Last month, we talked about California’s Proposition 33, which went to vote along with the Presidential election on Tuesday.  Prop. 33 would have let auto insurance companies offer discounted rates to drivers who have maintained a long history of coverage, regardless of which company was covering their vehicle.  The San Francisco Chronicle’s Drew Joseph gives us the results of California’s vote in “Prop. 33: Car insurance changes defeated.”

Insurance companies are able to offer lower car insurance quotes to drivers who have maintained insurance coverage with their company, but continuous coverage discounts were not allowed to be transferred to another insurer.  Voters have rejected Prop. 33, so nothing will change in that respect, much to the dismay of Mercury Insurance’s George Joseph.  He offered $16.9 million, or 99% of the funds used to campaign for Prop. 33.  Opponents of the Proposition raised less than $300,000.

Two years ago, Prop. 17 asked Californians to pass a similar law regarding the transfer of car insurance coverage discounts.  That failed as well, although it was close to passing.  George Joseph of Mercury and other supporters said that even more residents would get insurance discounts with Prop. 33 than would have with Prop. 17.  But opponents of both issues said that too many people would be punished with higher auto insurance premiums to make up for the discounts offered to others.  They pointed specifically to the large amount of unemployed Californians that may be without auto insurance for a significant period of time.  The discounts offered to some drivers would have to be financed by others getting punished.  It remains to be seen whether Prop. 33 will be put on the ballot again under a different number, but George Joseph seems to have a lot of funds to put towards his cause.

Hurricane Sandy, aka “Frankenstorm”, is approaching the east coast of the United States and is expected to hit in the next few days.  As Americans make preparations for the storm by stocking up on food and water or even evacuating their homes, auto insurance companies are making preparations for Hurricane Sandy as well.  Reuters’ Ben Berkowitz talks about what they are doing in “Insurers prepare for impact of Hurricane Sandy.”  Insurers are ready for a storm of their own once the claims start filing in.  They prepare for big storms like this by prepping claims teams and sending adjusters to the locations they believe will be hit the hardest.

A spokesman for Travelers Insurance said that they have employees and other resources positioned so that their clients will get help as soon as possible after the storm hits.  They are the second largest personal home, auto, and commercial insurer in Connecticut and the third largest in New York.  Customers in both of those states are expected to be hit hard by Hurricane Sandy.  Travelers has also had to put plans in place to keep their business running smoothly across the country since a large number of employees will be working in those two states.

Lucky for insurance companies, 2012 hasn’t been too bad of a year for financial losses.  With billions of dollars of losses forecasted for Hurricane Sandy, the industry is braced to handle the claims and doesn’t expect any delay in processing because of the storm.  State Farm is the leading insurer in New York and New Jersey.  They said that they have catastrophe teams waiting to respond when the storm hits.  Allstate has teams waiting in North Carolina, Virginia, and Pennsylvania.  Private insurance companies think that the majority of their claims will be from wind damage to autos and roofs.  They also worry about business losses if businesses are out of power for a prolonged time.  Insurers are pleading with Americans to heed evacuation orders before it is too late to reduce some claims.

I just read an article insinuating that car rental companies might actually be forging your signature to add car insurance to your rental that you didn’t even want.  Most car insurance companies cover a rental car if you need one while yours is getting fixed.  But car rental companies make money off of the additional things they charge you for, so there have been recent allegations that some rental companies are charging you for car insurance you don’t need or want.  Recently, Dollar Rent A Car at the Denver airport was accused of charging a Florida man for car rental insurance without his permission.  This information comes from The Seattle Times article “Is rental-car insurance a scam?,” by Christopher Elliott.

Dollar insisted that the Florida driver had signed his consent for $215 in car rental insurance and $53 in roadside assistance for the rental car he drove for a few days.  When the charges were disputed, Dollar sent a form letter to the driver.  But he also disputed the charges with his credit card company and they believed him and refunded his credit card.  Dollar sent a copy of the supposed signature adding the extra coverage and this particular driver says that it was forged.  Not only did he not sign opting for the extra charges, he didn’t even need that coverage because he had personal auto insurance to cover rental cars as well.

A lawyer and consumer advocate told The Seattle Times that there have been hundreds of other consumers saying that this same thing has happened to them.  Unfortunately many consumers give up after their initial dispute and pay the bill because they don’t think they have a chance to fight any further or don’t want to spend the time fighting in court.  Since there is no type of legislation or regulation on this matter by the federal government, car rental companies don’t have much concern over lawsuits here and there.  Employees working for minimum wage are often pressured to up-sell extra coverage and receive large commissions.  With e-signatures becoming the norm, car rental insurance fraud and other car rental extras might be easier for these employees to pull off.  Read everything you sign and keep copies, especially when it comes to dealing with companies that have a history of fraudulent complaints.

