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Auto Insurance News

2012-10-06T13:48:00.003-07:00

Report: Initial quality stellar among vehicle brands

J.D. Power and Associates says initial quality rankings have improved and are more widespread. Read More >>

NICB lists top cities for vehicle thefts

California is home to seven of the 10 cities with the highest vehicle theft rates, says NICB. Read More >>

Economic growth, low gas prices may boost auto sales this summer

The National Automobile Dealers Association says the combination of reduced gas prices and higher inventory levels will bring more car buyers. Read More >>

Teenage driving deaths peak in summer months, says report

A new report prompts safety officials to designate May as National Youth Traffic Safety Month. Read More >>

President Obama promises to buy Chevy Volt

During a UAW speech, President Barack Obama discussed auto industry's recovery and his affinity for GM's electric offering. Read More >>

General Motors surpasses Toyota as world's best-selling auto brand

GM saw sales increase nearly 8 percent, outpacing former leader Toyota by 1.5 million vehicles sold. Read More >>

Pay-as-you-go insurance increases in popularity

Many motorists are trimming their expenses by purchasing auto insurance policies that are priced based on how often they drive. Read More >>

Flying car receives special exemptions

Terrafugia's roadable aircraft receives special exemptions from safety standards. Read More >>

Gas saving tips: Separating fact from myth

Some popular gas-saving tips may no longer be relevant for many motorists. Read More >>

Carpooling can save Americans time, fuel costs

Edmunds.com suggests establishing solid guidelines with friends or coworkers before starting a carpool. Read More >>

Simple tips for used-car sellers

Have an old car but don't know how to sell it? Edmunds.com offers tips that can help sellers make their used car more appealing for buyers. Read More >>

Travelers of Chicago highway prepare for gridlock

Officials and travelers agree that Chicago’s Jane Addams Highway needs the maintenance, but motorists are dreading the delays expected. Read More >>

Is now the time to buy a new car?

Industry experts are split on whether now is the best time to buy. Read More >>

Optional coverage essential to cover seasonal hazards

Though springtime melts away snow and ice, alleviating certain driving hazards, the season also comes along with its own weather-related road dangers. Read More >>

Simple steps can help parents find affordable car insurance for teens

Good grades and driving a basic but reliable vehicle are two steps that can lower auto insurance rates for student drivers. Read More >>

Reckless habits may lead to higher auto insurance rates for women

Statistics show women are usually safer drivers, but some reports suggest ladies are beginning to pick up some bad habits. Read More >>

Combining car insurance after marriage, cost-saving or costly?

Just Married? Newlyweds should consider the pros and cons of combining their car insurance Read More >>

Compare insurance costs before buying a new car Read more: http://www.foxbusiness.com/personal-finance/2012/10/03/compare-insurance-costs-before-buying-new-car/#ixzz28YP6kOoN

2012-10-06T13:46:00.001-07:00

Question: I'm shopping around for a new car. Which car costs the most to insure: a Dodge Avenger, Mazda3 or Mitsubishi Eclipse?
Answer: I'm a big advocate of shopping around for auto insurance as part of the research one does before buying a car. If you wait until you've decided on one certain car, or worse yet, already purchased a new vehicle, you may find out your auto insurance premiums will make your choice of car no longer affordable.
The process will give you a big picture of what various cars will cost to own. (See “How to insure a new car”) You may find that the difference between the cars is small compared with the difference between insurance companies.
I ran car insurance quotes on a Dodge Avenger, Mazda3, and Mitsubishi Eclipse for a 30-year-old male living in Houston (your geographical location makes a big difference) with a clean driving record.
I chose liability limits of 50/100/50, which breaks down to $50,000 per person and $100,000 per incident for bodily injury liability and $50,000 for property damage liability. Since these are new cars, I also added physical damage coverages of collision and comprehensive, each with a $500 deductible.
The 2012 Avenger was the cheapest of the three vehicles to insure with an annual rate of $1,422. The 2012 Mazda3 was second with an annual auto insurance premium of $1,534, and the 2012 Mitsubishi Eclipse was the most expensive to insure per year at $1,656.
But look at how much comparison shopping really matters. The quotes for the Avenger ranged from $1,422 to $2,088, for the Mazda3, from $1,534 to $2,518, and for the Eclipse, $1,656 up to $2,516.
Finding the auto insurance provider that is pricing competitively for your set of rating factors is important since, as you can see, the difference in cost can be hundreds, if not thousands, of dollars. (See “Save $1,102 just by shopping around”)
Certainly the car can make a difference. If a car is stolen more often or has higher repair costs -- that is, if the car has more frequent or larger insurance claims, -- then it will cost more to insure than a similar car with lower claims frequency or cheaper parts. (See "How a car gets a bad reputation.")
But the vehicle is only a small component of a very long financial equation. Where you live, your occupation, marital status and other things that insurers see as risk factors will change your rate from the sample I've given here.
You can easily compare rates for yourself, using your own information, with CarInsurance.com's rate-comparison engine. You can find rates on the first car you're considering, then click the Review button at the top right of the rate screen The menu that opens will allow you to change any of the information you have already entered, such as the vehicle, and get an updated quote.
And you can always edit other items to see how they change your rate quote. Raising your deductibles (see “Will higher deductibles save you money”), lowering your liability limits, and so on within the car insurance quoting form will change how much your auto insurance premium will be. Just make sure what coverage you choose is right for you, don't only look at the price. If you need help deciding what coverages you need, use our car insurance coverage calculator.
The original article can be found at CarInsurance.com:
Compare insurance costs before buying a new car

Wheels have come off UK car insurance Prices, accidents and vandalism are all down, but deliberately bloated repair costs mean premiums keep going up

2012-10-06T13:45:00.001-07:00

Vehicle theft and vandalism have plummeted, but insurers still whip up fears of car crime to jusitfy higher premiums. Photograph: Steve Allen/Alamy

