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.

Check out our update to this blog.  Hint: voters in California voted the same on Prop. 33 as they did on its predecessor Prop. 17.

Two years ago, voters in California turned down a Proposition very similar to this year’s Prop. 33.  Erik Anderson of KQED in California talks about both sides of Prop. 33 in “Prop. 33 Asks Voters to Reconsider How Auto Insurance Discounts Work.”  If Prop. 33 passes, auto insurance companies will be able to offer better discounts to drivers who have consistently carried insurance for 5 years.  That means that around 80% of drivers would be able to receive significant discounts on their auto insurance simply by maintaining insurance coverage without interruption for 5 years.  Some exceptions have been made to separate Prop. 33 from the failed Prop. 17.  Military members, people who have lost their jobs, and children who were living with their parents will not face steeper car insurance rates if they haven’t maintained 5 straight years of insurance coverage.

But California drivers who don’t meet those exceptions will face much higher auto insurance rates if Prop. 33 passes.  Opponents says that 20% of the drivers in California will be financing the discounts for the other 80% of the drivers.  They say that there was a good reason for the law passed 24 years ago prohibiting auto insurers from offering discounts based on insurance coverage history.  They currently have to base pricing on the driver’s driving record, how many miles they drive, and how long they have been driving.  One concerned voter worries that their rates will be high when they voluntarily sold their car and used public transportation within the past 5 years.  Why should they be penalized for not maintaining auto insurance when they didn’t have an auto to insure?

As he was with Prop. 17, Mercury Insurance owner George Joseph is the main proponent of Prop. 33.  He is also offering up much of the funding.  He says that it will increase competition in the auto insurance market, which is good for drivers as well as most insurance companies.  Proponents say that Prop. 33 will reward drivers in California’s auto insurance market who have maintained their insurance.  It also allows drivers to switch companies and get lower car insurance rates because the discount is portable.  It can be difficult to tell whose best interest is at the forefront in political debates and Prop. 33 has made auto insurance political.  California drivers need to do their research and vote this November to make sure that what they would like to see happen with Prop. 33 has the best chance of being the outcome.

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.

Just like the cell phone industry fought for you to be able to take your phone number from one company to another, the auto insurance industry in California wants you to be able to take your discounts with you.  According to “Car insurance discount act could give break in prices,” Nannette Miranda of California’s ABC News10 says that your continuous coverage car insurance discount could become portable.

If the 2012 Automobile Insurance Discount Act passes, any driver who receives a discount for retaining continuous auto insurance coverage from one company would be able to take their discount to another company.  If this does not pass, companies will still be prohibited from giving discounts based on past coverage with another auto insurance company.  This initiative does not take into account any type of discounts for being a good driver.

A campaign consultant argues that this will allow for greater competition in the marketplace as companies can charge better rates.  The Consumer Federation of California disagrees.  They say that people who have been uninsured for any period of time will be hurt by 40-50% surcharges on their insurance coverage, even if they were uninsured because they didn’t have a vehicle.  Mercury Insurance tried to pass a similar initiative two years ago to no avail.  There are some people who believe Mercury is behind this initiative as well.

Car and Driver magazine came up with a list of the 10 Best Cars for 2012, according to Yahoo! Auto News.  Their list is compiled all from cars under $80,000 and all of which are available for purchase by next January.  Included in the list are new cars, cars with major updates, winners from their 2011 list, and cars that weren’t yet available for last year’s list.

Before purchasing one of these cars, check out all of the great benefits listed and be sure to check auto insurance quotes and make sure your premiums won’t change too drastically with one of these new cars.  The Audi A6 and A7 top the list because of their excellent power, steering, structure, and bang for the buck.  With 21 years on the Best Cars list, the BMW 3-series and M3 have not even had a close competitor to match their benefits.  Next on the list is the Cadillac CTS-V because of its looks and power.  The Ford Focus is referred to as a “street fighter” and Car and Driver recommends only getting the manual transmission with the SE Sport Package.  The Ford Mustang GT/Boss 302 is on the Best Cars list because of its crazy good value; you get more power for $41,000 than anything else out there.

The Honda Accord is next on the list because of its old-school talent and goodness that has no comparisons in the industry.  The Honda Fit is praised for its huge genius in a little package, the Mazda MX-5 Miata for its unrivaled characteristics, and the Volkswagen Gulf/GTI for their small yet never boring components.  Finally, even though the Porsche Boxter and Cayman may increase your California auto insurance quotes, its well worth it for the amazing and pure sports car experience you’ll get from these vehicles.

Written by Sara Smart

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Spokesperson for the Insurance Information Network of California says that states are turning towards alternatives to pay for traffic violations.  This can save money and prevent increasing California auto insurance quotes for drivers who have a clean record to begin with.

Some counties are offering traffic violation classes instead of a fine and other areas are even offering community service projects such as picking up a litter.  With the economic downturn, many drivers are finding this to be a pretty good deal, especially if it means they can keep their driving record clean.

The article “Pay Your Speeding Ticket by Picking up Litter” by Susan Ladika on the Fox Business website confirms that points on your record matter big time when it comes to auto insurance rates.  As an example, USAA Auto Insurance offers a substantial discount to those with clean driving records for a period of time.  Savings can add up to 5-7% and make a big difference in a yearly premium.

Violations can stay on your record for up to three years, so keeping your record clean is definitely beneficial.  Auto insurance companies are using this as a large factor in calculating quotes for customers.  If an alternative is available you can not only save money on the ticket itself, but in the long run your auto insurance rates may be less.

Written by <a rel=”author” href=”http://www.smartautoinsurance.com/author/sarasmart.html“>Sara Smart</a>

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.

California auto insurance has had its ups and downs with auto insurance rates, and for 2011, California ranks 29th in auto insurance affordability according to the article from Mark Glover of The Sacramento Bee.  This was based on a new report released by InsWeb Corp.  This is actually an improvement from their ranking last year which was 34 in the Car Insurance Affordability Index survey.

In order to rank the states in their affordability, InsWeb looked closely at all 50 states and Washington DC.  InsWeb compared household incomes with the average auto insuance costs throughout the state to determine affordability.  For the 2nd year in a row, Massachusetts came in first place with a factor of 2.09%.  Louisiana came in last place with a factor of 6.76%.  California had a factor of 3.34% which was pretty close to average.

Being in one of the more expensive states for auto insurance makes it even more important to compare auto insurance online, or through an agent.  Rates can vary significantly from insurance company to insurance company.  They will look at many factors including location, driving record, and car make.  If you think you are paying too much for auto insurance shop around to make some comparisons.

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.

California auto insurance companies continue to debate Prop 17.  According to the article “Consumer Advocates, Insurers Battle Over Prop 17″ by Sue Kwon on cbs5.com The Yes on Prop 17 campaign is spending millions in ads to spread their message.

With Prop 17, the clean record discount would follow the driver if they chose to switch companies.  Insurance broker, John Morton, with the Alliance of Insurance Agents and Brokers wants the measure to pass.  He believes it’s a win-win for his clients.  He sees the good driver discount as something a driver should have ownership over regardless of what company they go with.  Morton also thinks Prop 17 will cause companies to compete and drive down California auto insurance quotes.

The Executive Director of the Consumer Federation of California, Richard Holober, believes the opposite will happen.  California auto insurance companies, such as Infinity Auto Insurance, may end up charging more to certain customers including students, military, unemployed, or low-income drivers because they break continuous coverage within 90 days.  This is detrimental to drivers in these groups who may have perfect driving records and otherwise would not get their rates raised on them.