November 12th, 2012
If your car was water damaged from Hurricane Sandy, The Property Casualty Insurers Association of America has issued some tips for you. Insurance News Net’s “P/C Insurers Association Offers Tips On Flooded Vehicles” answers questions about what consumers should do if their car was damaged. The article also issues warnings to consumers looking to buy a new car so that they don’t buy a cheap vehicle that has water damage from Hurricane Sandy. Your comprehensive insurance coverage should include damage to your car from being flooded by hurricane waters. If your car has been flooded, it’s probably best not to start the vehicle before having it checked out by a reputable technician.
Once cars are flooded, they will likely have to be sent to a salvage auction and labeled as flood damaged. These vehicles will be salvaged for parts and consumers will be reimbursed by their car insurance companies. Some vehicles are properly restored after getting flood damage, but they should be labeled as such so that consumers know what they are getting into. The National Motor Vehicle Title Information System mandates a federal data base where car insurance companies have to report total loss vehicles. Those vehicles damaged by flood are supposed to have their titles branded, but some state laws allow for inconsistencies in reporting.
If your car has been damaged by flood waters, try to assess the extent of the damage before starting the vehicle. Check the air filter to see if it is wet. If the floor boards or seats are wet, there is likely damage to the electrical system and you should see if it can be fixed before trying to start it. File a claim with your insurance company and try to keep the car safe from any more damage while you are waiting. If you are worried about purchasing a flood damaged vehicle, check the car fax or other sites like vehicle history or the NICB. Look the car over for any signs of water damage or recent repair of things likely to be damaged in a flood. Take the car to a mechanic to be looked over if you aren’t confident in the dealer or vehicle. Thousands of people have lost their cars to damage from Hurricane Sandy. Your first step should be contacting your insurance company for help. If your coverage will not help you, you might qualify for a FEMA loan to help purchase a new vehicle.
November 5th, 2012
Voting day is just about upon us (finally!) and the car insurance debate is still going on in California. Tomorrow is the time to make your voice heard, not only in the Presidential contest, but on some local levels as well. “California’s Prop. 33 could change car insurance rates,” according to Michael Finney of ABC7 News in San Francisco. In 1988, California residents passed Prop. 103, which says that your car insurance rates should be based on the number of miles you drive, how long you have been driving, and your driving safety record. This regulation specifically excluded basing rates on the history of your car insurance. If you stay with a certain insurance company like Dairyland, they can offer you a discount for remaining a long term customer. But in California, if you move to another insurer, you cannot receive a discounted quote simply because you have carried car insurance for a long time.
Two men who have been hotly debating this issue for years are Prop. 103′s writer Harvey Rosenfeld and Mercury Insurance founder George Joseph. Joseph has put a lot of money in the fight to get Prop. 33 passed by voters. He obviously has a lot to gain if customers leave other insurance companies to come to Mercury auto insurance for a discount based on a long history of maintaining car insurance. But he also argues that this is really in the best interest of many consumers because they can get cheaper car insurance based on this reward of maintaining car insurance coverage. Opponents of Prop. 33 say that not having car insurance doesn’t necessarily mean you are delinquent and should be punished with higher rates. Some people choose not to drive for a certain period of time, whether they are living in another country or get rid of their car to use public transportation.
There are a few exceptions to Prop. 33. If you are in the military, have gone fewer than 30 days without car insurance, or have been out of work for 18 months, you won’t be penalized and unable to receive the continuous coverage discount. But is it fair to give a surcharge to people because it is their first time getting car insurance or because they decided not to drive a car for a period of time? That is certainly up for debate and your only voice now is heading to vote on the issue tomorrow. Many people say that this surcharge does in essence exist anyways if you are a new or non-continuous driver, so Prop. 33 isn’t adding a surcharge to insurance quotes. Let it be clear that Prop. 33 doesn’t automatically allow you to get a discount for maintaining car insurance; it gives car insurance companies the option of offering you such a discount.
October 30th, 2012
Did you wake up today to find a tree on your car? Or was your car submerged in water? Hurricane Sandy wreaked havoc on the Eastern United States from as far north as Maine to as far west as Ohio. Millions of people are still without power and many more have severe damage to their homes, businesses, and cars. Sadly, dozens of people even lost their lives in this terrible storm yesterday. In the Associated Press article, “Sandy leaves death, damp and darkness in wake,” Allen G. Breed and Tom Hays reported 33 killed as of this afternoon. They say that most of them were killed by falling trees.
