Smart Auto Insurance Blog

Did you know that your auto insurance company can charge you higher rates if you are close to the limits on your credit cards or have filed bankruptcy in the past?  In most states, they can.  In 47 states and the nation’s capital, credit-based car insurance pricing is allowed and is commonly used.  This so-called insurance scoring has been used for more than a decade, but will be outlawed soon if some opponents have their way.  According to Insurance News Net’s “OAI: Auto Insurance Scoring Bill Highlights Controversial Practice,” three Democratic House members have a bill they hope will end the process of insurance scoring.

Currently, when you are looking to get a quote on auto insurance, in most states insurers will look into your financial history before making your quote.  They can increase your premium based on your applications for new credit, how close you are to your debt limits, and other financial factors.  Many different states have already tried this type of bill on the state level to no avail.  If state auto insurance legislation is any indicator of how this bill will fare federally, it has quite a difficult path to follow.  Massachusetts is the only state that has passed a recent ban, but it was just an update of an existing ban on this insurance practice.

There are two hotly debated sides to this issue and both have their points to be made.  Supporters of insurance scoring say that studies show that people with bad finances tend to file more auto insurance claims and bigger claims than those with a sound financial history.  Based on this they say that pricing is more fair and accurate when insurance scoring is used.  Without it, those with strong financial backgrounds would be paying more than they should to compensate for those with poor financial histories.  Opponents of the program say that lower income drivers are already struggling and this will catastrophically hurt those who are trying to do the right thing by carrying auto insurance.  We’ll keep you updated with where this bill goes.

The day after the Super Bowl is typically all about the commercials.  Today is no different.  While I didn’t notice any commercials from auto insurance companies, I sure did notice a lot of them from the auto companies themselves.  I guess it’s nice that your auto insurance company isn’t spending millions of dollars to advertise during a 30 second spot, maybe to help keep your auto insurance rates lower.

Some of the auto manufacturers who ran Super Bowl commercials succeeded with the most talked about ads.  Volkswagen had to compete with their much loved Darth Vader commercial from last year and they used a dog to fill that void.  Chrysler’s Halftime in America spot with Clint Eastwood had people crying, thinking, and hoping for America.  Toyota, Cadillac, Audi, and Hyundai ran some of the other memorable ads from auto companies.

With all of the money spent on these ads, I wonder if auto manufacturers will see a large increase in sales.  If so, that could mean big business for auto insurance companies including an influx of new quotes on auto insurance.  More demand or changing demand for auto insurance could mean more competition from insurers and better rates for consumers.  So while auto insurance companies weren’t spending big money on Super Bowl commercials, that doesn’t mean that they won’t be affected by auto companies’ commercials.

According to multiple company press releases through Business Wire, Progressive auto insurance is hiring in Tampa, Colorado Springs, Austin, Cleveland and Phoenix.  Florida’s unemployment rate is close to 10%, so opening up 390 jobs in Tampa is a big boost to the economy.  The positions run throughout sales, claims and service at the Riverview contact center.  Progressive is known for being a great employer partly because of their on site fitness and medical facilities as well as a casual dress code.  The St. Petersburg Times voted Progressive auto insurance one of the top places to work in Tampa.  At the Cleveland home office facility, Progressive is hiring 337 new workers.  They are also hiring 65 workers in Phoenix.

In Austin, Progressive is adding 185 of the same type of positions in their Texas facility.  Texas has an unemployment rate of almost 8%, so these service, sales and claims jobs are just what the city of Austin needs.  Progressive pays employees for all training and also offers them the benefits of medical, life, vision, and dental insurance.  At Progressive’s Colorado Springs facility, they will be hiring 129 new faces.  The company is looking for people with some background in customer service.  New employees will help with quotes on auto insurance as well as sales and claims.  Progressive has a long list of amenities and benefits to offer their employees which is a big reason they are such a popular auto insurance company.  Happy employees take good care of their customers and Progressive is looking to add 1,106 employees by July.