The car insurance market is broken. As a country, we're paying around £10bn a year to insure our cars, and billions of that is wasted. According to the AA, drivers in Britain fork out an average of nearly £1,000 each to insure their cars, up from around £350 in 1994. Those figures include everyone from 17 upwards, which is why they seem so high – most middle-aged people pay closer to £500-£700. Yet it's evident that car insurance has shot far ahead of inflation and earnings, despite the fact that (a) we're having fewer serious car accidents and fatalities almost year in, year out; (b) car crime has collapsed; and (c) car prices have fallen.
One of the fantastic things about Britain is how few people die on our roads – just 1,900 last year, with 23,000 serious injuries. In 1990, it was 5,217 dead and 60,000 more seriously injured, while in 1966, the worst year, we killed 7,985 people on the roads. In France, the figures are double ours.
Now let's look at car theft and vandalism. According to the ONS, the total recorded "offences against vehicles" soared in the 1980s, peaking in 1992 at 1.55m. Since then the fall has been astonishing, with just 417,000 offences against vehicles in 2011/12. Even as unemployment has climbed, theft and car crime has continued to fall. So while insurers whip up fear about car crime to justify costly premiums, in fact it's at the lowest level in a generation.
What about car prices? A new Ford Focus (£14,000+) costs a lot more than a Ford Cortina in 1980 (£3,475), but in real terms the price of cars has advanced little, if at all. Meanwhile the price of used cars has fallen, both in real and absolute terms. I called webuyanycar for a valuation on my only car, a 51-reg Alfa. It came in below £400 – less than I pay for the insurance on it.
How did we get to the situation where insurance can cost more than your car? The reality is that the part of the premium that goes to cover accidents and theft keeps falling. Instead we are paying for all the other nonsense now built into your premium – deliberately bloated repair costs, outrageously priced "courtesy" car hire, spurious whiplash claims and burgeoning uninsured losses.
The insurance industry wails about it, but is largely at fault itself. It is riddled with perverse incentives, because the person paying the bill often isn't the one managing the repair. If you knock another car, it goes off to their insurer's "authorised" repair yard, which, because it's charging your insurer, has no incentive to keep costs under control. Its incentive is the reverse – it will want to drag out the repair, add in costs and commissions, and offer a ludicrously expensive replacement car while the other one is off the road, and for as long as possible.
The Competition Commission has begun an investigation into the car insurance market, but don't hold your breath. We need a fundamental rethink. UK car insurance looks like US healthcare; super-loaded with costs, but with worse outcomes than countries with socialised medicine. Government, rightly, makes car insurance compulsory, but leaves profligate private providers to manage it. How about a National Car Insurance Service?

Ban on referral fees seeks to curb rise in insurance costs The government says honest motorists are seeing car insurance premiums rise as insurers seek to cover the costs of increased compensation claims

2012-10-06T13:44:00.003-07:00

Referral fees feed the growing compensation culture that has been pushing up insurance premiums, says Which?. Photograph: Steve Cole/Getty Images

The government hopes to stem rising insurance costs by banning referral fees in personal injury claim cases.
The fees, highlighted by former Labour MP Jack Straw in June, are paid to claims management companies, garages and insurance companies who provide details of accidents – often car accidents – to personal injury lawyers.
The business is estimated to be worth £3bn a year, and successful claims are paid in most cases by insurance policies. Insurers have covered the cost by passing it on to policyholders in the form of higher premiums.
Justice minister Jonathan Djanogly said: "Honest motorists are seeing their premiums hiked up as insurance companies cover the increasing costs of more and more compensation claims. Many of the claims are spurious and only happen because the current system allows too many people to profit from minor accidents and incidents.
"Referral fees are one symptom of the compensation culture problem and too much money sloshing through the system."
Djanogly said people were being encouraged to sue at no risk to themselves, "leaving schools, business and individuals living in fear of being dragged to the courts for simply going about daily life".
He added: "We will ban referral fees and we will go further. We have proposals before parliament to end the bizarre situation in which people have no stake in the legal costs their cases bring. This will make claimants think harder about whether to sue and give insurance companies and business generally an incentive to pass the savings on to customers through lower prices."
A spokesman for the Ministry of Justice denied that the announcement was in response to an announcement by the Office of Fair Trading yesterday that it will investigate soaring car insurance premiums to determine whether drivers are being overcharged.
The Association of British Insurers (ABI) said the industry was committed to keeping costs down for consumers, but reform of the compensation system was necessary if premiums were to come down.
Director general Otto Thoresen said: "Rising claims costs from personal injury claims, excessive legal costs, insurance fraud and uninsured driving, coupled with lower investment returns in recent years, have unfortunately led to rising motor insurance bills for many customers.
"In fact, the motor insurance sector has not been profitable for the last 16 years because the amount paid out in claims and expenses has been greater than that received in premiums."
Thoresen said moves to reform the compensation system in Ireland had led to a 16% reduction in motor insurance premiums.
The news was welcomed by consumer group Which?. Chief executive Richard Lloyd said: "This is great news for motorists. Referral fees feed the growing compensation culture that has been pushing up insurance premiums at a time when many families are already feeling the pinch. It's absolutely right to ban them, and quickly."
There is no timetable for when the ban will be introduced, but the plan is that it will be a regulatory offence for firms to pay and receive referral fees.
The government's proposals currently before parliament focus on stopping losing defendants having to pay a "success fee".
The government is changing the law so that in future the person making the claim will have to pay the success fee, rather than the defendant, and the fee will be capped. The intended result is a fairer split of costs between parties and lower legal costs overall, which means lower costs to pass on to customers or taxpayers.
The proposals follow a Ministry of Justice consultation published in November 2010.

Pilots land lowest car insurance premiums Confused.com insurance premium figures reveal Britain's safest and riskiest drivers

2012-10-06T13:43:00.002-07:00

Late night driving is one factor that puts DJs in the highest risk category by profession for insurance premiums. Photograph: Justin Carrasquillo/Getty Images

Airline pilots are the safest drivers on the road, while party DJs are the most risky, according to an analysis of a year of car insurance quotes sought by customers at Confused.com.
The captain of a 747 will typically pay just £321 a year for car insurance, while a mobile disco owner, who probably makes more late night journeys, will be charged on average £6,810 a year.
Occupation is just one of the risks that determine the size of a car insurance quote, with other factors such as age, location, type of car and driving history usually more important. But some jobs suggest a level of risk that send insurers scuttling.
After mobile disco owners, apprentice professional footballers are the riskiest drivers, said comparison site Confused, and are typically charged £6,264, although that may have something to do with a penchant for souped-up cars.
Football match referees also pay a high price for cover, facing an average car insurance bill of £3,679. The 40p a mile travel expenses that referees earn for travelling to matches may not quite make up for it.
The lowest car insurance quotes, after airline captains, goes to china restorers and toy makers – admittedly not the most racy of professions. But travel guide writers, where the job might include driving to off-the-beaten track locations, enjoy a surprisingly good deal as the fourth-lowest rated profession.
Confused said drivers who changed their job significantly should let their insurer know, as it could save them money if the new role is statistically less risky.
Gareth Kloet, the site's head of car insurance, said insurers took a wide range of factors into account when working out premiums.
"This does not mean that every airline captain will be landing a cheap deal – each individual will be quoted on their own data – but your profession can significantly affect your insurance cost, so if you change jobs it is worth letting your insurer know," he said.
"Contributing factors will include the type of car you choose to drive, the average age of people with that profession and of course your claims history as a driver."
If you want to check the riskiness of your occupation, and how you can legally change the wording of your job to move into a lower risk band, try MoneySavingExpert's car insurance job picker.
If you are an under-25-year-old male driver – always in the riskiest band – then it might also be worth checking those insurance companies that cut the price by installing "smart boxes" in cars which cut the cost if you drive more slowly, and avoid driving between 11pm and 5am when the worst and most expensive car accidents typically occur.

