Smart Auto Insurance Blog

Delaware auto insurance rates are going up for State Farm customers in that state.  According to Online Auto Insurance News’ John Pirro, “State Farm car insurance rates to rise for Delaware policyholders.”  Starting today, rates will be increasing around 1.9% in Delaware.  State Farm is the second biggest auto insurance company in Delaware behind Nationwide.  Their market share is 22 percent and they say that they’re raising rates so they can keep the financial promises they have made to those customers.

Many factors will determine the amount of individual policyholder increases, including their particular coverage and any discounts they maintain.  All liability and personal injury protection coverage will be increasing.  Collision and comprehensive costs, however, will be increasing for some but decreasing for others.  From 2006 to 2008, PIP claims increased 10% and property liability claims increased 4.5%.  State Farm is also raising Michigan and Wisconsin auto insurance rates, while they are decreasing Illinois, Alabama, and Georgia auto insurance rates.

The Wisconsin auto insurance bill mentioned in the previous blog has been passed according to the article on BadgerHerald.com by Andrew Averill.  The bill will lower coverage limits for auto insurance which were originally raised in an attempt to save consumers money, but the Democrats have other suggestions to repair the budget.

Currently the law requires auto insurance companies to cover $50,000 for accidents causing bodily injury, $100,000 for two or more persons and $15,000 for property damage.  The limits will be changed to $25,000, $50,000 and $10,000 respectively with the passing on this new bill in Wisconsin.  Assembly Speaker, Jeff Fitzgerald, believes the previous law raised auto insurance rates for families and limited choices to the consumer shopping around to compare auto insurance.

Fitzgerald also goes on to say that the new bill will help consumers decide for themselves what level of coverage is best for their family, and it should make auto insurance more affordable for lower to middle class income families.  He believes it’s the perfect blend of consumer choice and consumer responsibility.  Others argue that the new bill will take away some consumer protections, but now that’s it is going to be signed into law people are focusing on the positives and hoping for the best.

The Wisconsin Assembly is voting today on a bill which will eliminate some of the higher minimum levels for auto insurance that Democrats put in place back in 2009.  Wisconsin would still have to purchase Wisconsin auto insurance, but supporters say consumers will have lower auto insurance rates and more options to choose from if all goes as planned.

According to the article “Assembly Set to Roll Back Auto Insurance Levels” found on WTAQ.com, critics of the bill say accident victims could be left with a larger bill because their damages would be more than the person’s auto insurance policy coverage.  The bill would end some major consumer protections as well.  If would end “stacking” which is where a driver can use liability on up to 3 of their cars to claim damages when one car gets in an accident.

This bill would also bring back reducing clauses.  This measure reduces a policyholder’s benefits for drivers who are under-insured and high risk drivers would be placed into a class by themselves with high auto insurance rates than others.  The Governor of Wisconsin, Scott Walker, supports the measure and it will be soon determined which way the vote will go.  Many states are facing similar decisions with their auto insurance laws, but Wisconsin is proactively trying to make changes.

According to the article “Mandatory Auto Insurance Hits Wisconsin” by Hilary Dickinson on beloitdailynews.com, as of Tuesday Wisconsin drivers face a $500 fine maximum if they are caught driving without auto insurance.  This is a big change for Wisconsin auto insurance policy holders.

Wisconsin is the 49th state to make auto insurance mandatory and some auto insurance agents question whether or not the new law will be effective.  The new law requires drivers to carry proof of insurance with them when they are driving and one policy card should be kept in the vehicle at all times.  If a driver is pulled over and has insurance, but cannot prove it with a policy card then they may face a ticket.

Some experts wonder if the fines are going to be enough of an incentive for them to purchase auto insurance.  With auto insurance rates for high risk drivers being relatively high, it may be cheaper for them to take the risk of not having insurance at all.  There hasn’t been a huge increase in Wisconsin drivers shopping for auto insurance.  People who would abide such law already have auto insurance because it’s the responsible thing to do since Wisconsin already mandates drivers to be responsible for an accident financially.

Wisconsin is now requiring all drivers to carry auto insurance and with increased coverage, it could mean increased premiums.  According to the article “Auto Insurance Changes for June” by Kristin Crowley on fox11online.com the law that was meant to increase driver safety may backfire.

As coverages for Wisconsin auto insurance increases so will premium costs, which may cause more people to go without auto insurance.  This goes against the whole reason for the new law in the first place.  Wisconsin Insurance Alliance President Andy Franken states that about 14% of Wisconsin drivers are currently uninsured.

It is still to be determined how premiums will be affected by the new law, but one thing is for sure.  If you choose to drive without insurance it’s going to cost you.  The Wisconsin Department of Motor Vehicles states that driving without insurance will cost up to $500.  Even more expensive is fraudulent insurance issues which will be fines up to $5,000.

