Smart Auto Insurance Blog

There is some good news for those shopping for auto insurance quotes.  Rates are down about .5% according to the article “Average Price for Auto Insurance Down .5%” found on theautoinsurance.com.  Over the past six months InsWeb has shown that auto insurance premiums are down to about a national average of $702.

These savings are an average across the board, but certain demographics are experiencing even higher savings.  Women drivers over the past six months have saved 5% over what men drivers are paying.  Women paid on average $683/year while men paid $720/year.  This savings is typical since auto insurance companies view women as less risky drivers.

Over the next few years, drivers can expect to see some changes to the way auto insurance is offered.  Many states are currently considering, or have implemented pay-as-you-drive options which allow drivers to pay for auto insurance based on miles driven.  This can be a huge money saver for many who do not drive very much or drive a lot based on the season.  Consumers will still have the option to purchase standard auto insurance, but this new idea will provide flexibility and affordability to certain types of drivers.

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.

According to the article “Auto Premiums In Ohio Decline for Third Consecutive Year” found on insurancejournal.com, Ohio has the 11th lowest auto insurance rates in the US in 2007.  This is an improvement from its ranking the year before at 13th.  This is great news for Ohio drivers as they shop for Ohio auto insurance quotes.

The Ohio Department of Insurance recently reported that rates in the state have been on the decline for the past 3 years based on the 2006/2007 Auto Insurance Database information.  This was released by the National Association of Insurance Commissioners.  The Ohio Department of Insurance Director, Mary Jo Hudson, believes that Ohio has a healthy and competitive auto insurance market which drives costs down and benefits consumers.

Analysts from the Department of Insurance expect auto insurance rates to slightly increase in 2010 across the country according to the article.  Changes in the costs of auto insurance are due to higher repair costs, soaring medical expense costs, claims related to weather, and the number of drivers who are out on Ohio roads.

According to the article “Premiums in Ohio are Very Low” by Dan Kelso on toledoblade.com, Ohio has some of the lowest insurance rates in the US. 

On average, homeowners insurance is tied for the 5th lowest at $530, compared to the US average of $804.  Ohio’s auto insurance is 13th lowest, which is well below the average.  This is great news for those shopping around for Ohio auto insurance quotes.  The Ohio Department of Insurance regulates insurance rates, so it’s important to keep that in mind as other industries may try to cause concern among consumers. 

Much of the US is envious of Ohio’s affordable insurance premiums.  They are very competitive which helps to keep costs down.  The use of insurance scores has caused concern for some, but they are very misunderstood.  With the use of insurance scores most people pay lower insurance premiums overall.  Insurance companies need to use some method of determining which type of customer is more likely to file an insurance claim.  This helps to keep insurance premiums costs down in general.

Auto insurance rates are expected to rise up to 19% for Ontario drivers.  The average Toronto area driver may see rates increase by up to 14% according to the article “Auto insurance rates to rise as much as 19% in Ontario” on GlobalToronto.com. 

Ten auto insurance companies, which serve more than a fourth of Ontario drivers, have been approved to raise their auto insurance rates once again.  One of the reasons for the increased rates is the cost pressures being placed on insurers. 

It’s important to keep prices in perspective though because auto insurance rates are still relatively low when compared to previous years.  When compared to the cost of living, rates are reasonable.  Finance Minister Dwight Duncan plans to announce changes to auto insurance rates during the government’s 5 year review.

California has a low-cost auto insurance program which offers lower auto insurance rates, according to the article “Requiring Auto Insurance Requires That It’s Also Affordable” by Peter Luke on mlive.com.  The program covers basic auto insurance for less than $400 a year.  Drivers must be 19 and have a relatively clean driving record.  There is also an income requirement of less than $27,000 for a single person or $55,000 for a family of 4. 