Highest quotes by profession

Mobile disco owner, £6,809.57
Professional footballer (apprentice) £6,263.61
Diplomatic staff, £4,087.96
Footballer, £3,992.69
Nightclub owner, £3,841.29
Referee, £3,679.02
Professional footballer (Football League), £3,422.26
Dealer, £3,082.06
Student (school), £3,006.18
Student (college, living with parents), £2,971.07

Lowest quotes by profession

Airline captain, £320.81
China restorer, £336.44
Toy maker, £337.87
Travel guide writer, £379.09
Guest house owner (unlicensed), £383.76
Smallholder, £390.21
Remedial therapist, £392.72
Ornithologist, £396
Pilot harbour ships, £400.22
State enrolled nurse, £406.42
• Annual comprehensive car insurance
Source: Based on all quotes made on confused.com during the 12 months from 1 October 2010 to 30 September 2011

Money Car insurance Car insurance: why women face £300 rise in premiums An EU ruling means insurance commpanies must end gender discrimination, and female drivers under 40 will be hit hardest

2012-10-06T13:42:00.001-07:00

- Patrick Collinson

Cartoon: Jonathan Edwards

Testosterone-fuelled young males are, all the statistics suggest, a danger on the road. Thrill-seeking young men are prone to drive too fast, late at night, and cause horrific fatalities. Young males are 10 times more likely to be killed or injured than a driver aged over 35. The typical insurance claim by a young male adds up to around £4,500, compared with £1,200 when the driver is middle-aged, whether male or female.
It's the main reason men pay around 40% more than women for car insurance until the age of 40, when accident rates and claims tend to equalise between the sexes. Yet from 21 December, insurers will be banned from taking gender into consideration when setting premiums – and women will pick up the tab.
According to the AA, the typical insurance premium for a male aged 17-22 is now above £3,000, while for a female it is £2,125. Men aged 23-29 pay an average of £1,840, compared with £1,200 for women. Only once men reach the age of 40 do their premiums come down to the same level as women (at around £700-£750).
What will happen when the directive comes into force? According to Gocompare.com, Britain's women are in for a shock. Most are unaware of the ruling and the huge impact it is likely to have. Gocompare's head of motor insurance, Scott Kelly, says: "We expect to see premiums equalised at the higher male rate rather than the lower rate for females. If that is the case, women drivers will see their premiums rise by just over £300 on average, but for younger age groups the increase could be as much as £2,000."
The scale of the premium increase – on top of the inflation-busting rises of recent years – means some young women who do not have to renew their insurance until January may save money by terminating their policy before the year end and starting a new one before 21 December.
But for older women, as Michael Winner might say, it's a case of "calm down, dear..." Unisex insurance rates will have virtually no impact on men and women above 40-45 as they are already treated as near identical risks at that age. Indeed, there may even be a very small bonus: the AA's figures suggest that women over 50 pay about £10 a year more in car insurance than men, so they may be in line for a small reduction. Young men will also benefit, with estimates that they will see 10% or more clipped off their premiums.
For now, the major insurers are silent about how they will price their policies for the unisex era. Money asked Direct Line and Aviva for quotes, but they refused to give specific figures, citing competition reasons.
Aviva would only go so far as saying: "Young males are likely to see their premiums fall, and young female drivers are likely to see their motor premiums rise." At Direct Line, Gus Park, director of motor insurance, said: "We were disappointed with the ruling, but now it is going to become law we're focused on minimising the impact of the gender directive. It's hard to be sure what is going to happen to prices within the market. Many customers will not be adversely affected. However, people shouldn't panic; they should wait for their renewal quote from their insurer and contact them if they have any concerns."
Many people will be justified in asking why the insurers don't just split the difference, with male and female insurance rates equalising halfway between the current rates. But Kelly explains: "If a 20-year-old male is being correctly priced for the risk he presents, then the insurer won't want to charge less than that. Instead, women will have to be charged more."
However that would suggest a huge surge in revenue for car insurance companies from their female customers. In reality, the Association of British Insurers doesn't believe all premiums will rise to the higher male rate, though it does think they will head that way. Overall, it reckons premiums for males will fall by up to 10%, but rise for females by around 25%.
A research paper for the ABI last year argued that the ban on the use of gender will result in an overall loss for consumers, as insurers will have less risk-based information to go on and will thus charge more overall. It also said the ban will not mean all women and men pay the same. "For example, a 27-year-old male driver from Swindon who drives a 2-litre BMW, and travels 15,000 miles each year, would need to be offered the same premium as a 27-year-old female driver from Swindon who drives a 2-litre BMW and travels 15,000 miles each year. This does not mean that, on average, male drivers in the insurer's book would be charged the same premiums as females."
But one thing insurers can't do is ignore the ruling. The ABI fought a long battle to maintain insurers' exemption from EU gender equality rules, but were finally defeated in a European Court of Justice ruling in March last year. The court gave insurers until 21 December to bring in unisex rates, with the biggest impact expected in Britain, Spain and Ireland, where gender-based pricing is most commonly used.
Ian Crowder, a spokesman for AA insurance says: "The ruling abandoned fairness in favour of equality. We were one of the voices saying it shouldn't happen, but it has, the ECJ has ruled, and that's now the end of the debate."
Supporters of the ruling argue it was never fair that gender should have come into premium calculations – plenty of young males are safe, cautious drivers, and plenty of young females are tearaways. Why should either be judged on gender? Instead, what the ruling is likely to spark is a switch to "telematics", where your premium is based on the data transmitted from a mini-computer in your car, which will record when you drive, where, and at what speed, as well as how hard you brake, or even corner. That may mean young males will still be charged a lot more than young females, but it will be because of driving profile, not gender.
Telematics, also known as "pay as you drive", is still in its infancy in the UK, making up only 3% of motor policies sold so far, and an early experiment by Aviva was less than successful. But as young females in particular face much steeper premiums, more will be tempted to opt for insurance based on telematics. A telematics deal usually starts off as relatively expensive, but as data builds up about the driver's habits and style, safe driving is rewarded by lower costs, with potential premium refunds. As Coverbox, a telematics insurer, says: "The box also allows us to check your miles, the times driven, where you keep the car overnight, and if it is different then we can decrease or increase the premium accordingly during the year."
Aviva is trialling a telematics "app" called RateMyDrive on smartphones, which can monitor acceleration, braking and cornering as well as the number of miles driven and the car's location. Safer drivers will be offered discounts of up to 20% off their insurance, although currently the trial is limited to 5,000 motorists.
Meanwhile, the EU gender directive affects all insurance products, not just car insurance. So from 21 December it will be illegal to use gender as a basis for discriminating in the pricing of pension annuities and life insurance. Women will again lose on life insurance; historically they pay lower premiums as they enjoy longer life expectancy. But there is a small payback when they hit pensionable age. Currently women receive lower annuities than men because they live longer, but the ruling will mean women may have to be given higher pension incomes.

