Smart Auto Insurance Blog

There is a fairly unique system in place regarding auto insurance rates in North Carolina.  The Daily Reflector published an article by Gary D. Robertson of the Associated Press entitled, “NC lawmakers look at auto insurance risks, costs.”  This article explains the current debate in North Carolina over whether it is more important for overall auto insurance rates to be low or for individual drivers to pay more based on their risk.

About 20% of North Carolina’s 7 million insured car owners are in a high risk insurance pool.  Called the North Carolina Reinsurance Facility, the high risk pool is for drivers that cannot otherwise get insurance from companies because of their past history of riskier driving.  Rates are around 30% higher for those in the high risk pool, but 70% of those in the pool haven’t had any type of risky driving is over three years.  These drivers don’t pay the extra 30% premium, so their premiums fall flat of covering their expenses and losses.

There is a clear divide in the state as to whether this pool needs to be altered or dismantled.  Insurers like State Farm, Geico, and Progressive agree with trade associations that want the ability to better match rates with driver risk.  This would call for the elimination of the North Carolina Rate Pool, which sets the rates that North Carolina insurers are allowed to charge.  But Nationwide and other insurance companies think the system works well and point out that North Carolina has the 7th lowest insurance rates in the nation.  North Carolina’s insurance market is competitive, their insurers make profits, and their overall rates are low.  But many believe that their huge high risk pool needs some changes.

Written by Sara Smart

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State Farm auto insurance offers pay-as-you-drive auto insurance policies in California, Ohio, Texas and Illinois.  Progressive Insurance offers it as well throughout the US.  It’s getting more and more popular.  According to the article “Low-Mileage Drivers Benefit From Insurers’ Pay-As-You-Drive Plans” by Eve Mitchell on BellinghamHerald.com, auto insurance rates are tied to part of the actual number of miles driven and many consumers are seeing big savings.

State Farm specifically calls their program the Drive Safe & Save program and drivers can self-report their mileage online or at an agent’s office before they renew their policy.  Customers who drive General Motors, Saab, and Saturn vehicles with OnStar technology and have a diagnostics account can have their actual mileage sent right to State Farm for updating.  Drivers are paying better attention to how they drive in hopes that it will ultimately save them money on their quotes on auto insurance.

The pay-as-you-drive momentum is party due to California’s Proposition 103 which was the landmark auto insurance reform bill passed by voters back in 1988.  It requires insurance companies to base rates primarily on the customer’s driving record, number of miles driven per year, and driving experience.  More recent regulations allow actual mileage to be a voluntary alternative to estimated mileage and it makes it possible for auto insurance companies to obtain mileage verification from devices inside the car.  Any savings from actual miles driven are applied once the policy is renewed.  Drivers who are not on the road that often really appreciate this initiative and are hoping to see big savings over time on their auto insurance.

A new survey shows a concerning trend.  Of the 1000 Americans with auto insurance surveyed, many have confusion over what to do in the case of an auto accident according to the press release “New Survey Reveals Uncertainty on How to Respond When Auto Accidents Happen” from State Farm found on PR News Wire’s site.

About half of respondents feel it’s against the law to refuse to report an accident to an insurance company while 41% think it’s ok to not go through insurance.  74% say they are a witness to an accident if they are within 100 ft and 66% say being a witness means not getting involved.

One third of respondents believe that saying “I’m sorry” is more than just an apology and doesn’t admit fault.  83% of Americans stated they are likely to pull over if they witnessed an accident which did not involve them.  These questions don’t necessarily have clear cut answers and need evaluations for each unique situation.  Auto insurance is crucial, but if you don’t know the ins and outs of your policy you can be left confused and misinformed.  Each policy is different as well, so you need to compare auto insurance companies to fully understand what type of coverage you have.

JD Power recently released Auto Insurance Provider Ratings report in the 2009 National Auto Insurance Study.  They ranked various auto insurance companies and State Farm Auto Insurance ranked very well.

In the category of overall satisfaction State Farm received the score of “better than most”.  This is based on how customers rate all aspects of their service experience with the insurer.  In the category of contacting the insurance company State Farm received the ranking of “among the best”.  This is great to know when shopping around since you need your insurance company the most during stressful times and you do not want to worry about not being able to get in touch with them.

In the category of policy offerings State Farm ranked “better than most” and they received the same ranking in billing and payment.  Billing and payment scoring is based on how customers rate the clarity, timeliness, and accuracy of their bills as well as the overall payment process.  Using this type of report when you compare auto insurance quotes can be extremely useful to see who is coming out on top.  It can save you a lot of time to have all the information on one useful chart.  Visit JD Power’s site for more detailed information on the rankings.

