Smart Auto Insurance Blog

California has a low-cost auto insurance program which offers lower auto insurance rates, according to the article “Requiring Auto Insurance Requires That It’s Also Affordable” by Peter Luke on mlive.com.  The program covers basic auto insurance for less than $400 a year.  Drivers must be 19 and have a relatively clean driving record.  There is also an income requirement of less than $27,000 for a single person or $55,000 for a family of 4. 

The article points out that one of the main arguments over the health care debate is that if there is going to be a mandate on health insurance then premiums must be made affordable.  The same concept should be applied to auto insurance since it is required in most states.  The policies need to be readily available for everyone, fairly administered and with reasonable auto insurance rates. 

There is also much debate over how auto insurance companies determine their rates, especially in Michigan where previous posts discuss how they are debating the use of the credit score.  Many believe not only should credit score be excluded from auto insurance companies’ formulas, but also income, gender, zip code, marital status, and bankruptcy.  Some states are considering excluding employment status, which is important for today’s high unemployment rate.

According to the article “The Effects of a DUI on Car Insurance Quotes” by insuranceagents.com, auto insurance quotes can skyrocket after a Driving Under the Influence violation is on your record.

Not only will a DUI on your record cause your auto insurance quotes to increase, but your license may be suspended and your current auto insurance policy may be cancelled, leaving you in a tough spot to find new auto insurance fast. 

There is a zero tolerance for drinking and driving in the United States because of how terribly dangerous it is to the driver, passengers and other people driving on the road.  Not only are you putting lives at risk if you drink and drive, but you are setting yourself up for a potentially very expensive road as well as possible jail time.

According to the article “DMV Requires a New Auto Insurance Policy When You Move to a New State” found on bestsyndication.com, your driver’s license cannot be updated with a new state until you change your auto insurance.

The Department of Motor Vehicles (DMV) requires drivers who are moving to a new state to take out a new and updated auto insurance policy.  Without the new policy in place you will be unable to obtain a new license.  If you are staying within state lines you still need to contact your auto insurance company since part of your rate is based on where you live, but the policy may not be redone at that time. 

When moving, there is already a long to do list, but be sure to make updating auto insurance a priority.  It can cost you a lot of time and money if you get stuck driving without insurance and you are pulled over.

Everyone knows that driving while intoxicated is extremely dangerous and against the law, but what many may not realize is that it’s very expensive as well.  According to the article “Driving Under the Influence is Expensive As Well As Dangerous” by the Kalamazoo Gazette Staff found on mlive.com, drinking and driving violations are the most expensive of all traffic violations.

According to insurance.com, DUIs can shoot auto insurance rates up by as much as 38%.  Their RateWatch Data shows that the lowest rate quoted to someone with a DUI was $2148 in 2009 across the country.  That is about $435 more than a driver who does not have a DUI. 

Not only are you putting your life at risk as well as other people on the road if you drive drunk, but you will most likely have your license suspended if you are caught and you will have to file a SR22 Insurance form, which is a certificate submitted to the Secretary of State proving that you have liability insurance.

According to the article “Data Shows Auto Insurance Rates Rise for DWI Convinctions” by Lavonne Kuykendall on CNN Money’s site, auto insurance rates in general are on the rise. 

Information obtained by insurance.com shows that auto insurance rates for male drivers with a DWI or DUI convinction are rising faster.  DWI rates usually stay in effect for 5 years after a DWI conviction.

In 2009, male drivers who had a DWI conviction paid auto insurance which was about 24% more per year than did men without any violations.  This is up from a 22% difference in 2008.  The rate of increase for someone with a DWI has remained the same for women since 2008, at about 28% higher than the rate for women without any violations.

According to a PRWeb Newsrelease found on Entrepreneur.com, the recession is causing many Americans to drop their auto insurance which can be extremely risky.  The Insurance Research Council found that one in six drivers may be uninsured by 2010 as the economy continues to struggle. 

In addition to the obvious risk of possibly getting into a car accident and having huge bills to pay, auto insurance should never be dropped for other reasons.  It is against the law to drive a car without auto insurance coverage.  It’s a crime in all 50 states.  Your auto insurance rates may increase when you do decide to reinstate your policy.  You may incur harsh penalties that will cost you a lot of time and money.  Your odds of getting into an accident with an uninsured driver are substantial so if neither of you are covered it can be catastrophic. 

Also, most states require that you carry proof of insurance at all times while you are driving.   You can even get your license suspended or receive jail time.  If you get caught driving uninsured, it goes on your record and your auto insurance rates will be affected as you will be placed in a high risk category, even though you may be a safe driver. Many auto insurance companies charge a reinstatement surcharge up to 50% since they consider these drivers irresponsible.  Bottom line, do not drop your auto insurance policy to save money.  It will end up costing you much more in the long run.  If you are desperate to save money, shopping around for a more competitive auto insurance quote is a much better route.

We all know that driving while texting while talking on a cell phone is dangerous, studies have shown that it is nearly as dangerous as drunk driving.  Consequently many states have inacted legislation to make various types of cell phone usage unlawlful, and in some cases using a cellphone while driving can earn you a moving violation called “careless driving” or something similar, which can impact your auto insurance rates.

To date

• 6 states have enacted a jurisdiction-wide ban on cell phone usage while driving including:  California, Connecticut, New Jersey, New York, Utah, and Washington) and the District of Columbia
• 6 other states have authorized localities to ban cell phone use including: Illinois, Massachusetts, Michigan, New Mexico, Ohio, and Pennsylvania
• Texting while driving is banned in 14 states & DC

The complete article as well as interactive maps which summarize these laws can be found here: http://www.iihs.org/laws/cellphonelaws.aspx

We all know that traffic violations have a negative impact on your auto insurance rates.  The Insurance Institute for Highway Safety (IIHS) has released a map which shows maximum speed limits in each state.

If you are traveleing intrastate for vacation this usmmer you should familiarize yourself with the maximum speed limits in the states for which you will be driving through.  One of the easiest ways to keep your auto insurance premiums down is to make sure you have a clean driving record.

You can visit this url directly to view these speed limit maximums on a state by state basis.  http://www.iihs.org/laws/mapmaxspeedonruralinterstates.aspx

The state of West Virginia has made a change to their driver’s licensing laws as they relate to new drivers.

Effective July 10, 2009, young drivers in West Virginia who do not to enroll in driver ed will be required to drive for 50, rather than 30, supervised hours in the learner’s phase.

In addition, provisional license holders will be prohibited from driving between 10pm -5am (as opposed to 11pm -5 am).

Additionally, new drivers will not be permitted to have any passengers in their car for the first 6 months, and only 1 passenger for the next 6 months.

More information on West Virginia auto insurance.

A new topic that will be covered here in the smart auto insurance blog is driving laws.  While not exactly an auto insurance topic, all moving violations do indeed have an impact on auto insurance rates at the end of the day and changes to such laws should be of interest to those who have an interest in what is going on in the world of auto insurance.

Effective July 1, 2009, Tennessee joins 11 other US states (Alaska, Arkansas, California, Connecticut, Louisiana, Maryland, Minnesota, New Jersey, Utah, Virginia, and Washington) in banning text messaging by all drivers.

More information on Tennessee Auto Insurance.