Barrows Insurance helps promote Breast Cancer Awareness Month Read more: Barrows Insurance helps promote Breast Cancer Awareness Month - Mansfield, MA - Mansfield News http://www.wickedlocal.com/mansfield/newsnow/x189742123/Barrows-Insurance-helps-promote-Breast-Cancer-Awareness-Month#ixzz28YNjTWkV

2012-10-06T13:41:00.000-07:00

Mansfield —

Barrows Insurance Agency in Mansfield is working to raise both awareness and funds for research during October for Breast Cancer Awareness Month. In a special promotion, for every new customer who writes both their home and auto insurance with Barrows Insurance Agency, Barrows will make a donation to the Susan G. Komen Foundation.
“This is our third year offering this promotion and we are proud to do our part to help fight this horrible disease among women,” said Caitlin Barrows, a Customer Care representative for Barrows and daughter of owner, Jay Barrows. “Our Agency was founded by my grandmother, Janice Barrows, we’re staffed with some amazing women, and we have the privilege of serving so many clients who have had cancer touch their lives – dedicating a strong effort to this cause is important to all of us.”
The women of Barrows Insurance will also take to Facebook to share their personal stories and experiences to honor friends and loved ones who have battled or survived breast cancer. Barrows also encourages Facebook friends to honor their loved ones by sharing their inspirational stories as well.
“Our goal is to raise awareness and to empower women to remain vigilant about their health and fight for continuing research for a cure. We stand with the thousands of survivors and strong women fighting everywhere right now and are glad to utilize the purchase of something as basic as insurance can help make a difference,” said Barrows.
In addition, the Agency will sell Breast Cancer Awareness T-shirts created by Barrows Insurance agent, Mary MacLeod and her daughter, Erin, both of Easton. The idea was born out of support for a dear friend who was battling – and survived – breast cancer. The shirt design was used for their team, “Girl Power,” during the Avon Breast Cancer Walk. Appropriately, the shirts feature the American Cancer Society’s “Fight Like A Girl” logo with a beautiful butterfly image on the front and “Girl Power” on the back. All proceeds from the T-shirts will be donated to the American Cancer Society.
Anyone interested in purchasing the shirts are encouraged to visit the Barrows Insurance Agency website at BarrowsIns.com or their Facebook page for photos and more information. Shirts will soon be available for both adults and children.

Mercury Insurance promotes another initiative to boost rates on drivers who dropped coverage

2012-10-06T13:39:00.003-07:00

SACRAMENTO, Calif. — Billionaire insurance executive George Joseph has been fighting with consumer advocate Harvey Rosenfield for two decades over California's landmark automobile insurance law.
This November, the two are squaring off again over a ballot initiative that would roll back a provision of the 1988 law and let insurance companies charge drivers based on their history of coverage.
Proposition 33 would allow anyone who went five years without a 90-day lapse in payments to maintain a "continuous coverage" discount even if they changed insurers. Opponents have seized upon a provision that says drivers who had dropped insurance coverage in the past would pay higher premiums.
A nearly identical measure was defeated two years ago, in part out of concern that military personnel would be harmed. This version makes an exception for service members and grants an 18-month grace period to people who lose their jobs.
Joseph, the chairman of Mercury General Corp., and other supporters say the change would lower rates for the 85 percent of drivers who already have car insurance. Rachel Hooper, a consultant for the Yes on Prop. 33 campaign, characterizes the measure as a win-win for business and customers.
"George Joseph really believes in competition and opening up the market, and letting consumers shop whatever insurance companies they choose," she said.
The initiative also would help Mercury and other insurers lure drivers from competing carriers because the continuous coverage discounts would follow the consumer.
Consumer groups say the initiative would hurt students, people recovering from illness, the long-term unemployed and others who dropped auto insurance for what they believed were valid reasons.
"It's like a bank robber putting an initiative on the ballot to legalize bank robberies," said Rosenfield, founder of Consumer Watchdog, based in Santa Monica. "The campaign led by Mercury to surcharge the public for not having insurance in the past has been going on since the mid-'90s."
Rosenfield said the initiative would allow companies to boost rates on people who had temporarily dropped their coverage because they could not afford to make monthly payments, and could lead to more uninsured drivers.
The initiative is necessary to get around Proposition 103, the 1988 Rosenfield-written law that forces insurers to set rates using only three main factors: driving experience; miles traveled per year; and safety record. Coverage history is specifically excluded.
If voters adopt Proposition 33, insurance companies would have the option of charging higher rates for previously uninsured drivers but still would be constrained by Proposition 103's prohibition on excessive rates.
In Texas, the Mercury Insurance quotes are 27.8 percent higher for uninsured motorists than for those who already have coverage. The Mercury loyalty discount for Californians is 5 percent.
That calculus is troubling to University of San Francisco sophomore Kelsey Craven, who said her family is scrambling to save money to make up for cuts to state financial aid. She would like to stop insuring the car she keeps in her parents' Sacramento garage, but worries that she will end up paying more in the long run if the rate-setting rules change.
"There are probably thousands of students that are in the same situation as me, who will go through college, graduate and then need a car again," said Craven, a politics major. "When we're already paying off student loans, we'll have to pay that much extra on top of car insurance."
Nan Brasmer said the change could hurt her when she has knee surgery next year and has to give up driving for several months.
"It is hard enough," said Brasmer, 74, who is president of the California Alliance for Retired Americans. "I pay $50 a month toward my car insurance, enough to pay my water bill or buy some food."
In 2010, Joseph outspent opponents of his ballot initiative 12 to 1 and is again pouring millions into his campaign. The 91-year-old executive also has won over the Berkeley-based Greenlining Institute, an economic justice advocacy group that opposed his 2010 initiative.
Greenlining's executive director, Orson Aguilar, said he supports Proposition 33 because it includes an exemption for active duty military and will reduce insurance rates for most drivers. The institute has accepted a $195,000 donation from Joseph.
Brian Sullivan, editor of the Auto Insurance Report newsletter, thinks Joseph and Rosenfield are "well-matched opponents" who make convincing cases.
In the end, he said, voters will have to choose whether they care more about lowering rates for themselves or helping out drivers with spotty coverage histories, who tend to be lower-income.
"It's not a matter of good and evil, it's a matter of what we deem to be fair," Sullivan said.

The IIHS has identified the leading four cars in terms of crash test performance.

2012-10-06T13:38:00.001-07:00

The Insurance Institute for Highway Safety has released its ratings for “Top Safety Pick” in order to identify the car models that performed the best in its auto insurance crash test ratings.

The safety group is among the most influential in the industry.

Among all of the vehicles that were rated, there were four that were given the Top Safety Pick designation. Among them, was the Dodge Dart, one of the vehicles Chrysler is hoping will become a top seller. This 2013 model was originally designed as a joint project between Chrysler Group LLC and Fiat SpA.

Three other models for 2013 were also given this coveted auto insurance designation.

