Smart Auto Insurance Blog

According to the Baltimore Sun’s Liz Kay, 67 Maryland auto insurance companies have been fined by the state’s Insurance Administration. The insurers were found to have under compensated drivers whose cars have been deemed a total loss, by failing to take into account increases in state sales tax and Motor Vehicle Administration fees when calculating a car’s value.

Liz reports that the over 4,000 drivers affected have already received refunds, averaging about $100 each (total restitution being $442,000). The companies (listed here) were also charged a $235,000 fine. Always make sure to make sure exactly what level of auto insurance claim your policy covers, so you aren’t greeted with an unpleasant surprise.

Scott Bauer from the Associated Press has reported on the impact Governor Jim Doyle’s new budget could have on Wisconsin auto insurance. The Wisconsin Insurance Alliance is against the provision that would require an increase in the lowest level of coverage available to buy:

• $300,000 in total coverage (formerly $50,000)
• $100,000 in coverage per person (formerly $25,000)
• $25,000 in property damage coverage (formerly $10,000)

The Insurance Journal recently published an article highlighting trouble in paradise: Hawaii auto insurance fraud is growing rapidly! According to the Department of Commerce and Consumer Affairs (DCCA), convictions by its Insurance Fraud Investigation Unit increased by a whopping 61% in 2008, following a similar increase in 2007.

Fraud results in higher auto insurance rates for all. Estimates from the DCCA claim that motor vehicle insurance fraud results in up to $300 worth of increased premiums per person per year.

(Photo credit: Scott Hudson under CC 2.0)

Eyewitness 4 News in New Mexico recently highlighted a new trend in auto insurance claims: after an accident, more people are choosing to keep the money from their claim as opposed to using it for repairs. I can see their point; in this struggling economy, it may seem like a better idea to pocket that insurance payout and use it for family needs (like food), instead of non-essential car repairs. As a result, body shops are reporting a 25% drop in repairs across the United States.

However, body shop employee Tommy Hufnagel claims that insurance companies will often underpay consumers when sending them a direct check. If you think you’ll need any repairs at some point (even if your automobile still works right now), it might be a better idea to get a body shop estimate first.