The article points out that one of the main arguments over the health care debate is that if there is going to be a mandate on health insurance then premiums must be made affordable.  The same concept should be applied to auto insurance since it is required in most states.  The policies need to be readily available for everyone, fairly administered and with reasonable auto insurance rates. 

There is also much debate over how auto insurance companies determine their rates, especially in Michigan where previous posts discuss how they are debating the use of the credit score.  Many believe not only should credit score be excluded from auto insurance companies’ formulas, but also income, gender, zip code, marital status, and bankruptcy.  Some states are considering excluding employment status, which is important for today’s high unemployment rate.

According to the article “Data Shows Auto Insurance Rates Rise for DWI Convinctions” by Lavonne Kuykendall on CNN Money’s site, auto insurance rates in general are on the rise. 

Information obtained by insurance.com shows that auto insurance rates for male drivers with a DWI or DUI convinction are rising faster.  DWI rates usually stay in effect for 5 years after a DWI conviction.

In 2009, male drivers who had a DWI conviction paid auto insurance which was about 24% more per year than did men without any violations.  This is up from a 22% difference in 2008.  The rate of increase for someone with a DWI has remained the same for women since 2008, at about 28% higher than the rate for women without any violations.

California auto insurance policy holders are in for some good news as California implements a $34 million statewide rate reduction announced by California Insurance Commissioner Steve Poizner on Wednesday.  This is according to the article “21st Century to cut premiums for California drivers an average of $50″ by Marc Lifsher on LATimes.com. 

21st Century Insurance, which was recently acquired by Farmers Insurance Group, insures over a million California cars.  This is about 5% of the private passenger car insurance market, so this is a big deal that they will be experiencing an average of $50 in cut costs on their auto insurance rates. 

A Farmers Insurance Group spokesperson stated that they were able to drop rates because of less accidents and less severe accidents being claimed over the past years.  Annual dollars saved will average $80 in Los Angeles county, $62 in Sacramento county and $58 in San Francisco.  This is great news as California residents are trying to save money in this challenging economy.

It’s always important to understand what type of auto insurancecoverage you carry, but now more than ever we need to pay close attention.  This is according to the article “Car Insurance in the New Economy” by Ed Normund on Injuryboard.com.  The recession is causing more and more drivers to cut back on their coverage or eliminate auto insurance altogether and this may cost you in the long run.

The article recommends certain types of coverage that can help protect you during these tough times: 

1. Bodily Injury Liability - pays for injuries that you cause to another based on negligence
2. Property Damage Liability - pays for property damages that you cause due to negligence
3. Umbrella Insurance - covers you for bodily or property damages from auto accidents
4. Uninsured Motorist Protection - covers injuries to you and others when hurt by someone else
5. Comprehensive coverage - covers your car for damage caused by theft or other events
6. Collision insurance - covers you for damage to your car when in a crash with someone else
7. Medical Payments or Personal Injury Protection Insurance - covers you and your car occupants for limited medical payments with no regard to who is at fault

Take the time to understand what is included in your auto insurance policy to ensure you are fully protected.  What type of coverage you have does factor into your rates, so consider closely what you do and do not need to ensure you have adequate and affordable auto insurance.  It’s often better to be safe than sorry in the case of a car accident.

Joe Ducey from abc15.com wrote the article “Why falling credit may cost you higher insurance premiums” which has some great information about watching your credit so your auto insurance rates are not affected.  He contacted the American Insurance Association for some more information on how and why your credit rating affects your premium.

Basically, your credit rating determines predictive behavior and research shows it does impact how many claims you file and how much they will cost.  It’s called “risky behavior”.  There are other seemingly unusual factors that go into determining your auto insurance rate such as if you are smoker, if you drive during rush hour, if you are good student and how many miles you drive.  The criteria varies between auto insurance companies, so it can be beneficial to shop around. 

This is yet another reason to keep a close eye on your credit report and check it regularly.  Not only does it affect your auto insurance rates, but it affects your mortgage rates, car loan rates and other insurance rates!