These other Top Safety Picks included the Lexus ES 350 midsize luxury sedan, the Hyundai Motor Co. crossover Santa Fe, and the Subaru XV Crosstrek hatchback. By receiving this auto insurance rating, it means that each of these vehicles were able to perform well within the IIHS crash tests that measured performance from impacts to the front, side, and rear, in addition to rollovers.
According to the chief of the Dodge brand at Chrysler, Reid Bigland, “We had high expectations for the Dart and our engineers delivered.”
Russ Rader, an IIHS spokesperson, explained that last year, there were 180 vehicles tested and among them, 132 received the designation of Top Safety Pick. This year, due to changes in the testing and measures, the list was much shorter. This is meant to encourage the auto insurance and design industry to step up its safety efforts even further. This doesn’t mean that the vehicles are less safe, it only means that the bar has now been raised, and there are only four vehicles in the 2013 model year that have met that challenge, so far.
Each of the four top auto insurance safety performers have been brought into the American marketplace over the last few months and have been showing strong sales among U.S. consumers. After having passed the more stringent safety tests, this can only reflect well on the future sales of those models.

The Hartford, MIT List Top 10 Car Safety Technologies

2012-10-06T13:37:00.001-07:00

The elderly may have a tougher time driving as they age, but getting behind the wheel may be safer thanks to technologies that will require them to do less of that driving themselves.
A new list from The Hartford and the Massachusetts Institute of Technology (MIT) highlights the top 10 car technologies that help older drivers on the road, and many of those technologies are warning and assist systems promoting safe driving and awareness.
The list, assembled by an expert group including professionals from fields including geriatrics and ergonomics, focused on useful devices that could aid mature drivers who were 50 years of age and older:
–smart headlights
–emergency response systems
–reverse-monitoring systems
–blind-spot warning systems
–lane departure warning systems
–vehicle stability control
–parking assist systems
–voice-activated systems
–crash-mitigation systems
–drowsy driver alerts
In addition to compiling the list, MIT’s AgeLab released research findings showing 65 percent of older drivers report that having the latest technologies increases their confidence.
Also, 1 in 4 older drivers say that their foremost concern is their vision during nighttime driving.
That common problem makes smart headlights one of the list’s most useful tools, according to Jodi Olshevski, a gerontologist with The Hartford. Such headlights come equipped with camera-like technology in the front of a vehicle that automatically adjusts the intensity and range of the beam based on oncoming traffic.
“It actually helps you not only see better, but it also reduces glare,” Olshevski said in a video guide released with the list.
The blind-spot warning system, which alerts motorists to any objects entering their blind spots, is especially helpful to older drivers who have reduced range of motion and reaction time, Olshevski said.
“It’s like I have a co-pilot with me,” said Joan Callahan, a new car owner who was featured in the video, about the warning system.
Callahan added that some technologies will take some getting used to, including the reverse-monitoring system that provides an in-dashboard video feed of what is behind the vehicle.
Olshevski said practice makes perfect with such technologies.
“It’s true that a lot of this technology does take some getting used to,” she said. “Once drivers get comfortable and they actually adjust their driving style to make space for these new features, it can really become second nature.
And with that comes a new level of confidence, which all of us can benefit from as we age.”
Facing Greater Risk, Older Drivers Have Insurance Decisions to Make
Coverage rates tick upward for drivers as they enter old age because older drivers present greater risk for insurers to cover.
Based on miles traveled, fatality rates rise beginning at 75 years old before seeing a significant jump after 80 years old, though “fragility begins to increase” between the ages of 60 and 64, according to the Insurance Institute for Highway Safety.
The National Highway Traffic Safety Administration reported that, in 2009, older drivers accounted for 16 percent of all traffic fatalities, 15 percent of vehicle occupant fatalities and 19 percent of pedestrian fatalities.
But older drivers may still be able to find a cheap insurer to provide them affordable coverage.
Overall, crash rates tend to go down as drivers age. And as of August 2011, 31 states and the District of Columbia require insurance premium discounts for drivers 55 years old and over after they’ve completed eligible accident prevention courses, according to the National Association of Insurance Commissioners.
Alabama just made it easier for seniors to obtain that insurance discount, too. Recent revisions to the state’s motor vehicle code reduced the number of instruction hours a driver needs to get reduced premiums from eight to six. Another change made online course participants eligible for the discount.

Illinois Insurance Providers Hiking Prices in August Rate Filings

2012-10-06T13:34:00.007-07:00

The latest batch of rate filings approved by Illinois insurance regulators in August showed rate increases at 16 insurers.
The following approved changes were made for personal auto insurance policies and are on average, with actual rate adjustments ranging from customer to customer.
Illinois Farmers was approved for some of the larger changes out of all the rate filings, with liability rates increasing 17.3 percent and physical damage rates increasing 10.9 percent at the beginning of August. The insurer was also one of the larger underwriters in the filings, writing more than $200 million in personal auto premiums in the state.
Owners, another relatively large underwriter with almost $50 million in personal auto policies, was approved for smaller increases of 0.4 percent for liability and 1.9 percent for physical damage. Those changes took effect at the end of August for new customers and will kick in at the end of September for renewing policyholders.
Regulators approved changes for three coverage programs at Mendakota, kicking in on Oct. 20 for renewing policies while new policy changes have already taken effect:
–Within the Pioneer program, liability policies were approved for a 2.1 percent increase while physical damage policies were approved for a 4.1 percent increase.
–The Premier program was approved for a 2.3 percent increase to auto liability and 4.1 percent to physical damage.
–The Patriot program was approved to decrease both liability and physical damage policies by 0.1 percent.
Approval for increases at Hallmark brought up liability policies by 10.7 percent and physical damage policies by 7.1 percent. Those changes are already in effect.
Auto-Owners approvals, which go into effect Sept. 27 for renewing business and already went into effect Aug. 22 for new customers, sent liability policies up by 0.7 percent and physical damage policies by 1.3 percent.
Changes to Bristol West policies took effect at the beginning of August, boosting liability policies by 10.4 percent and physical damage policies by 5.6 percent. The company underwrites a little more than $15 million in those policies.
On Sept. 24, Victoria Select will increase liability policies by 2.3 percent and physical damage policies by 0.1 percent for new business.
Badger Mutual will hike both auto liability and physical damage rates by 3.7 percent at the beginning of October.
A handful of other companies were approved for increases, but they do not go into effect until November or December. Check back for updates on those.
This information is based on rate filings released by state insurance regulators, whose duties include analyzing insurers’ requests to change their rates and aiding consumers, whether that means answering car insurance questions or investigating policyholders’ complaints.