It has been a common practice of auto insurance companies to use location as a factor in determining auto insurance rates.  According to the article “Proposal would eliminate ZIP codes as factor in Wisconsin car insurance rates” by Paul Gores of the Journal Sentinel, WI state legislature wants auto insurance companies to stop using zip codes.

Some of the Democratic legislators have brought this plan back despite a similar plan being vetoed by Gov. Jim Doyle back in June.  Auto insurance rates can be up to 60% higher in areas that are heavily populated.  This may seem unfair for those living in urban areas, but the auto insurance companies claim it is part of mitigating risk.  The current system gives higher rates to those in bigger cities because more theft, accidents and vandalism generally occurs in these areas.

The auto insurance companies also point out that if zip code was not allowed to be a factor, rates would increase substantially for those living in rural areas.  There would simply be an overall redistribution of premiums.  Auto insurance companies look at many different factors including driving record and credit score.  The Governor will have to review this bill and see if it will be considered.

As of June 1, 2010, Wisconsin will become the 49th state in the US to require drivers to have auto insurance coverage.  The only state left to not have this requirement will be New Hampshire.  This is according to the article “Are you a Wisconsin driver? You’ll need auto insurance by June” by Paul Gores on JSOnline.com. 

It is surprising to many that there are still 2 states that do not require auto insurance since 48 states have required it for years.  Senator John Lehman (D-Racine) believes having auto insurance is viewed as a responsibility of being a good US citizen.  If you cannot manage affordable auto insurance, then you probably cannot afford to pay if you are in an accident, therefore should not be on the road to begin with. 

But the Insurance Information Institute in NY is questioning the effectiveness of having an auto insurance mandate anywhere.  A study by the Insurance Research Council estimates that in 2007, 15% of Wisconsin drivers were uninsured, and that is only slightly higher than the national average of 13.8%.  Even in the states where proof of insurance is required to register a car or get a license, it doesn’t mean the driver is keeping the insurance once they walk out the door.  They can very easily turn around and cancel their policy or just not pay their premiums to save money.  The only way they would get caught is if they were in an accident or got pulled over.  This is of course against the law in 48, soon to be 49 states.  Whether your state requires auto insurance or not, there is no question that it’s important to be covered for your financial safety and for the safety of other drivers on the road. Getting multiple auto insurance quotes is the best way to see what’s available.

According to the article “Car Insurance Mandate in Wisconsin Budget; No Driver’s Card for Illegals” on insurancejournal.com, Wisconsin auto insurance policy holders will have to buy liability insurance for their cars, but illegal immigrants will not be issued special cards to drive legally.  This is under the new proposed Wisconsin budget legislature.

This new requirement has been considered and proposed since the 70’s, but never put through because of the insurance industry.  Governor Jim Doyle has expressed his support for the new proposal.  It would take effect next year.  Anyone pulled over with no insurance card would be subject to a fine of $10.

Posing more of a debate was the driver’s card for illegal immigrants.  Immigrant rights groups and the police argue for the cards claiming they make the roads safer by ensuring everyone, even illegal immigrants, carry ID and are able to get auto insurance.  Doyle did not propose this and the Senate rejected it in the Wisconsin budget.

According to the article “Are Your Car Insurance Rates About To Go Up?” by Dan O’Donnell on 620wtmj.com, Previant Law Firm put together some information outlining how the 2009 budget might impact your Wisconsin auto insurance.

The main note is that minimum liability limits will be increased.  They discuss 7 key points on minimum liability coverage.

1. Minimum liability coverage was established to ensure the insured had adequate coverage
2. Coverages were set back in 1982 last
3. Limits are now being raised to reflect today’s costs
4. New proposed limits are $100,000/$300,000/$25,000
5. This will affect 20-25% of insured drivers
6. 75%-80% of drivers already have higher limits so should not see any impact
7. The cost to your auto insurance rates should be small compared to how much more coverage would you would receive

According to the article “Insurer Groups at Odd with Proposed Wisconsin Auto Insurance Bill” on insurancejournal.com, Wisconsin lawmakers have proposed legislation that would increase Wisconsin auto insurance rates for low and middle income auto insurance customers.  This information is according to the National Association of Mutual Insurance Companies and the Property Casualty Insurers Association of America. 

Twenty to twenty-five percent of all insured drivers in WI would be negatively affected by this new Wisconsin auto insurance provision which is in Governor Doyle’s budget.  The initiative includes increasing the required per-person injury limit 4 times the current level by raising personal auto insurance financial responsibility limits, increasing the minimum on medical payments to $100k and also making UM coverage and UIM coverage mandatory at 100/300 limits. 

PCI shows that low and middle income insurance customers in the west, southwest, north and east central counties of WI would have the highest percentage increase in their liability premiums.  Milwaukee would receive the highest dollar increase.