Hurricane Irene has devastated many areas of the US and its estimated that at least 18 people have died as the storm moved from the Caribbean all the way up to New England.  The article “Hurricane Irene’s Damage, State by State” by Drew Armstrong on Bloomberg.com states that about $3 billion in damages have occurred and power was out in over 6 million homes and businesses throughout the east coast.

State Farm Mutual Automobile Insurance Company is the largest US home and auto insurance company in the nation and they’ve reported about 1600 homeowners insurance claims and about 500 auto insurance claims in just North Carolina and Virgina.  The number of claims will surely increase over the coming weeks.  State Farm received reports of siding and roofs blown off of houses and much destruction from the falling of trees.  There have even been claims for loss of food since the power outages have made food in refrigerators spoil quickly.

In the New York area, where the storm had weakened, claims are standing at about 360 homeowners’ claims and 60 auto insurance claims, but this is only after a few days.  People are still getting settled and assessing damage before calling their insurance company.  Storms such as Irene can cause slight increases in auto insurance quotes to account for all of the claims, but this generally happens over time.  Insurers across the nation are working hard to fulfill claims as efficiently as they can to ensure costs do not soar.  Sometimes, when there are heavy claims filed, insurers are quick to give out money to save time.  Hopefully insurance companies were prepared enough for this storm that it will not happen this way across the board.

Written by Sara Smart

Follow me on Twitter: http://twitter.com/#!/SaraSmart55

Auto insurance quotes can be higher on cars that are the most commonly stolen.  Knowing this can help you make a decision on what type of car you want to purchase when you start to compare auto insurance policies.  The National Insurance Crime Bureau (NICB) recently announced their findings for 2010 in the most commonly stolen vehicle types and consumers are anxious to know.

It’s no surprise that for the third straight year in a row the 1994 Honda Accord is the most stolen car for 2010.  Over 50,000 Accords were stolen in 2010 according to the article “The Most Commonly Stolen Vehicles In The United States” on US Insurance Online.  It’s suggested that weak security systems and a continuously high demand for parts are the two main reasons that the ‘94 Accord continues to be stolen the most.

The spokesperson for NICB, Frank Scafidi, says there is a black market for important parts and sometimes cars are worth more for their parts than they are when they are still in tact.  Between 2002 and 2009 there were many more foreign cars on the top 10 list when compared with domestic models.  In 2010, there were actually six American models on the list which is a turn in the trend.  The Honda Accord, Honda Civic and Toyota Camry were the three top most stolen cars in 2010, so consider this when purchasing your car considering your auto insurance rates many be higher due to the high theft.

Written by Sara Smart

Follow me on Twitter: http://twitter.com/#!/SaraSmart55

Florida has not had a hurricane for years, yet Florida auto insurance quotes continue to rise.  It’s been six years since the devastating Hurricane Wilma took it’s toll and since then every day claims for homeowners and auto insurance, including reopened claims, have risen 80%.  At this point insurers feel like there is not choice but to ask for higher homeowners and auto insurance rates according to the article “Soaring Claims Drive Florida Insurance Rates Higher” by Kenric Ward on SunshineStateNews.com.

Insurance companies are asking for rate increased for a couple of reasons.  First, there is a certain projection of future claims due to natural disasters and most states witness this type of increase.  Secondly, they are raising rates due to claims that have already been paid out that went above and beyond previous predictions.  Lynne McChristian, a Florida representative for the Insurance Information Institute confirms that these rate increases are due to future and past claims.

Just recently, Allstate Insurance Co and two of their affiliates asked for rate increases averaging 30%.  Castle Key Insurance Co. and Castle Key Indemnity Co. reported that there could be rates increases as high as 68% for individual customers.  These astronomical rate increases can devastate families financially, but it seems to be a no-win situation for everyone involved.  Some industry officials are blaming such increases on a new law, only affecting the state of Florida, which says insurers must pay full replacement costs for home repair upfront.  In addition to this, policyholders have up to five years to file a claim due to a particular hurricane which is throwing projections off.  The Insurance Information Institute reports that claims costs are increasing on average around 17% per year, and if this continues, no one will be able to afford a quality home or auto insurance policy.