Illinois Insurance Providers Hiking Prices in August Rate Filings

2012-10-06T13:34:00.005-07:00

Illinois Insurance Providers Hiking Prices in August Rate Filings

2012-10-06T13:34:00.003-07:00

Esurance Extends Business to Arkansas Drivers

2012-10-06T13:33:00.004-07:00

This month, Esurance began selling policies in Arkansas, the latest expansion for the insurer that has seen major growth efforts since Allstate acquired it last October.
Currently, Esurance offers auto coverage in 32 states, according to spokesman Danny Miller. The direct-to-consumer insurer’s last statewide expansion was opening up business in Kansas in July. Miller declined to comment on why it is only now that the company has extended business to these states.
In July, Esurance moved into social media advertising with its “Like to Save” discount that gives policyholders in Texas and Arizona discounts when they “like” the auto insurer through their Facebook account.
Esurance Saw UBI, PAYD Expansion This Year
Esurance has been a focal point of Allstate’s expansion plans since the larger-scale insurer bought out Esurance and Answer Financial for approximately $1 billion in October 2011.
Since then, Esurance pilot-tested and introduced its usage-based insurance (UBI) program, called “DriveSense,” that representatives say can save policyholders up to 30 percent on their coverage.
Also, Esurance’s pay-as-you-drive (PAYD) program, called “Drive Less, Save More” was approved for operation in California.
Esurance Key in Allstate’s Battle for Market Share
Allstate has been battling for its share of an intensely competitive auto insurance marketplace. According to the most recent data from the National Association of Insurance Commissioners (NAIC), Allstate has the second-largest market share, at 10.3 percent, but is closely trailed by GEICO, which owns about 9 percent of the market. Progressive follows GEICO with 7.9 percent.
Opening up business in more states undoubtedly lends weight to Allstate in the race to be the marketplace’s leading auto insurer; Allstate saw strong profits in its first- and second-quarter financials.
In the second quarter, Allstate representatives said that the number of policies in force at Esurance had grown 13.5 percent since the end of 2011.
The growth in policies are at least in part due to an “aggressive rebranding” of Esurance, according to a June SNL Financial report on advertising within the auto coverage industry.
According to the report, Allstate poured $45 million into advertising Esurance in the first quarter of 2012, driving campaigns including commercials voiced by actor John Krasinski from NBC’s “The Office.”

Survey: Non-driving Insurance Pricing Factors a Consumer Turnoff

2012-10-06T13:32:00.003-07:00

A nationwide survey of consumers shows they find it unfair that factors unrelated to driving play a part in how much they’re charged for auto coverage, while insurers refuted the results from the survey, saying the pricing process is complex and that use of non-driving factors is necessary.
The survey was conducted by ORC International for the Consumer Federation of America (CFA) and included responses from 1,100 people. Factors that those surveyed find to be unjustified include education levels and presence of previous coverage.
“These factors have nothing to do with driving and discriminate against lower-income drivers,” Stephen Brobeck, CFA executive director, said in a statement. “Premiums should largely reflect factors … over which drivers have some control and which directly affect insurer costs.”
The question posed to respondents was: “How fair do you think it is for insurers to use each of the following factors in deciding on an auto insurance price for a driver?”
A policyholder’s number of traffic accidents was the top factor in the survey that respondents said was a “very” or “somewhat” fair factor, with 87 percent. Meanwhile, gender was at the bottom of the pile, with only 30 percent responding that it was a justifiable factor used in insurance rate pricing.
The survey’s complete listing is as follows, with the percentage of respondents saying the factor was “very” or “somewhat” fair:
–Traffic accidents caused: 87 percent
–Moving violations like speeding tickets: 85 percent
–Number of years with a license: 74 percent
–Age: 66 percent
–Miles driven: 61 percent
–Location of residence: 45 percent
–Occupation: 33 percent
–No previous insurance because no car: 32 percent
–Level of education: 31 percent
–Credit score: 31 percent
–Gender: 30 percent
Insurers Rebut CFA, Say Using Range of Factors Necessary
The Property Casualty Insurers Association of America (PCI), which represents 1,000 insurers in what is the industry’s largest trade group, called the CFA’s latest findings a “mostly misguided public policy prescription” that would be “counterproductive and hurt most motorists, resulting in higher costs and fewer choices for all consumers.”
Non-driving factors play just as important as driving-related factors in the complex method of pricing coverage, according to PCI.
“When blended together, these factors help to ensure that low-risk consumers can be better identified and pay less for insurance,” Alex Hageli, PCI director of personal lines, said in a statement.
Pricing methods are so complex, Hageli said, that the response from consumers in the survey was unsurprising.
“We find that many motorists, including many legislators, simply do not know much about how premium is calculated, nor do they understand why insurers use certain factors to determine premium,” he said. “However, once it is explained to them that the use of this information allows their insurer to charge them a more accurate rate, including for most people a lower rate when credit information is considered, then we find that most support that use.”
PCI also refutes CFA’s recommendation that insurers be regulated further, according to Hageli, who added that the best way to lower rates is to diversify the market.
“Consumers benefit with lower rates, more choices and greater market stability when insurers are able to use the most accurate underwriting and rating tools available,” Hageli said. “If restrictions are placed on insurers’ rating factors, then what will happen is that lower-risk consumers end up paying more in order to offset premium decreases given to higher-risk consumers.”
The Insurance Information Institute also spoke out publicly against the survey’s results.
With Quote Analysis, CFA Claims Premiums Are Unjustly Inflated by Factors
In a separate analysis using several car insurance quotes from websites of State Farm, Allstate, GEICO, Progressive and Farmer’s, CFA found that those non-driving factors taken together could increase premiums for low- and moderate-income motorists “often by more than 100 percent.” The profile used in those quotes was a 35-year-old woman with a good driving record seeking minimum liability coverage in Baltimore, Miami, Louisville, Houston and Los Angeles.
“The fact that these families often can’t obtain this coverage helps explain why so many risk fines, or even imprisonment, by driving without insurance,” Brobeck said.
In January, the CFA published a report saying that that rates could be made “fairer, lower and more affordable” if regulators “severely restrict auto insurers from using factors unrelated to driving.”

