Smart Auto Insurance Blog

Allstate Insurance continued its crackdown of insurance fraud in New York state to close out 2011.  Many insurance companies have a big problem with insurance fraud because of the no-fault coverage issued in the state of New York, according to Insurance News Net’s “Allstate Files $1.1M Insurance Fraud Case in NY.”  This most recent lawsuit for $1.1 million is against sixteen people accused of falsely running companies they said were owned by a medical doctor in order to submit false claims to Allstate.  This is Allstate’s ninth insurance fraud lawsuit in New York this year and their thirty-sixth since 2007.

Unfortunately, no-fault auto insurance has been causing a fraud nightmare in the state of New York for years.  Consumers in New York pay more for their auto insurance because there is so much fraud, dubbed a ‘fraud tax’ by some.  An Allstate spokesperson urges New York lawmakers to enact and enforce regulation that will eliminate no-fault insurance or find a way to eliminate the fraud it is causing.

This most recent scheme involved multiple small companies and individuals sending medical claims and referrals in violation of the no-fault law.  Everything was under the guise of a named medical doctor who does not really exist.  Allstate’s Special Investigative Unit filed this lawsuit to recoup the more than $1 million it feels it lost.  Allstate Insurance is joined by many other insurers, like Donegal Insurance, and state leaders in New York in their battle to reform the no-fault auto insurance system.

Written by Sara Smart

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Allstate auto insurance announced earlier this week that they are purchasing Esurance and Answer Financial from White Mountains Insurance Group according to the article found on USAToday.com.  Allstate is purchasing the companies for about $1 billion and they said the deal will help them obtain customers who prefer certain brands and value choices.

White Mountains Insurance is based in Hanover, New Hampshire and they expect to see an increase in their book value by $80 per share.  Esurance sells auto insurance directly to drivers through the internet as well as through extensive call centers.  Answer Financial is the independent insurance agency.

This is a big deal and both parties will be affected.  Allstate has agreed to pay $700 million plus the net value of the companies.  The price altogether will be around $1 billion.  Spokeswoman Maryellen Thielen says Allstate expects the deal to reduce earnings the first year or so after the deal closes, but after the first year earning should not drop.  Allstate’s first quarter profit more than quadrupled because it paid out less money for claims.  This profit was way above Wall Street’s expectations.  All in all this is a good step for Allstate who expects to see this acquisition benefit the company in the long term.

In many states teenagers can receive their drivers license at age 16 once they have passed a written test as well as a driving test.  At this point you will need to look into auto insurance for your new driver.  Many auto insurers such as Progressive and Acceptance Insurance offer policies to these young drivers, but rates may be higher and if you add the driver onto your existing policy you can expect to see your premium increase, in some cases relatively drastically.

You can see your auto insurance rates come down over the years with your teen on your policy by encouraging good grades which can earn discounts and demanding safe driving habits.  The Department of Motor Vehicles in various states offer teen driving education from everything like passing the written test to the importance of never drinking and driving.  There are online tools for your Internet savvy teen to browse articles and online quizzes to help educate your child on safety guidelines on the road.

Many auto insurance companies also offer online programs for teens.  USAA Auto Insurance explains to your student how to buy a car as well as how to handle distractions while driving.  State Farm has launched a unique campaign called “Not Now, I’m Driving” (NNID) which has teen-friendly YouTube videos and messages from famous actors sending the message about the importance of never texting while driving.  Allstate and Geico also have programs geared towards making your teen a safer driver which will hopefully save lives and as a nice perk, hopefully facilitate lower auto insurance rates for you over time.

Allstate Auto Insurance, which is a very well respected insurance company, has created an innovative policy for their customers.  The policy is called Your Choice Auto and it provides high quality auto insurance.  Their website provides more details, but here are the highlights:

• Accident forgiveness helps to keep rates low even after one accident
• Safe driving bonus earns you cash for safe driving
• Deductible rewards gives you up to $500 off your deductible for safe driving
• New car replacement gives you a new car if yours is totaled within the 1st three model years

There are numerous different packages offered through the Your Choice Auto program.  According to their website, those who switched to Allstate from another carrier saved on average $480 per year.  Getting auto insurance quotes from a few different companies is the best way to ensure you are getting the most competitive auto insurance rate.

According to the article “7 Desirable Auto Car Insurance Companies” by Matthew Keegan on saycampuslife.com, the insurance commissioner in any given state authorizes who can write auto insurance policies.  The article discusses 7 auto insurance companies that have a national presence with excellent reputations and competitive prices.

The companies discussed in the article include State Farm, Allstate, Government Employees Insurance Company, Progressive, USAA, Liberty Mutual and Nationwide Insurance.  All of these companies are well known and provide an array of benefits.  Having auto insurance is required in most states and important to have in case you are in an accident.

When you do decide to shop around with these or other companies, be sure you are obtaining quotes based on comparable coverage to ensure your comparison is fair.  Most auto insurance companies review your credit as part of determining your rate, so it’s a good idea to pull your credit report and have a good understanding of where you stand.