New Jersey’s governor said that the Jersey Shore has been devastated and they aren’t even close to knowing all of the damage their state has sustained yet. Manhattan has been quiet for two days as subways and trains were halted from the storm. A spokesman for the subway system said that this is the worst they have ever been effected by weather. Today is the second day that the New York Stock Exchange has been closed, something that hasn’t happened because of weather issues since the 1800′s. Airports as far west as Cleveland have been closed for more than a day and passengers are stranded all over the country waiting to get to their destinations.
Insurance companies in New York and elsewhere are working overtime to help their clients who have lost their homes and cars to storm damage. More than 100 houses burned down in Queens, NY after a huge fire erupted. One jail employee near Manhattan found his Honda filled with water when he left his overnight shift at work. The windows automatically go down when the car is underwater in case anyone is trapped inside. That is a great new safety feature, although his car is now a complete loss. One Brooklyn, NY resident said that cars were thrown around like leaves in her neighborhood this morning. Between the airport closings, New York’s transit system, and the damage across the east coast, recovering from Sandy is going to take a long time.
October 20th, 2012
The insurance industry is dealing with a lot of fraud right now and is working on ways to eliminate as much of this fraud as they can. Insurance News Net posted a press release, “Insurers: More Fraud than Previously Estimated,” by analytics company FICO. They worked with the Property Casualty Insurers Association of America (PCIAA) to determine the high cost of fraud in the insurance industry. Insurance policies that protect individuals and families are also known as personal insurance lines. Fifty-four percent of insurance companies expect fraud to increase this year for these personal insurance lines. Close to half of insurers say that fraud makes up around 5-10% of all of their claims, but for 32% of insurers, fraud accounts for one-fifth of their insurance claims.
This creates big problems for consumers looking to get cheaper car insurance and homeowners or renters insurance. Fraud makes insurance premiums for everyone increase because insurance companies have to account for those increasing losses. Insurers are seeing increasing problems with fraud related to new applications, so they are working on ways to improve the application process so this fraud doesn’t cause other increases in their premiums.
Insurance companies believe that the most significant increases in fraud are going to occur with workers compensation, auto insurance, and property insurance. Sixty percent of insurers expect to see increases in auto insurance fraud. There are many possible reasons for people filing fraudulent claims with insurance companies, but most insurers think that tough economic conditions are to blame for much of the insurance fraud. Another reason cited is criminal gangs’ increasing sophistication, especially in large states that have no-fault insurance mandates. This no-fault insurance causes high increases in medical payments, especially fraudulent ones.
With $40 billion of insurance fraud estimated globally, cutting down on this fraud is crucial for insurance companies and consumers alike. Essentially, honest consumers are paying a “fraud tax” in the form of increased premiums for car insurance and other types of insurance. The PCIAA says that insurers are working hard to reduce fraud and the costs related to it. They urge both consumers and the government to realize this huge problem and also work to find a way to decrease fraud.
October 14th, 2012
Until reading this Fox Business article by Barbara Marquand, I had never before thought about how being a caregiver could effect car insurance rates. In the “Caregiver’s Guide to Car Insurance,” some interesting points are raised that you should consider if you are helping to care for someone and drive them around. In most cases, your car insurance policy will cover you as the driver, along with anyone living in your household and listed as a driver. Many policies also cover anyone that you allow to drive your car once in awhile. Although you may assume that your car is covered with anyone you let drive it, that is not always the case.
There are four different cases given in the article that may be exceptions to the normal car insurance rules. Say, for instance, that an elderly family member needs you to drive them to doctor’s appointments. They may have given up driving themselves, but keep a car and maintain the car insurance policy for when they need rides from others. Some insurance companies will allow drivers, especially those in good standing who have a history with the car insurance company, to keep a policy in their name when they are not a named driver for the policy. The insurer will need your information to determine pricing for the policy in your elderly relative’s name.
If you move in with a friend or family member who is sick or injured to help drive them around, whether the car insurance policy needs to be changed depends upon the length of time you are there. For a short time of less than a couple weeks, the person’s basic policy should cover you as an allowable driver. But if you are there longer than a month, your friend or family member should let their car insurer know so that they can add you to their policy. Temporary addition to an insurance policy is important to protect everyone involved in the case of a car accident.