Survey: Non-driving Insurance Pricing Factors a Consumer Turnoff

2012-10-06T13:32:00.001-07:00

Survey: Non-driving Insurance Pricing Factors a Consumer Turnoff

2012-10-06T13:31:00.005-07:00

Survey: Non-driving Insurance Pricing Factors a Consumer Turnoff

2012-10-06T13:31:00.003-07:00

Pennsylvania Reports Insurance Rate Hikes for October

2012-10-06T13:30:00.001-07:00

The latest batch of filings from Pennsylvania regulators, consisting mostly of hikes to insurance prices, means that consumers retrieving an auto insurance quote online could see a handful of new, higher rates.
The following filings were approved and take effect this month.
Horace Mann, Progressive Companies Hike Rates
Two companies under the Progressive banner will be increasing insurance rates, both by 6.8 percent overall. At Progressive Casualty, that change amounts to a $50.70 increase per policyholder on average. At Progressive Northern, it amounts to a $70.29 average increase for each policyholder.
The Progressive increases take effect Oct. 5 for new policyholders but won’t affect those renewing policies until Nov. 14. At least 24,000 Progressive policyholders will be affected by the change.
Horace Mann and subsidiaries Horace Mann Property and Casualty and Teachers Insurance Company will all be implementing rate increases that will go into effect for all policyholders on Oct. 16. Horace Mann’s 1.7 percent increase overall means about a $14 average increase for each of the 5,370 policyholders affected.
Horace Mann Property and Casualty raised overall rates by 5 percent for about 11,300 policyholders, amounting to a $33.44 average increase for each.
At Teachers, rates will be hiked by 2 percent overall, amounting to an average $12.82 increase for about 5,370 customers.
Other Companies Post High Average Per-Policyholder Increases
Hartford of Illinois showed the largest average increase per policyholder, at $231.90. The 8.4 percent overall rate increase takes effect on Oct. 6 for both new and renewing policyholders but will only impact upwards of about 1,250 of them.
Integon Indemnity reported the second-highest overall rate increase out of the filings, at 7.3 percent. The 8,540 policyholders affected will see an average increase of $74.27.
Out of this latest batch of filings, Metropolitan Casualty also reported a relatively large average increase for each policyholder. The insurer’s 5.4 percent increase impacting 9,250 policyholders means an average increase of $87.62 for each policyholder. The changes are effective Oct. 11 for renewing policyholders and are already in effect for new customers.
GEICO Casualty Decreases Rates
GEICO Casualty has decreased overall rates for 13,480 policyholders by 2 percent, amounting to an average decrease of $37.79 per policyholder. The changes went into effect in August for new customers and on Oct. 1 for renewing customers.

Allstate Insurance Sued Over Esurance Purchase Terms

2012-10-06T13:29:00.003-07:00

White Mountains Insurance Group filed a lawsuit against Allstate this week claiming the nation’s second-largest insurance company broke contractual obligations when it bought Esurance in a billion-dollar sale last October.
In the federal lawsuit, filed Monday with the U.S. District Court for the Southern District of New York, White Mountains alleges that Allstate breached its contract by improperly adjusting the final purchase price.
According to court documents, the agreement was that Allstate would pay $700 million plus an additional amount to acquire Esurance.
A clause in Allstate’s purchasing contract required the insurer to adhere to a “two-stage process” that would determine the additional payment made to White Mountains, which would be based on the book value of Esurance. The initial payment would be determined by White Mountains’ assessment of the book value and be made upon the closing of the deal, which was on Oct. 7 of last year. After that closing date, the contract required a “Purchase Price Adjustment” that would settle the difference between the estimate and actual book value.
White Mountains claims that Allstate was almost five months late in auditing its balance sheet for the purchase, missing a “firm 90-day deadline after the closing.”
Allstate then proposed to cut $5.2 million from the book value based on an unrelated settlement Esurance had to pay in April 2012, which was technically after the 90-day deadline.
“It is improper for Allstate to adjust the [Oct. 7] tangible book value, and thus change the purchase price, based on events that occurred long after [Oct. 7],” White Mountains stated in the suit. “Had Allstate met the contractual deadline, the $5.2 million payment in April 2012 would not and could not have been included.”
As a top rated auto insurance company, Allstate holds the second-largest market share in the auto coverage industry with about 10 percent, according to the most recent data from the National Association of Insurance Commissioners. GEICO and Progressive closely trail in market share with about 9 percent and 8 percent, respectively.
Judge George B. Daniels is presiding over the case, named White Mountains Holdings (Luxembourg) S.a.r.l. vs. The Allstate Corp.

Insurance Institute Sees Minor Jump in Coverage Costs

2012-10-06T13:28:00.004-07:00

Consumers’ average auto insurance expenditure could rise to $839 this year, making 2012 the third straight year of increases, according to projections released this week by the Insurance Information Institute (III).
If the average expenditure does reach the projected $839, it would put the figure close to the peak of consumers’ costs in 2004, when they spent an average of $842 on auto coverage—the highest average expenditure in the past 18 years.
The latest estimate would represent a 2.8 percent jump from 2011 and a 6.8 jump from 2009.
Price Jump Nominal after Adjusting for Inflation
The projected increase is nominal when adjusted for inflation, amounting to an adjusted $3 jump between 2011 and 2012. The inflation adjustment also makes the 2012 estimate lower than any average expenditure recorded between 1994 and 2010, according to the III.
The reason that the increase in dollar amount is so minor is that “the inflation rate has remained quite steady in recent years,” said Michael Barry, III vice president for media relations, in an interview.
Unaffordable hikes are virtually impossible with the today’s combintion of state regulation and a competitive marketplace where consumers have a healthy number of choices when they compare auto insurance companies, Barry said.
“Consumers who find that their auto insurer, in their view, is charging too much are certainly not lacking for options,” Barry said. “In almost every state, you have a very competitive marketplace.”
Consumer Habits Contribute to Trend
Barry added that average expenditures do not necessarily equate to the price of coverage, but instead represent what consumers pay for coverage.
“During the economic downturn, you may have incidents where people are looking to save money and are forgoing optional kinds of coverage,” he said.
One of those optional coverage forms is comprehensive coverage, which Barry said consumers are unwisely dropping from their policies to save money.
“That’s not a good decision because it ends up being a relatively small percentage of your entire coverage costs, yet it covers a very broad number of events that usually happen,” said Barry, who offered examples such as trees falling on a vehicle and partial or complete flooding of a vehicle, both of which would be covered by comprehensive coverage.
The estimates are based on a combination of expenditure figures from the National Association of Insurance Commissioners and the Consumer Price Index, Barry said.