The JD Power 2009 National Auto Insurance Study rankings are out and Amica Mutual stays strong as the award recipient.  The detailed rankings can be viewed on JD Power’s website.  USAA and the New Jersey Manufacturers Insurance Co. both ranked very high as well but are not included in the rankings since they are exclusive auto insurance groups.

Amica Mutual ranked among the best for all the categories which include overall satisfaction, contacting the insurer, policy offerings, billing and payment, and pricing.  Contacting the insurer is a score based on how customers rate their experience dealing with the auto insurance company in terms of an agent, call center representative, website, or an automated phone system.  This may include getting car insurance quotes.

Policy offerings is based on how customers rate the type and variety of coverage options offered by the insurer.  It also factors in the extent in which the company meets their needs.  Billing and payment is based on timeliness, accuracy, and the clarity of billing statements, and the overall payment process whether through regular mail or the internet.  Pricing factors in the actual cost as well as the type of coverage at that price.  Shelter Insurance and State Farm also ranked well in the study.

State Farm Insurance, which carries many different types of insurance including auto insurance and health insurance, is giving the nation a challenge.  It’s a challenge to lose 50 million pounds across the country according to the article “Insurance agency challenges Americans to lose weight” on wqow.com. 

State Farm agent Bob Johnson states that the healthier you are the less you see the doctor which will ultimately affect your insurance rates.  Not to mention if you are healthier and take good care of yourself you will live a longer, more quality life. 

Registration is online and participants can track their progress as well as get tips on how to lead a healthier life.  State Farm is offering a kit as well which includes a pedometer and an information booklet.  This is a great example of insurance companies supporting a greater cause.  pivemrg678

According to an article on coosavalleynews.com by Tony Potts, State Farm auto insurance is reminding everyone that the Federal Government’s Car Allowance Rebate System (CARS program or “Cash for Clunkers”) has an auto insurance requirement.

Last week the US Senate agreed to extend the CARS program until Labor Day which is a great opportunity for more car owners to take advantage of the tax benefit.  By trading in an older car for a new one, tax credits will be given.  But there are stipulations, one of which includes auto insurance.  Trade-in cars must  be registered and insured for the full year before trading in.  This is an important reminder of how crucial it is for all autos to be covered by insurance.  Uninsured drivers pose a risk to everyone on the road, not to mention it’s the law in most states.

According to the article “Shops debate the place of insurers in the repair process” by Brian Albright on SearchAutoParts.com, car designs have become more complicated and costly which is causing auto insurance companies to become more involved in the repair process.

Conflicts often arise between repairers and insurers as the insurance companies pressure shops to reduce costs.  The repair shops often see this as unnecessary meddling as they deal with their own financial pressures.  Most shops prefer that the insurance company cut a check and stay our of the repair process, but customers find value in the insurers taking over and the insurance companies want to keep costs down as much as possible. 

Not all insurance companies get in the way.  State Farm auto insurance is generally regarded as cooperative according to this article.  Recently they have engaged in programs looking for efficiencies in the repair business.  While some independent shops see this as intrusive, others see it as positive.  Gene Regan is a general manager at Causeway Collision Center in Manahawkin, NJ and he believes it’s a good thing State Farm is getting involved.  He sees the programs bringing the shops and insurance companies together to practice better business, and that ultimately will benefit the mutual customers.

Iowa auto insurance consumers are in for some price increases.  According to the article “State Farm to Increase Iowa Auto Insurance Rates” by Karen Mracek on desmoinesregister.com, State Farm Auto Insurance is raising some prices in the state by an average of 2.2% by July 27.

Auto insurance rates for comprehensive coverage and collision are increasing the most and the cost of liability is also going up.  The cost of medical payments will be remaining the same for most customers.  The premium changes will vary from customer to customer based on what kind of policy they have, where they live and the type of car they insure.

State Farm is the largest insurer in Iowa, insuring about 1 out of every 5 cars on the road.  The increases are caused by the influx of claims over the year, but even after this increase State Farm’s overall rates are still much lower than they were 5 years ago by over 12%.  State Farm is still committed to keeping prices reasonable for their customers.

The commissioner of the LPGA, Carolyn Bivens, says she has had a series of conversations with State Farm Auto Insurance about the future of the LPGA event in Springfield, IL.  She is optimistic about an agreement being reached between State Farm and the LPGA for a new title-sponsorship contract.  She did not say if or when the agreement would be reached according to The State Journal-Register. 

During these tough economic times, few sports are getting automatic renewals but Bivens is encouraged by State Farm Insurance’s efforts to support the local LPGA tournament event.  As many companies are holding back, State Farm is stepping up to invest in the community and the LPGA.