Written by Sara Smart

Follow me on Twitter: http://twitter.com/#!/SaraSmart55

Car sales continue to be less than desirable for many car makers across the nation in 2011, but GM is looking to change that.  To stay competitive and offer something different, GM is looking to offer free auto insurance coverage to new car buyers according to the article on USA Today by Chris Woodyard.

Uninsured drivers is a problem across the nation, including states like California and Oregon.  These two states are the location of this free auto insurance test where people who buy a new GM car will receive a year long policy from MetLife Auto Insurance completely free of charge.  This will not only save a customer money, but will save them time searching for auto insurance quotes.  It’s a quality policy, including both liability and physical damage coverage and exceeds the auto insurance requirements for both states.  The offer is only good until September 6th and applies to 2010, 2011, and 2012 Chevrolet, Buick, GMC and Cadillac cars, crossovers and trucks.

GM hopes to bring in more buyers with this unique offer.  The policy will cover the car and anyone who drives it with the owner’s permission for the entire year from the date of purchase.  GM is still in the testing phase of this offer to determine if it will appeal to a wide group of buyers.  The owner does not have to renew the policy at the end of the year, but this could be a great opportunity for MetLife Auto to reel in more customers as well.  Very interesting concept and curious to see how it all pans out.

Purchasing auto insurance coverage can be complicated and is not as straightforward and some might think.  There is a lot to consider when shopping around for a policy and knowing the facts upfront will help you make the best decision.  J. Edward Knight & Co helps to put some rumors to rest out there about auto insurance in the article “Fact vs Fiction: Uncovering Auto Insurance Myths” on Waldo.VillageSoup.com.

The first myth discussed is that full coverage will include everything if you happen to be in an accident.  In most states, only liability insurance is required so be sure to understand what is actually covered in your policy.  Next, many people think you are required to get three estimates when looking for someone to fix your wrecked car.  While some insurers require this, many don’t so it might be a perk to look out for when you compare auto insurance quotes.

The next myth is that your auto insurance rates will automatically increase if you are in an accident.  The truth is, more and more auto insurance companies are giving graces to good customers so their rates don’t automatically jump after just one accident.  Definitely worth looking into.  Also, do not assume your car is covered if you lend it to someone and they are involved in an accident.  Sometimes it involves having a specific addition to your policy.  And the last myth talked about in the article deals with purchasing a new car.  Most auto insurance companies require that you notify them with the purchase of a new vehicle and despite what many people think, the DMV does not automatically update vehicle information with insurance companies.

Written by Sara Smart

Follow me on Twitter: http://twitter.com/#!/JoannaCliff78

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>

It’s becoming common knowledge that having a good credit score will save you money on your auto insurance rates, but it’s unclear exactly how much it will save you.  Based on a recent CarInsurance.com study, drivers with credit ratings over 750 save about $783 a year on their auto insurance quotes when compared with a typical driver in the same age group with average credit scores.  The study used 42,809 auto insurance quotes to determine this figure and the results are surprising.

If you calculate this out over a lifetime of driving, a person with excellent credit can save approximately $22,815 on their auto insurance premiums.  Credit is only one factor out of many that insurers use to calculate quotes but it’s becoming increasingly important.  Auto insurance companies strongly defend their use of the score despite many consumers finding it unfair.  Insurers have found a direct correlation between someone’s credit rating and the chances of them filing a claim.  Regardless of the reasoning behind this connection, there is a connection and it makes sense for insurers to use this information.

The good news is that you have control over your credit score.  Even if you have filed bankruptcy or charged off some accounts, you can repair your credit through time and bill management.  It’s important to keep your credit card debt down and make all of your payments on time.  It may take a few years, but once your credit score has improved you can start to compare auto insurance quotes and hopefully see a difference in the rates you receive.