Smart Auto Insurance Blog

The high Michigan auto insurance quotes in Detroit and other Michigan cities are driving residents out as more and more people cannot afford the high costs.  It’s also causing thousands of residents to commit fraud or drop their insurance altogether.  This is according to the article “Car insurance rate setting hits Detroiters unfairly” by Jeff Gerritt on freep.com. 

Detroit is the nation’s poorest big city yet residents pay the highest average auto insurance rates in the country.  About half of its motorists go without insurance because it’s so expensive.  Part of the reason for this problem is what’s called territorial ratings, which allow auto insurance companies to base their prices in part where people reside.  Regardless of a person’s driving record, if they live in Detroit they will pay more for auto insurance.  Insurers state the reason for doing so is because these areas have been deemed higher risk. 

Since many are unable to afford their auto insurance costs, schemes are on the rise.  Some drivers buy fake insurance certificates for as little as $50.  Some use false suburban addresses when purchasing their policy to obtain a lower quote.

According to the article “Car insurance rates fall 8%, state says” by Todd Wallack in the Boston Globe, Massachusetts auto insurance rates have fallen since they stopped setting their own rates back in 2008.  This information was obtained from the Division of Insurance.

The state study shows that auto insurance rates have dropped 8.2% from April 08 to April 09.  The rates also fell 5.2% from 06 to 07.  In April of 2008 Massachusetts started allowing auto insurance companies to set their own rates which was to create managed competition.  Before this rates were highly regulated. 

Jason Lefferts, for the insurance division, said that the study also found that during the last year the number of uninsured cars in MA fell and that less people were placed in the high-risk driver category.  Since the change in regulation 9 auto insurance companies have entered the Massachusetts auto insurance market.

According to the article “Car Insurance Mandate in Wisconsin Budget; No Driver’s Card for Illegals” on insurancejournal.com, Wisconsin auto insurance policy holders will have to buy liability insurance for their cars, but illegal immigrants will not be issued special cards to drive legally.  This is under the new proposed Wisconsin budget legislature.

This new requirement has been considered and proposed since the 70’s, but never put through because of the insurance industry.  Governor Jim Doyle has expressed his support for the new proposal.  It would take effect next year.  Anyone pulled over with no insurance card would be subject to a fine of $10.

Posing more of a debate was the driver’s card for illegal immigrants.  Immigrant rights groups and the police argue for the cards claiming they make the roads safer by ensuring everyone, even illegal immigrants, carry ID and are able to get auto insurance.  Doyle did not propose this and the Senate rejected it in the Wisconsin budget.

According to the Baltimore Sun’s Liz Kay, 67 Maryland auto insurance companies have been fined by the state’s Insurance Administration. The insurers were found to have under compensated drivers whose cars have been deemed a total loss, by failing to take into account increases in state sales tax and Motor Vehicle Administration fees when calculating a car’s value.

Liz reports that the over 4,000 drivers affected have already received refunds, averaging about $100 each (total restitution being $442,000). The companies (listed here) were also charged a $235,000 fine. Always make sure to make sure exactly what level of auto insurance claim your policy covers, so you aren’t greeted with an unpleasant surprise.

According to the Associated Press, Michigan auto insurance policy holders will soon have to pay more in fees as of July 1st. The Michigan Catastrophic Claims Association raised its fee, which covers seriously injured victims of car accidents, to $125 per vehicle. The charge is a $20 increase from last year.

Since Michigan is the only state that offers unlimited lifetime medical benefits through auto insurance for the seriously injured, the MCCA levies the fee to cover rising medical costs. The fee was actually reduced by $18 last year; however, that was due to investment gains that reversed themselves this year.

An article by Kenneth J. St. Onge in the Insurance Journal says that Esurance auto insurance has filed to obtain a foreign company license, the first step in being able to sell Massachusetts auto insurance. The insurer is following Geico and Progressive who have also decided to enter the state’s market, a year after deregulation of the industry. Like those companies, Esurance sells auto insurance policies directly to the consumer through the Internet.

Despite this indicator, Kenneth stresses that the auto insurance company states that they have no plans to enter the Massachusetts market any time soon. For one thing, they have not yet filed a rate plan; such an outline of the auto insurance rates they plan to charge is mandatory to sell insurance in the state.

Cliff Reisig recently wrote about significant increases in New Mexico auto insurance rates in the Alamogordo Daily News. After being hit with a 48% jump in the cost of his auto insurance premium last year, even though he had never filed an accident claim in the 20 years he had the policy, he decided to investigate the cause. 

After contacting the state’s regulation commission, Cliff found that the New Mexico state legislature recently decided to deregulate the auto insurance industry. Now, insurance companies can increase their rates at any time for any reason. As a result, auto insurance rates have exploded across the state, far beyond the customary 3% or so inflation in past years.

Since New Mexico mandates that all drivers have auto insurance, a complete lack of price controls could hurt the state’s drivers.

Here’s some great news for drivers with Massachusetts auto insurance: the state’s insurance commissioner, Nonnie Burnes, is no longer going ahead with her plan to shut down the appeals board. The Associated Press reports that her reversal comes after heavy criticism from the Massachusetts Attorney General, as well as the public.

The board, which was set to close on April 1st for new cases, allows motorists to appeal increased auto insurance premiums and added surcharges, levied when their insurance company determines them to be at fault in an auto accident. Annually, about 20,000 out of 50,000 drivers succeed in their appeals. Nonnie believes that despite that statistic, recent deregulation in the insurance market lets consumers buy auto insurance from a competitor if they believe their current insurer’s decision is unfair.

Major Northeastern insurer Plymouth Rock is offering several discounts on Massachusetts auto insurance, according to a recent press release.

To promote environmental consciousness, Plymouth has decreased auto insurance premiums for people who have “gone green” by driving fewer miles than the average in their area. This is similar to other auto insurance companies giving lower rates to drivers who do not use their cars for work commutes.

Inexperienced drivers, who normally have to pay more for policies, can save on their auto insurance rates by successfully completing a driving course from Driven Advanced Drivers Training. Plymouth Rock policy holders receive a 10% discount on the course.

Diane Levick in the Hartford Courant reports that Travelers Auto Insurance is expanding into the direct-to-consumer sales market. Unlike many major auto insurance companies, Travelers has solely relied on independent insurance agents until now. However, with an increasing amount of policies sold directly (two-thirds as of 2007), the company has joined firms such as Progressive Auto Insurance and Hartford Auto Insurance in selling through both avenues.

Currently, the Travelers auto insurance quotes available online or over the phone will be identical to those available through agents, though the insurer reserves the right to change those rates in either direction.