According to the article “Allstate: More Customers Buying Auto Insurance Online” by Lavonne Kuykendall found on money.cnn.com, auto insurance companies who have relied on agents to bring in new customers are now adapting quickly to Internet sales.

Thomas J. Wilson, the chief executive of Allstate Corp, says their goal is to have fewer, larger agencies that offer a more consistent experience for policyholders.  He also said that half of its new auto insurance policyholders first make contact through the Allstate website.  Allstate is quickly adjusting to meet customer Internet demands.

The article points out that Allstate’s plan calls for fewer agents with an enhanced local presence.  About 87% of web site shoppers end up closing the deal with an agent so agencies continue to be an important part of their plan.  This is particularly true for homeowners with more than one car who often prefer using an agent because the policy can get complicated.

Allstate Auto Insurance recently gathered data that showed an increase in Texas auto insurance claims for hit pedestrians during the week of Halloween.  This is according to the article “Texas Pedestrian Accidents Jump 23% During Halloween” by Kristen Beaman for Allstate found on reuters.com. 

Allstate looked at claims in Texas over the last 5 years and found a large jump in accidents around trick or treating.  Last year, Allstate claims more than doubled over the Halloween week compared with the rest of 2008.  Their data matches up with a report from the Insurance Institute for Highway Safety which showed that October 31 is the 2nd highest day of the year for pedestrian deaths.  The first is Fourth of July.  With Halloween falling on a weekend this year, there may be more people out than normal so it’s crucial that drivers are extra careful. 

The article offers some important tips to follow while out on the road, especially at night when pedestrians are out.  Never drink and drive.  A designated driver should always be assigned before heading out for the evening.  Texting while driving can be very dangerous so keep your phone in your pocket until you can pull over to text or make a call.  As a pedestrian, it’s a good idea to avoid texting while walking.  Anything that takes your eyes off the road can be very dangerous.  Not only will following these steps make you a safer driver but it may eventually lower your car insurance quotes.

According to the article “Collision City” by Jeff Gelles from the Philadelphia Inquirer, Allstate Auto Insurance examined which cities have the best and worst driving record in their 5th annul Best Drivers Study.

The study shows that on average, Allstate’s Philadelphia policyholders have collisions once every 6.4 years. New Yorkers have eight years between accidents, Clevelander drivers 10.7 years, and  Sioux Falls, S.D., 13.5 years.  Philadephia was ranked worst among largest cities.  This does affect Pennsylvania auto insurance rates and if you live in Phillie you understand the high costs.

Pennsylvania state officials and traffic-safety experts aren’t convinced by the findings.  Spokeswoman for PA Department of Transportation, Jenny Robinson, stated that 2008 was Philadephia’s best year in a decade according to PennDot’s count of “reportable crashes” which include accidents that result in death or injury, or require a vehicle to be towed.  Martin T. Pietrucha is a civil engineer who studies the “human factors” in car crashes, and he thinks Allstate’s claims data may be skewed if Philadelphia drivers are more likely to report small accidents to their auto insurance companies.

Whether or not Allstate’s study is completely reliable, one thing remains sure.  Their findings ultimately translate to the cost of their customer’s auto insurance rates.

Auto insurance companies are supporting the US Olympics.  According to an article on Allstate Insurance’s website, Allstate is sponsoring the 2010 Olympic games which are being held in Vancouver.  Allstate has been sponsoring Olympic games since 2002.  They were the official Home and Auto Insurance sponsor of the Salt Lake Olympic Winter Games. 

Allstate is also sponsoring the US Olympic Hall of Fame Induction Ceremony being held in Chicago, Illinois.  The nominees were announced in April according to TeamUSA.org, which included 15 individuals, 5 teams and 5 Paralympians.  Voting by fans will be going on through June 16th.  The inducted group will include 5 individuals, 1 team, 1 Paralympian, a coach, a veteran and a special contributor.  The reveal of the inductees will be in July and they will be honored on August 12th at Chicago’s McCormick Place.   This is the only national sports Hall of Fame that has fans vote for the inductees. 

Nominees for this 2009 induction class were selected by a nominating committee with 10 people which included athletes, current members of the US Olympic Hall of Fame, historians and USOC representatives.  Allstate states they are proud to be supporting the dedicated athletes and look forward to supporting the US Olympics in the future.

According to the article ”Games for Cheaper Auto Insurance” by AJ Glasser on Kotaku’s website, Allstate Insurance is teaming up with a San Francisco start up, Posit Science, to look into brain training video games to improve driving skills and decrease auto insurance rates.

Posit developed a program called InSight, which has five brain exercises.  Posit states that these types of games can improve visual processing, such as peripheral vision and divided attention needed for driving.  Allstate is currently experimenting with the game’s ability to improve driving skills. 

If they have positive results, Assistant Vice President in Research and Marketing, Tom Warden, states that they could end up using a high score as a way to discount auto insurance rates for their customers.  The author said he played the demo on Posit’s site and he thought it was challenging, but fun.  This could be an unique way to attract certain customers to Allstate Auto Insurance if they end up implementing such a discount.