Smart Auto Insurance Blog

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.

Many people often wonder what type of coverage they have if someone they lend their car to gets in an accident.  Unfortunately, most do not consider this when they compare auto insurance benefits.  This is an important benefit to consider though, especially if you think you may be lending out your car to any friends or family members during the life of your policy.

In general, auto insurance policies follow the car.  This doesn’t always make sense to drivers since rates are based on their driving record, not the person they lend their car to, but most insurers follow this rule.  It is possible that you would be responsible for coverage if you are driving someone else’s car and they do not have auto insurance.  This is unfortunate situation that can confuse drivers.

According to the article “Lending Your Car Can Bring Auto Insurance Concerns” by William Pirraglia on E-Wisdom.com, when you lend out your car to someone, you take on ‘vicarious liability’.  Your auto insurance is responsible for property damage, bodily injury, as well as other possible damage charges.  Since you gave permission to for someone else to drive your car, you have to accept liability for your friend’s activity.  Legally the borrower has no classic insurance liability unless the car has no insurance on it.  If someone steals your car and gets in an accident then you would not be considered responsible for liability so that at least is a good thing.

There are a lot of complex exceptions based on a variety of scenarios, so be sure to check with your specific auto insurance policy to see how your insurer will respond to each situation.  Knowledge is key in preparation for accidents if you do decide to lend out your car to someone you know.

Winter driving has its serious hazards and accidents occur without warning throughout the winter months.  Snow, sleet, black ice, and freezing temperatures can wreak havoc of safe driving.  Ensure you are taking extra precautions to prevent winter accidents.

Reduce your risks of being in an accident this winter by following some simple steps.  Get your tires checked.  Tire tread is important as well as having your tires properly inflated.  Investing in snow tires can make your commute safer through the elements.  Ensure your breaks are in working order and if not, invest in new ones.  Breaks need to respond properly when slammed upon and if they are wearing if may cause an accident.  One last tip is to consistently check your window wiper fluid.  It’s easy to find yourself empty as the sleet starts to come down which can severely impact your view of the road.

In addition to taking these safety steps, winter is a good time to update your auto insurance policy to ensure everything is in place in case of an accident and that you are paying fair auto insurance rates.  You don’t want to find out certain things are not covered in your policy after you slide on some ice causing an accident.  Being prepared is the best way to cover your losses.

State Farm auto insurance is a proud supporter of Mothers Against Drunk Driving (MADD), whose primary mission is to put an end to drunk driving and support victims of such crimes.  They also fight to put an end to underage drinking.  State Farm is a national sponsor and they share very similar values in educating youth about the dangers of drinking.

“Protecting You/Protecting Me” is a comprehensive program offered through MADD which uses an approach to stop underage drinking through effective, educational efforts to stop the access of alcohol to our youth.  This excellent program is a research-based plan which is nationally recognized nationally.  The Substance Abuse and Mental Health Services Administration, Center for Substance Abuse Prevention named it a “Model Program”.

State Farm and Meharry Medical College also came together to research why seat belt and child safety is lower among African Americans.  They plan on using the findings to influence legislation to further support cultural public awareness programs.

Driver safety continues to be a priority of State Farm.  If you choose to disregard any safety provisions put forth by the law, then not only are you putting yourself and other drivers lives at risk but you are increasing your chances of paying higher auto insurance rates or having to carry SR-22 insurance.  There are no benefits to breaking the law when it comes to driving.

According to the article “New York No-Fault Auto Insurance Leads to Inflated Claims” by Ryan Fields on e-wisdom.com, New York auto insurance could be experiencing higher rates because of their insurance model.  New York is one of many states in the US using the no-fault auto insurance system.  The purpose of this type in insurance model is to reduce costly legal costs from deciding who is at-fault for an accident.

Since no-fault auto insurance has auto insurance companies paying out claims directly to their customers regardless of fault, fraud can be an issue.  According to the Insurance Information Institute, about 20% of each no-fault auto insurance claims made are fraudulent.  That adds up to approximately $1561 per claim and cost insurers and their customers over $600 million since 2005.

Chief economist, Dr. Steven Weisbard, ties the increase to medical providers who submit claims that are much higher than they should be.  He says the amount of fraud in New York’s auto insurance system is so severe that payouts for claims are currently the 2nd highest they have been since the late 1990’s.  This excess translates to higher auto insurance rates for drivers in New York obtaining auto insurance.  Costs rise for everyone as fraud claims rise.

According to the article “Senate Approves Bill to Increase Auto Insurance Liability Coverage” by Michael Dresser on baltimoresun.com, quotes on auto insurance in Maryland are due to change because of the new law.  The Senate voted to raise the minimum liability limits for auto insurance policyholders for the first time in about 38 years.