Business Insider published an article by Emmet Pierce to let consumers know “The Seven Most Terrifying Car Insurance Words.”  These typically come up after some type of accident or driving violation, but in some cases it’s just because of your age.  If you cause a car accident, a surcharge will be added to your auto insurance policy for a pre-determined period of time.  The only ways to possibly get out of this added surcharge are appealing a traffic ticket and begging your auto insurer.  But there is a good chance that you’ll just have to wait it out until your surcharge goes away.

Once your state mandates that you carry SR-22 insurance, the only way you will be able to get cheaper car insurance is by having a good driving record going forward and waiting out the time period of three to five years.  An SR-22 form is a certificate of financial responsibility that high-risk drivers have to show the state government after an infraction such as a DUI.  Auto insurance rates will increase because your insurer has to file these forms and because you are considered a risky driver.

If your auto insurance policy is canceled, you can be in a world of trouble.  Not only are you no longer insured by the company with which you have a history, other insurers will be much less likely to offer you coverage because of the previous cancellation.  Nonstandard insurance is reserved for drivers with a bad driving past and is not available from all auto insurance companies.  This comes with a hefty price tag, but carrying nonstandard insurance, waiting out the average time period of three years, and driving safely are the only ways to get off the nonstandard insurance list.

Once a parent has to add a teen driver onto their insurance policy, rates can increase by 50 to 100%.  This is because teens have a history of driving fast, using poor judgement, and lack experience.  Teen drivers are three times as likely to get into a fatal car accident as drivers twenty and older.  There are discounts for good students available and it makes a difference if your teen keeps a clean driving record starting at 16, but rates won’t go down significantly until the age of 25.

Many fees are being tacked on now for things like emergency response at an accident scene, even if you weren’t at fault in the accident.  Look out for added fees on your policy.  Finally, step-downs are used by some auto insurance companies.  If someone is driving your car that isn’t listed on your policy, your insurer might have a provision to lower your coverage to state-minimum levels if they get into an accident.  Most drivers are unaware they have this step-down provision, but it could cost you a lot of money.  Check with your auto insurance company regularly to make sure you know the ins and outs of your policy and to see what discounts you may qualify for.

Check out our update to this blog.  Hint: voters in California voted the same on Prop. 33 as they did on its predecessor Prop. 17.

Two years ago, voters in California turned down a Proposition very similar to this year’s Prop. 33.  Erik Anderson of KQED in California talks about both sides of Prop. 33 in “Prop. 33 Asks Voters to Reconsider How Auto Insurance Discounts Work.”  If Prop. 33 passes, auto insurance companies will be able to offer better discounts to drivers who have consistently carried insurance for 5 years.  That means that around 80% of drivers would be able to receive significant discounts on their auto insurance simply by maintaining insurance coverage without interruption for 5 years.  Some exceptions have been made to separate Prop. 33 from the failed Prop. 17.  Military members, people who have lost their jobs, and children who were living with their parents will not face steeper car insurance rates if they haven’t maintained 5 straight years of insurance coverage.

But California drivers who don’t meet those exceptions will face much higher auto insurance rates if Prop. 33 passes.  Opponents says that 20% of the drivers in California will be financing the discounts for the other 80% of the drivers.  They say that there was a good reason for the law passed 24 years ago prohibiting auto insurers from offering discounts based on insurance coverage history.  They currently have to base pricing on the driver’s driving record, how many miles they drive, and how long they have been driving.  One concerned voter worries that their rates will be high when they voluntarily sold their car and used public transportation within the past 5 years.  Why should they be penalized for not maintaining auto insurance when they didn’t have an auto to insure?

As he was with Prop. 17, Mercury Insurance owner George Joseph is the main proponent of Prop. 33.  He is also offering up much of the funding.  He says that it will increase competition in the auto insurance market, which is good for drivers as well as most insurance companies.  Proponents say that Prop. 33 will reward drivers in California’s auto insurance market who have maintained their insurance.  It also allows drivers to switch companies and get lower car insurance rates because the discount is portable.  It can be difficult to tell whose best interest is at the forefront in political debates and Prop. 33 has made auto insurance political.  California drivers need to do their research and vote this November to make sure that what they would like to see happen with Prop. 33 has the best chance of being the outcome.

If you are driving one of the top ten bad luck cars, you probably wish you would have seen this list before purchasing your vehicle.  Just because your car may be on the Insurance Institute for Highway Safety’s bad luck car list, you don’t have to run out and buy a new car.  But it’s good information to know, especially if your auto insurance company raised your rates after you bought one of these cars.  CNBC’s Daniel Bukszpan gives us the full list in “10 bad luck cars.”  The IIHS determined this list based on personal injury protection (PIP) claims for cars made between 2009-2011.  All of the cars have at least one thing in common; they are small.  Small cars are more likely to sustain claim-worthy damage in an accident, but they also are typically driven in urban areas and by single people who drive them daily because there isn’t another car in the household.