There are a few other less common scenarios where you should think about car insurance coverage. Some kind neighbors take their elderly neighbors on errands around the neighborhood. Whether or not you are paid for this is important because if you are, you might have to tell your car insurance company that you are using your vehicle for business purposes. Sometimes insurance quotes from a company like State Farm will be higher with business use of a vehicle. If you have a weekly or monthly commitment to drive someone to a poker game, or something like that, you will probably be covered under their policy. But with less expensive policies, it’s possible that only listed drivers will be covered. Other insurers don’t allow permissible drivers younger than 25 to be covered, while some policies lower coverage amounts in the case of a permissible driver getting in an accident. If anyone else drives your vehicle, or if you drive theirs, make sure that you are covered in the case of an accident or injury.
October 2nd, 2012
Good news for teens, parents, the general public, and car insurance companies. Thanks in part to a plethora of programs and organizations working to inform teens of the dangers of drinking and driving, the rate of teen drinking and driving has been cut in half. In the Reuters’ article “Teen drinking and driving rate cut in half in 20 years,” David Beasley says that more difficult laws against driving under the influence of alcohol has also been a big help in lowering the rate of teens drinking and driving. The Centers for Disease Control and Prevention found that 10.3% of teenagers admitted to drinking and driving in the past month in 2011. Ideally that number would be zero, but in 1991 was as high as 22.3% of teens having driven after drinking alcohol in the month before being surveyed.
Each year, more than 800 people are killed because of teens drinking and driving. Despite the significant 54% drop in teens drinking and driving, there were still one million teens who drove their cars after drinking alcohol last year. This is terrible for other drivers and passengers on the road obviously; drunk drivers are putting everyone’s life at risk. Teens driving drunk is also a big concern for car insurance companies. Drunk driving accidents mean big bills for accidents and medical bills. North Dakota teen car insurance rates could be much higher than those in Utah because the difference in teen drunk driving is significant. The rate in North Dakota was 14.5%, while the rate of teen drinking and driving in Utah was 4.6%. The most likely teens to drink and drive are males who are 18 and 19 years old. Females aged 16 are the least likely to drink and drive.
Teens are actually driving less often than they were two decades ago, which is another reason for the decrease in drinking and driving among them. Twenty-two percent of high school seniors did not even drive at all during an average week, up from 15% a decade before. This is likely due to a slower economy and higher gas prices. There are fewer family cars, fewer teens have their own cars, and there is less money to spend on gasoline for unnecessary driving. The article points out that it is crucial for parents to set a good example for their teens. Teens often mirror their parents drinking and driving behavior, so setting a good example even when your kids are young sets the stage for their future. Lets hope this trend continues and fewer teens drink and drive every year. This would be a good thing for car insurance companies, parents, teens, and the general public.
September 27th, 2012
Is there ever a point in one’s driving history where they can’t get car insurance because of too many violations? Based on Lindsay Lohan’s history, the answer is no. Some experts guess that she may be paying hundreds of thousands of dollars each year for her car insurance premiums though. I’d say that is fair, given her history. Lohan’s latest driving shenanigans happened just last week in New York City. According to Hollie McKay of Fox News in her article “Expert: Lindsay Lohan could be paying six figures for car insurance,” the actress was arrested last week after being accused of hitting a chef in the alley between two hotels. After inspecting the damage to her Porsche Cayenne, she and her friend left the scene while the injured chef headed to the hospital.
Lindsay’s representative seemed to blow off the incident, but police arrested her after she left the hotel, based on the accusations. This is the latest in a long line of vehicle mishaps from Lohan dating back to two DUI’s within three months five years ago. This June, she crashed into a dump truck and totaled her car. Although she claims that she wasn’t driving, police are suspicious and are still investigating. In March, she hit a club manager and in July, she ran a red light and hit a stroller. There have been many more incidents with Lindsay Lohan’s driving, many of which she denies. I guess it is possible that she is accused of some of these things because of her fame and reputation, but it’s unlikely she is always in the wrong place at the wrong time.
So just what car insurance company is going to insure Lindsay Lohan’s vehicles? Probably any of them if she is paying hundreds of thousands of dollars each year. Some insurance companies might even force her to purchase a bond in California, much like many of her movie producers have to do to hire her. She definitely needs to carry comprehensive insurance coverage in addition to her collision coverage and coverage for medical payments. Her high-risk driving status makes the cost of these car insurance premiums sky high. It’s always possible that she isn’t even paying car insurance premiums at all though . Celebrities tend to get a lot for free, and if she is driving a car on loan from a dealership or someone else, they would be responsible for the car insurance coverage. I surely wouldn’t be loaning Lindsay Lohan my car, but she wouldn’t really want it anyways.
