Smart Auto Insurance Blog

Auto insurance is getting more and more competitive and price is not the only place to compete.  Customer service, reputation, coverage options, SR22 insurance, and extra perks are all something to consider when shopping for auto insurance quotes.  One perk that has received a lot of attention in the past year is accident forgiveness.  This is a sought after benefit as consumers want flexibility in case they happen to have an accident.  The automatic rate increase that has been associated with accidents scares consumers and this makes accident forgiveness very desirable.

More and more auto insurers are making accident forgiveness part of their policy packages.  Nationwide and Allstate have been advertising this perk for awhile and have found great success with the program.  According to the article “Car Accident Forgiveness Policies” found on US Life Daily’s site says accident forgiveness is one of the more highly searched for benefits which indicates it’s a growing need.  The idea that auto insurance rates will not be automatically raised after the first accident appeals to all demographics and ages so it really is a unique benefit.

Accident forgiveness a relatively new concept, but it makes sense.  Auto insurance companies still want to reward good drivers with superior rates, but they recognize even the best drivers can have an accident and they know customers do not want to automatically be penalized if an accident occurs, especially if they have had a perfect driving record for years.  If this is a perk you think would bring you value, check with your insurer to see if that option is available.  If not, it may be time to start to compare auto insurance quotes online.

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.

Auto insurance companies have been using gender as a pricing mechanism for many years when determining auto insurance quotes.  Women typically get lower auto insurance quotes because they are less likely to be in an accident, but despite this fact, many view this type of risk-based pricing as discrimination.

Things are looking to change in Europe when it comes to using gender in pricing.  According to the article “EU Court Bans Gender Basis for Insurance Cost” on DW-World by Andrew Bowen, the European Union’s highest court banned using gender as a factor when determining price.  The European Court of Justice ordered insurance companies to adopt a way of calculating rates without useing gender by December 21st of 2012.

This could have a negative effect on consumers over time.  EU law already banned using gender but the insurance industry had an exemption as long as the insurers regularly published statistical information on which their rates were based.  CEA, Europe’s insurance industry lobby, is against the decision and say the impact on price, benefits and consumer options could be huge.  Is this a trend that will make its way to the United States?  Only time will tell, but if it does it’s fair to say it will have a big impact on the way auto insurance rates are calculated and many will end up paying more for their policy.

For many years, auto insurance companies have been using a consumer’s credit score to help determine risk and calculate auto insurance quotes.  It has been debated by industry experts and consumer advocates whether or not this is fair and whether or not it makes sense.  Most auto insurance companies agree that this is an accurate way to determine risk, and study after study shows that riskier drivers tend to have lower credit ratings.

The National Association of Insurance Commissioners has been probing insurers continuously about their credit score use and the auto insurers are defending themselves.  This is according to the article “Auto Insurance Companies Defend Use of Credit Scores” found on Insurance NewsNet.com.  With a struggling economy, the issue is even more hot.  People with once excellent credit scores are finding themselves out of work and paying late on bills which is affecting their credit.  Double whammy once they receive an auto insurance quote and see their rates have increased due to the drop in their credit score.

The use of credit scores is supported by most states, which use a model from the National Conference of Insurance Legislators.  Louisiana commissioner of insurance, Jim Donelon, says he doesn’t see anything wrong with the practice and he attended a public hearing with the NAIC’s Property and Casualty Insurance Committee where auto insurance companies defended their use of credit scores when determining auto insurance rates for customers.

If you were to ask anyone in New York City if they pay a lot for auto insurance they most likely would tell you they do.  It makes sense since it’s the largest city in the US with common congested traffic and risky cab drivers.  But surprisingly, New York does not even show up on the top 20 states with high auto insurance rates.  According to the article “The States With the Highest & Lowest Auto Insurance Rates” by James Zol on TheAutoInsurance.com, Louisiana takes the top spot as the state with the highest auto insurance rates.

Based on a study completed by Insure.com, Louisiana has the highest auto insurance rates primarily due to their law structure.  According to MSN News, Louisiana allows for some of the highest out of court settlements in the US.  Because of this auto insurance companies charge Louisiana residents more to make up for this potential expense.

