everyone in the state.  Fraud losses have to be made up somehow by insurers and unfortunately it ends up coming out of innocent, law-abiding customers.

Republican Senator James Seward sponsored the bill and on the Senate’s insurance committee as a chairman.  He believes the new legislation offers a strong deterrent to those considering fraud against their auto insurance company.  He also sees this bill improving highway safety and dropping auto insurance rates for everyone.  Depending on the history of the perpetrator and the circumstances around the fraudulent activity, a person could face a class B, C or D felony which translates to much harsher punishment.

The bill targets those who stage accidents since that is one of the more egregious acts, but this is not the most common type of fraud.  The State of New York Insurance Department says about 9 out of 10 fraud cases are related to no-fault injury claims.

Auto insurance fraud continues to be a problem across the nation.  For years, auto insurance companies have worked to eliminate fraudulent claims and fraud rings.  Unfortunately, it’s still prevalent and costing consumers a lot of money.  Every time fraud is committed our premiums increase and this is not fair to the customers following the rules.

First Acceptance Insurance is working hard to limit the amount of fraud affecting their bottom line.  According to their website, they suspect fraud costs insurance companies and their customer billions of dollars.  The Coalition Against Insurance Fraud says that approximately $80 billion a year is lost because of fraudulent activity.  This is staggering and extremely frustrating to know it’s happening everywhere, all of the time.

The good news is that most auto insurance companies, including First Acceptance, have fraud departments in place, working around the clock to fight fraud.  First Acceptance, for example, has a specific team and information on their website to report fraud.  They also list information for the National Insurance Crime Bureau, who they work with, to combat this ongoing problem.  If you suspect insurance fraud, contact your insurer with information.  It may end up saving the rest of us a lot of money.

A survey released earlier this week revealed some good news for Florida residents.  Insure.com released a survey which found Florida’s average annual premium for auto insurance was $1,476 which is $85 less than the national average.

Florida does happen to be one of the most expensive markets for property insurance, but the auto insurance market stays competitive according to the article “Florida Auto Insurance Cheaper Than Average, Survey Finds” found on FloridaTrend.com.  Compared to all of the other states and Washington DC, Florida ranks 29th overall in expensive auto insurance.  The most expensive states from the survey were Michigan at $2541, and Louisiana at $2453.  The cheapest auto insurance rates will be found in Vermont with an average premium of $995 and South Carolina at $1095.

Florida auto insurance quotes being lower is great news for residents since they are already paying higher rates for property insurance.  This is probably due to hurricanes which can devastate properties and cause homeowners insurance rates to soar.  Lower auto insurance quotes Florida help offset those costs.

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.