September 18th, 2012
Google hopes that drivers in the United Kingdom will start using their car insurance comparison tools to compare car insurance premiums. Other insurance comparison websites may be a little wary of Google’s entrance into the car insurance market, but they are new and likely have some things to learn. Lucky for them, a lot of people use their search engine to look for car insurance and they can control where their own comparison tool shows up in the search results. Is that fair? That probably doesn’t really matter in the long run. This information about Google comes from the Credit Union Times’ article “Google Enters Car Insurance Market in United Kingdom,” by Michelle Samaad.
Quotes will be available from more than 120 different car insurance companies through Google’s system. Google says that they plan to offer car insurance information that is both fair and honest, something that we also strive for at CarInsuranceSort.com. They have already been working to get more into financial services, so this is just another way for Google to carry out that plan. A London marketing expert says that Google may have a bit of a mountain to climb not only with consumers, but also with car insurance companies. They may have to do some work to convince insurers that they should promote their services through Google car insurance. If Google is successful with their car insurance tool in the United Kingdom, it will likely be introduced in other parts of the world as well.
September 12th, 2012
Drivers in Illinois have been hit hard by rising car insurance rates, from nearly every insurance provider in the state. According to “Farmers Group raises car insurance rates 15%,” Steve Daniels of Crain’s Chicago says that Farmers Group is just the latest to increase car insurance rates in Illinois. Theirs is one of the largest price increases recently, averaging 15% around the state. Farmers says that they are forced to raise car insurance premiums because they have seen steep increases in accidents and severity payments for medical costs and car repairs. Right now, Farmers is the sixth largest car insurance company in Illinois, capturing 4% of the market there. They do point out that they are offering better discounts to both long term customers and those who get their car and homeowners insurance through Farmers.
This summer, Progressive Insurance raised their car insurance rates in Illinois by an average of 11%. Increasing claims was their reason for increasing rates in Illinois, as well as most other states. While Progressive uses the internet and independent agents to sell car insurance, Farmers and the other large insurers in Illinois sell through networks of captive agents. Car insurance quotes from State Farm, the largest insurer in Illinois, went down 2% in December after a few years of small increases. The second largest insurer, Allstate, offered a hometown discount of 5% two years ago. But overall, they have been increasing rates for the past five years, with a 3-5% increase earlier in 2012. Geico, the third largest car insurance company in Illinois, increased their car insurance rates by 2.5% in May. It looks like drivers in Illinois will have to work even harder to find affordable car insurance in their state.
September 9th, 2012
We talk a lot about the best ways to save money on car insurance and where you can make cuts in your coverage. But Jay MacDonald’s Bankrate article published by Fox Business, “Car Insurance: When Not to Skimp,” lets us know what coverage you should not go without. He spoke with experts in the auto insurance industry and made an insurance guide to rank the different types of coverage by their importance. A ranking of red is for coverage that you should never skip, an orange ranking is important, and a yellow ranking is something you could consider skipping. But you really need to make sure that dropping any type of coverage is worth the added risk for lowering your car insurance premiums from a company like Bristol West car insurance.
One expert makes the point that you should consider what you are protecting, your specific needs, and your personal risk tolerance rather than only how much the coverage costs. Liability insurance was labeled red by all three experts. This coverage protects you and anyone driving your car for property damage as well as bodily injury. It also covers court costs and lawsuits related to car accidents, something that could ruin you financially without this coverage. Comprehensive coverage is listed in the yellow zone. This covers damage to your vehicle that is not due to any type of collision. Whether or not you opt for comprehensive coverage should be based on your financial situation, where you live, and especially your car type and age. Roadside assistance isn’t necessarily on the list of top importance, but can really be convenient, especially with an older car. It is listed as light yellow for order of importance, but you could be grateful to have it if you need an unexpected tow.
Collision coverage is almost always required when you lease your car, but is listed in the yellow zone for those who purchase their cars. People with older cars sometimes drop collision coverage to lower their car insurance premiums. It can be a way to save money if you drive an older car that likely won’t get repaired in the case of an accident. Those with newer cars should probably carry collision coverage though in order to get their vehicle repaired after an accident. Coverage for medical payments was listed in the orange zone. If you don’t have health insurance or you carpool often, you should really get this type of coverage. Uninsured or underinsured motorist coverage is crucial and is listed in the red zone. Up to 30% of drivers on the road may not have insurance, so this coverage is crucial to pay for injuries related to car accidents. Regardless of how much coverage you decide to purchase, you should shop around for the best premiums for your desired coverage level.