The Chevrolet Aveo wagon has a claims frequency of 22.3 out of 1,000 insured vehicles.  It’s inexpensive and has great fuel economy, but in the case of an accident drivers will not fare as well as those with bigger cars.  Nissan’s Sentra has a claims rating of 23.  Interestingly, when crash test results are given, they are typically taken against other small cars and aren’t quite accurate when compared to what could happen with other vehicles on the road.  The Dodge Avenger is a midsize vehicle, but its 23.7 rating is likely based on its powerful engine.  The way people tend to drive cars with powerful engines leads to higher losses in collisions and a higher frequency of injuries.  The Hyundai Accent and Nissan Versa tied with a claims frequency of 24.6.  They are both very small and the Accent actually has a “poor” rating in side-impact crashes.

Kia’s Rio is now one of the cheapest cars to insure, but the trade-off is a 24.9 claims frequency rating.  The Mitsubishi Galant has a rating of 25.4.  Although it is a midsize sedan, it is close to being a small sedan because it’s at the low end of the midsize size range.  The Chevrolet Aveo has a claims rating of 26, so it is involved in quite a few more accidents than its wagon counterpart in position 10.  The second highest rating goes to the Suzuki SX4.  It’s overall “marginal” ratings from the IIHS are just above the rating of “poor.”  Toyota’s Yaris has the highest claims frequency rating at 28.5 out of 1,000 insured vehicles on the road.  This auto has around twice the average claims for vehicles on the road, mostly based on the fact that it is very small.  Some of these cars do have the cheapest auto insurance rates out there, but after auto insurance companies see these study results that just may change.

I found an article on NASDAQ that gives six good tips to keep in mind when looking for an auto insurance policy.  In “You might have less car insurance than you think,” Barbara Marquard says that some of the coverage you carry probably has exclusions and limits of which you are unaware.  It’s a good idea to keep these six things in mind not only when shopping for auto insurance quotes, but also check with your current auto insurance company, such as American Commerce, and see if any of these limits apply to your policy.  That way you can make changes before it is too late and you have to file a claim.  A consumer analyst recommends reading through your car insurance policy cover to cover.  While you may have more interesting reading materials in mind, this can save you quite a bit of hassle when filing a claim.

Some insurance companies lower your liability coverage to state minimum levels if a driver who isn’t on your policy uses your car.  Many people carry 100/300/50 liability coverage, but state minimums are much less than that coverage.  If someone uses your car and gets into an accident, you might be covered for far less than the 100/300/50 that you are paying for in your premiums.  Underinsured motorist coverage is important when you get into an accident with someone who is at fault and only carries state minimum coverage.  But when it comes time for your underinsured motorist coverage to kick in, car insurance companies deduct anything paid by the underinsured motorist’s coverage from what they owe you.  For example, if your medical bills are $50,000 and you were paid $25,000 by the other driver’s insurance, your insurance company will deduct that $25,000 from the $25,000 they owe you.  Therefore, you wouldn’t get anything for your underinsured motorist coverage!

The majority of states have a law that allows auto insurance companies not to pay your medical bills if you were under the influence of drugs or alcohol at the time of your car accident.  If someone without a driver’s license crashes your car while driving it, some insurance policies will not cover any damage in the case of an accident.  A lot of policies do not include coverage when you are using your vehicle for any kind of business.  This includes pizza delivery, newspaper delivery and all other types of business.  If you are using your vehicle for any kind of business driving, make sure to compare auto insurance policies so that you include coverage while you are working.  There are also some restrictions related to car theft.  If there is no sign of forced entry, maybe because you didn’t lock your doors, many auto insurance companies will not pay out.  Also, if you have added things to your car that are not standard, like a new stereo system, some companies don’t cover those additions.

You may be surprised by some of the exclusions and limits related to your car insurance policy.  Check with your insurer and shop for new policies with these six tips in mind.

Around 1% of those with auto insurance are using usage-based programs to try for discounts on their auto insurance premiums.  But according to NASDAQ’s “The rise of usage-based auto insurance,” that number is rising.  In the next five years, some estimate that as many as 20% of drivers could be using usage-based programs.  They even predict that 30% of drivers will be using them by 2020.  Usage-based insurance, or UBI, allows your auto insurance company to place a device in your car to monitor your driving habits.  They can determine when you drive, how often, how far, how fast you are accelerating, as well as your braking habits.  Companies advertise discounts of up to 30% when you use their UBI, if you are found to have safe driving habits.