Florida Insurers Submit Mixed Bag of Post-Reform Rate Changes

2012-10-06T13:27:00.000-07:00

Recently approved rate filings from Florida insurers show mixed results when it comes to measuring whether reforms passed last year by the Legislature will effectively cut car insurance costs for the average Floridian, according to new statistics from the Florida Office of Insurance Regulation (FLOIR).
The reform bill passed earlier this year stated that Florida auto insurance companies would have to cut personal injury protection (PIP) premiums by 10 percent when the law goes into full effect in 2013 and by 25 percent by 2014, or explain why the cuts weren’t possible. Those price drops would reflect insurers’ reductions in expenses that are to come from the reform.
According to the rate filings already approved by regulators, though, the PIP overhaul may be only reducing the size of rate increases—not cutting premiums overall.
Of the seven post-reform rate filings approved by regulators, only three reflect reductions in rates. One of those three already would have seen a reduction without the implementation of HB 119, and the other applies only to a collector vehicle program.
For the other four companies, PIP premiums could still be going up between 3.9 and 26.3 percent overall. These insurers still say the law did have a positive effect, indicating that the increases would have been significantly higher if it had not been for HB 119. The justified increases would have ranged between 15.4 and 60.9 percent in the absence of HB 119, they say.
“Although it initially appears the savings will result in a mitigation of rate increases rather than actual rate reductions for most companies,” said Florida insurance commisisoner Kevin McCarty, “it does represent a major shift in the trajectory of PIP insurance rates in Florida.”
Indicated Rates vs. Actual Rates
One important thing to note about the numbers released by the FLOIR is that they reflect the indicated rate change, which is basically the rate level the companies say they are justified in asking for, according to Jack McDermott, of the FLOIR communications office.
The actual rate changes that policyholders will see can vary from the indicated rate for two basic reasons, McDermott says:
1. There are discrepancies between insurers’ and regulators’ data projections. If the data leads to different conclusions, “the office can make adjustments to the indication.”
2. The company requests a rate that is different from the indicated rate. This could happen if the insurer realized that hiking rates by the maximum amount justified would price its coverage above competitors. It could ask for a lower rate to remain competitive.
Where Are the Savings Coming from?
According to the governor and legislators who were pushing through the reforms this past spring, most of the savings would be coming from stamping out fraud and abuse that are said to be rampant in the Florida car insurance system.
A report from Pinnacle Acturial Resources commissioned by the FLOIR, however, indicated that nearly all of the savings are likely to come from reductions in coverage provided by the average Florida insurance policy.
According to the report, the biggest influencers on costs are expected to be the limitation on non-emergency medical treatment under PIP and the exclusion of massage therapy and acupuncture.
Under the new non-emergency stipulation, only $2,500 of a PIP policy can go to treating medical conditions that are deemed “non-emergency.” Previously, drivers could invoke coverage up to their policy’s limits to treat any type of auto-related injury.
More Info to Come
The premium data reflected in the FLOIR’s announcement is only representative of a very small portion of the overall car insurance market.
As of Oct. 1, the FLOIR had received more than 100 rate filings that are supposed to reflect the anticipated savings from reforms. The seven mentioned in the report are only the ones that have been approved so far. The full picture will become clearer as more of those filings are approved.

Colorado Insurance Recovery Numbers Up from Last Year

2012-10-06T13:26:00.000-07:00

A Tuesday announcement from Colorado regulators showed that they recouped more than $12.5 million to consumers in the state for the 2011-12 fiscal year, up from the $11.7 million recovered the previous year.
The state Division of Insurance also released its annual report on complaints regulators received about insurers, which showed that although “auto insurance complaints have been decreasing slightly from year to year,” they still make up the vast majority of all complaints. Complaints filed against car insurers, though, also have one of the lowest rates of complaint confirmation. Only about a third of investigations into car insurers’ actions result in a finding of wrongdoing on the coverage provider’s part.
In fiscal year 2011-12, complaints about car policies accounted for 1 in 4 complaints.
However, Colorado employs a unique system that separately categorizes complaints and “auto protests,” which are “challenges to a car carrier’s imposition of surcharges, cancellation or non-renewal, or reduction in coverage” on a vehicle policy. This year’s report is the last to include both categories separately.
Combined with protests, which amounted to 25.2 percent of all complaints, total car-insurer grievances accounted for more than half those fielded by Colorado regulators last year.
Vehicle-related complaints also yielded the most recovered funds of any policy type, at about $3.4 million. The average amount recovered per confirmed complaint was $7,654 for complaints and $240 for protests.
While denial of claims and delays in claim payments are the top reasons for complaints when considering all types of policies, most car coverage complaints had to do with underwriting and how vehicle insurers calculate premiums.
Auto complaints averaged 46 days until closure, tied with homeowners-related complaints as the shortest period among all types of coverage.
“Assisting consumers and helping to resolve issues they have with their insurance company are some of our most important responsibilities,” commissioner of insurance Jim Riesberg said in a statement.
Farmers received the most total complaints of the top 20 Colorado auto insurance companies, with 192 complaints, according to the report. It was also the company that had the most confirmed complaints, with 72.
But when considering the complaint index, which compares individual insurers’ complaint records with the average for all insurers, Allstate Property and Casualty Insurance Company had the poorest record. The average insurer had about one complaint for every $1.35 million worth of premiums it wrote. Allstate P/C policyholders filed complaints at a rate that was nearly twice that.
State Farm, which holds an 18.46 percent share of the Colorado auto insurance market, had the best track record with consumers out of the state’s 20 largest auto insurers. State Farm policyholders filed complaints at a rate that was only about a third of the average.

Erie Ordered to Pay Maryland Policyholders $2 Million

2012-10-06T13:25:00.000-07:00

The Maryland Insurance Administration has ordered car insurer Erie to pay a portion of its customers nearly $2 million for raising their rates without giving them proper notice that they would be doing so.
The funds are being distributed among about 6,100 Maryland car insurance customers. They will be reimbursed the extra premium amounts they paid, plus 10 percent interest.
Under Maryland law, insurers are required to notify car insurance policyholders in writing of an upcoming premium increase at least 45 days before that new premium goes into effect, which two Erie companies failed to do.
According to the consent order, Erie initially reviewed the matter at the request of the administration and reported that only one of its companies had failed to send the notices and that there were only three policyholders who did not receive such notice.
After random sampling in late January 2012, though, Erie found that the issue was “systemic in nature and the issue extended to more than a single company.”
The issue turned out to be a coding error related to the expiration of discounts that left customers with higher premiums without any advance notice.
In addition to the $2 million in restitution, Erie will also be required to pay a $50,000 fine to state insurance regulators.

Newton man pleads guilty to auto insurance fraud

2012-10-06T13:22:00.001-07:00

By Laura E. Franzini, Globe Correspondent

A Newton man pleaded guilty this week to insurance fraud and larceny for illegally filing fake insurance claims through his Somerville auto shop, prosecutors said today.
Michael Block, 40, of Newton, pleaded guilty Wednesday in Middlesex Superior Court to charges of insurance fraud, larceny, forgery, and uttering false statements, Middlesex District Attorney Gerry Leone said in a press release.
Middlesex Superior Court Judge Gary Inge sentenced Block to two and a half years in the house of correction, with five years probation from and after his jail sentence, with the condition that he pays about $14,000 in restitution to five automobile insurance companies.
"The defendant engaged in illegal activities to defraud customers and insurance companies all for his own financial gain," Leone said. "I applaud the collaborative work of multiple agencies involved in this investigation to end this fraudulent activity."
Block operated Motor Sports, Inc. in Somerville. In the fall of 2010, Block fraudulently utilized the registration number of another auto body shop to file false insurance claims and receive money from various insurance companies, the DA's office said.
The defendant told customers who were seeking repairs to provide insurance companies with a false version of how the damage occurred, according to prosecutors. He would would then increase the damage to vehicles to gain additional money from insurance companies.
During their investigation, authorities observed Block moving customer cars to different parking lots, the DA's office said, and video surveillance showed the defendant enhancing the damage on vehicles.
A further investigation revealed that the defendant told a customer to tell the insurance company that damage to her vehicle was caused by a hit-and-run driver, the DA's office said. A forensic review showed that further damage occurred while the car was in Block's possession and that parts paid by the insurance company to be replaced were not actually replaced.
The case was investigated by Governor's Auto Theft Strike Force, the National Insurance Crime Bureau, and state police assigned to the Middlesex District Attorney's office.