Maine takes the number one spot for the state with the lowest auto insurance rates.  This is mostly due to the low population which translates to less accidents and fewer lawsuits.  Many Maine residents tend to resolve auto accident situations without even contacting the insurance companies.  This translates to lower rates across the board in Maine.  This is something other states may want to consider before filing frivolous claims.  You may make some money in the short run, but in the long run everyone pays through higher auto insurance quotes.

Surprisingly, over half of respondents to a recent survey from LexisNexis Risk Solutions, believe that auto insurance rates should be driven by actual driving data obtained through ob-board devices monitoring how someone drives.  According to the article “Survey Shows Mixed Views of Data-Driven Auto Insurance Rates” by Ben Zitney on onlineautoinsurance.com, privacy concerns are holding back consumers from accepting auto insurance companies’ desire to collect information directly from the vehicle to set rates.

The monitoring device placed in the car can detect a variety of information such as speed, mileage, and braking data.  Most auto insurance companies already use personal information like ticket history and credit history when determining rates, but this might take the privacy issue over the edge.  The use of these devices is getting more and more common and could eventually be the norm.

GMAC has been collecting data from OnStar devices for some time now and having great success with their information gathered.  Since 2008 Progressive has been offering discounts to policyholders who agree to have the devices placed in their car for monitoring.  They measure information such as speed, braking, times of day driven, and distance traveled.  Allstate announced that they have launched a similar program called Drive Wise to use data when calculating auto insurance policies.  Compare auto insurance options to see if this might be something that could save you money in the long run.  If you’re a good driver but haven’t proven through your driving record, this could be a plan for you.

There are a few coverages included in most auto insurance policies across the nation that would surprise the average person.  According to the article “4 Things You Didn’t Know Your General Auto Insurance Covers” on TheAutoInsurance.com, you should always check with your insurer to ensure you have basic coverages, but there’s a good chance they offer the following great benefits:

1. Legal expenses are offered covered including a lawyer
2. Your car is probably covered in the case of a terrorist attack
3. Damage caused when someone else drives your car
4. Roadside Assistance

Again, it is possible that your coverage does not offer these 4 benefits, but if they don’t it may be time to shop around for better auto insurance rates with more benefits.  Many discount auto insurance companies are known for having lack luster benefits, so it’s worth getting a run down of the benefits your policy offers.  Do a side by side comparison of various policies to get a good understanding of what you may be missing.  Most auto insurance agents will happily sit down with you to explain the difference in policies to ensure you find a policy that best suits your needs.  If they don’t, then they might not be the insurer for you.

Founders auto insurance is continuing to offer great auto insurance deals to their customers.  This is important to understand as the economy is at a standstill and everyone is looking for ways to save money.  The auto insurance business is very competitive, but Founders is offering up some tips to consumers to ensure they are getting great deals on coverage.

Many auto insurance companies will offer discounts for switching policies to their company.  In many cases you can use a competitors offer as leverage for a good deal with an insurer.

Consider location.  You do not have to use a local auto insurance company, and many times you will find better deals with widespread companies since they have more to offer and a variety of options.  It’s true that where you live impacts auto insurance rates to consider this as you shop around.

Believe it or not, new cars are often cheaper to insure.  If you are considering buying a new car take this into consideration as you shop around.  Many people think rates will increase with the new car, but this isn’t usually the case.  One stop shopping is almost always beneficial.  If you have multiple insurance products with one company you may see huge discounts which will ultimately save you a lot of money.

Last month a presentation given last month by industry expert, Steven Weisbart, shows that the price of auto insurance has been rising steadily over the past three years.  The article “Report: Car Insurance Price Trends Are Out of Sync With Economy” by Ben Zitney on OnlineAutoInsurance.com discusses the various trends of auto insurance quotes over time.

Steven Weisbart is the Insurance Information Institute’s Senior Vice President and chief economist and he believes the auto insurance market hardened at the end of 2007 after a 4 year period of dropping auto insurance rates.  The national average expenditure on coverage has risen steadily over the past three years.  The report shows an overall increase of about 12% from 2007 to 2010 causing concern for many struggling Americans.

Weisbart’s presentation is entitled “Mega-Trends Influencing the Future of Auto Insurance” was was addressed in October at the National Auto Insurance ExecuSummit held in Connecticut.  It highlighted many emerging trends in the auto insurance industry and helped explain some of the upsetting increases in auto insurance rates that are caused partially by the economy’s various downward trends.