The final vote for this landmark decision was 27-20, sending the bill to Governor Martin O’Malley for his approval.  The law was approved after a tough fight led by the Senate Republicans as well as some Democrats.  The measure put state’s lawyers and some of their clients against auto insurance companies and advocates for the poor which was a point constantly made by GOP senators.

The new bill is expected to affect over 200,000 Maryland residents who have the minimum amount of auto insurance coverage.  Most of the approximate 2 million policyholders who carry more comprehensive protection will not be as affected.  It’s still to be determined exactly how Maryland auto insurance quotes will be affected.

Bristol West Insurance has a link on their page to some very interesting articles on highwaysafety.org.  One of the articles discusses thoroughly bans on cell phone usage while driving.  It’s become a hot topic as Oprah is trying very hard to get all Americans to sign pledges agreeing not to use their phone while driving.  Lives can be saved and more and more states are recognizing this and putting it in the law books.

Currently there is a jurisdiction wide ban on driving while talking on a hand-held phone in 7 states which include California, Connecticut, New Jersey, New York, Oregon, Utah, Washington DC and Washington state.  In addition, many localities have placed restrictions on cell phone use, including Oprah’s hometown of Chicago, IL.

Text message is a newer phenomenon and texting while driving is even more dangerous as it takes drivers’ eyes off the road for a period of time.  Text messaging is currently banned in 20 states and Washington DC and that number is expected to rise as more and more studies show how dangerous it really is.  The use of cell phone for those driving a school bus is prohibited in only 17 states and Washington DC.  That seems like an obvious ban that should be placed everywhere.

Don’t be surprised if it becomes law across the nation that cell phone use while driving is restricted.  Already, car insurance quotes can be affected if you have been caught in an accident while on your phone.  It’s a very wise practice to get in the habit of even if your area currently has no restrictions.  Find a safe place to pull over if using your phone is absolutely necessary while you are on the road.

Mercedes newest protocol, The Experimental Safety Vehicle, offers some impressive features that may drastically reduce injuries and deaths in the case of an accident.  This is according to the article “Mercedes May Help Owners Get Inexpensive Auto Insurance with Safer Car” by Shannon Brown on Cheaper Car Insurance’s website.

If this new safety car is brought to the market and proven effective it will affect the auto insurance quotes for Mercedes drivers.  This unique design basically turns the car into a giant airbag before impact which protects the driver and the passengers.

Mercedes continues to be on the forefront of vehicle safety.  There are even more special safety features in the models coming out soon.  Mercedes make safe driving a priority and it shows in their efforts towards making safer models.  Unfortunately, prices for these types of cars are on the rise, but at least it’s good to know that many auto insurance companies give discounts for cars that are proven extremely safe.

Getting into an accident is a very stressful situation, whether it’s your fault or not.  It’s important to ensure that you know what to do in the case of an auto accident and even more important to remain calm.  The article “5 Steps to Filing Your Auto Insurance Claim” by Bobbie Sage on About.com discusses some key points to remember if you are in an auto accident.

First, evaluate if you actually need to file a claim.  If the damage is minor and you can pay for it out of pocket without any financial stress that may be the way to go to keep your driving record clean.  Second, document every detail of the accident to be sure you have the information to give your insurer if need be.  If deemed necessary, file your claim as soon as possible.  Most auto insurance companies, including Bristol West Insurance, are available 24 hours a day, every day to receive your claim information.

Be sure to prepare for a call from the insurance company of the other driver involved.  There may end up being a dispute in which case you will need to have all your information available.  Once your claim has been accepted you may get a visit from an insurance adjuster to access the damage and let you know where you can go to get your car fixed.  Getting in an accident is a complicated mess many times, but it doesn’t have to be.  Being prepared is the first step to a smooth resolution.

Prop 17 is a proposal on the California ballot sponsored by Mercury Insurance which will allow auto insurance companies to charge many drivers for various reasons.  This includes military people who did not purchase auto insurance while living on base even if they didn’t own a car at the time.  This is according to the article “Nation’s Leading Insurer of Soldiers, USAA, Criticizes Prop 17; VoteVets.org Announce Opposition” found on InsuranceNewsNet’s website.

USAA, which was formed in 1922, says it cannot support the bill because of the negative impact it will have on active duty men and women.  The rating system does not take into consideration the special circumstances of our military men and women and USAA does not feel this is right.  VoteVets.org signed a ballot argument against Prop 17 and they represent 100,000 veterans and military families.

Under Prop 17 drivers, including soldiers serving stateside, who stop driving and did not need insurance for a certain time period would have to pay hundreds more for their auto insurance when they decided to restart the coverage.  Doesn’t seem fair to people who have legitimate reasons to stop carrying insurance for small periods of time, such as the military.