When asked, drivers said that they are happy to give up some privacy in exchange for a discount on auto insurance rates.  Between smart phones and Facebook, people are used to giving up some of their privacy, so they willingly participate in UBI services.  In fact, companies who are not currently using this technology, or at least in the development process, are pretty far behind and risk losing some customers.  At some point in the future, drivers may end up paying higher premiums if they don’t allow their insurer to track their driving habits.  It’s unlikely that insurers will force drivers to share UBI information, but collecting this data will likely become the norm in the future.

Here is a summary of some of the companies offering usage-based insurance.  First of all, you do have to have a car that is newer than a 1996 model.  Drive Wise is offered in three states by Allstate, but they plan to expand the program later this year.  American Family Insurance has tested their product and is currently developing a plan to implement it.  Esurance has teamed up with Sprint to collect UBI data, but it is only available now in Texas.  GMAC collects data through OnStar.  The Hartford insurance works with Octo USA to collect data for their TrueLane program, currently available in five states.  Progressive’s Snapshot is available in most states and even non-customers can try it out.  Travelers has started using IntelliDrive in four states.  Safeco offers the Rewind program to some customers who are trying to avoid rising premiums after violations.  State Farm’s Drive Safe & Save program also works with OnStar and is available in 14 states.  Have you taken advantage of UBI yet?

There are many reasons why your needs change during the retirement phase of your life.  Which vehicle you choose to drive is one of the facets of life that may change once you reach your retirement.  This could be for financial reasons, space or comfort.  Fox Business published a Bankrate article by Donna Fuscaldo with some great cars for retirees entitled “Seven Safe and Smooth Cars for Seniors on a Budget.”  You have to put a little more time and energy into your car search, but you can still find a car that is safe, affordable, stylish, and comfortable.

Take any potential health concerns into account when looking for a car in retirement.  If your vision is beginning to show problems, look for large controls, sun visors that extend, and larger side mirrors.  For those with arthritis, four door cars work best as well as those with keyless entry, power seats, and thick steering wheels.  All seven of the cars listed in this article are less than $20,000 to purchase.  You can also get a reasonable auto insurance quote, another way to help retirees with an often limited monthly budget when they stop working full time.

The Jeep Patriot 4 x 4 has top safety features and an electronic information center that makes it easy to monitor gas levels and other statistics.  Subaru’s Impreza 2.0i Premium has been voted the best compact car as well as the all-wheel-drive car with the best fuel economy in the United States.  The Ford Focus S has top safety features and an optional parking assist system that parks the car for you with the press of a button.  Chrysler’s 200LX is larger than the compact cars and offers comfort and a quiet ride.  Another Ford, the Fusion, is the most expensive on the list, but offers the title of the most dependable midsize car.  High safety and high technology abound with the Kia Sportage, which also offers a ton of optional additions.  Finally, the Hyundai Elantra GT has a lot of cargo space for retirement hobbies, as well as standard satellite radio.  As auto and insurance needs change in retirement, shopping around is the best way to make sure you find the right products for your needs and price.

Many of the reasons for auto insurance rate increases over the past decade are beyond our control.  According to Moneywise’s “Why are your car insurance premiums rising?,” auto insurance rates have doubled in past decade.  There is a lot of talk about the rising gas prices eating into household incomes.  Not as much talk is made about rising auto insurance prices, but that may be because a lot of people just continue to pay their bill monthly without even keeping close track of price increases.

The cost of auto insurance went up 15% last year in the UK, and increased 110% over the past ten years.  This article states that the top reason for auto insurance rate increases is a dramatic increase in personal injury claims.  In the past, the majority of car insurance claims were paid out for repairs.  But half of claims are now paid out for injuries and medical issues related to car accidents.  Between 2010 and 2011, there was an 18% increase in medical claims like whiplash.  That is the largest increase they have ever seen in the UK.  Research has shown a link between the number of no win, no fee lawyers specializing in car accident claims and the amount of claims filed in a certain location.  There could be new legislation soon regarding the way that some claims lawyers do business.

Another reason for increasing auto insurance rates is an increasing cost to repair vehicles.  New technology is great for car owners, but it really increases the cost to fix the vehicles when there is damage.  One example is that of a broken headlight that used to need a new light bulb and maybe some glass if that cover were broken as well.  Now an entire sealed panel may have to be replaced just because of a broken headlight cover.

Some organizations believe that auto insurance companies are to blame for rising premiums because competition with other insurers is causing them to get more expensive repairs and rental cars when their insured was not at fault in an accident.  Rates have been going down this year slightly because of heavy competition in the auto insurance market.  It’s difficult when things beyond your control are setting your auto insurance rates, but the best you can do is keep the factors that are under your control in your favor to get lower auto insurance rates.