Wisconsin Auto Insurance Rates to Jump from Third Lowest to One of the Highest

With the backing and support of Wisconsin trial attorneys, Gov. Jim Doyle is proposing a raise in the minimum liability coverage for auto insurance policies in the state. If passed, this proposal will become part of Wisconsin auto insurance laws January 1, 2010 and could propel the state auto insurance rates from the third lowest to one of the highest in the country. The plan proposes to raise minimum coverage from $25,000 to $50,000 per person and from $50,000 to $100,000 per incident. Property damage will go from $10,000 to $15,000.

This proposal comes as a part of the governor’s new budget plan and has raised concern among members of the state’s insurance industry. Mark Thomsen, president of the Wisconsin Associate for Justice, points out that it has been more than 25 years since the state has raised the minimum amount of auto insurance. He applauds Governor Doyle’s proposal. According to Doyle spokeswoman Carla Vigue, “the proposed changes would bring coverage more in line with the increased costs of treatment for people injured in accidents, and would provide greater certainty to those with insurance.”

However some believe that these changes are for the benefit of Wisconsin trial attorneys. For them, a change in the state’s auto insurance coverage will provide for greater settlements on personal injury cases. Many lawmakers also question why the proposal is included in the budget plan for Wisconsin. The governor believes that the state’s Medicaid health care program is being affected as car accident victims can’t pay for medical costs to treat their injuries. It remains to be seen if this proposal will actually be a part of the upcoming discussion on Doyle’s budget since the Joint Finance Committee will ultimately decide whether it will have great enough impact on the state’s budget.

Wisconsin is one of only two states in the U.S. that does not require drivers to have auto insurance. Insurance industry trade groups worry that Wisconsinites may forego auto insurance as the impact may force state residents to pay at least 33 percent more in premiums. According to 2007 estimates from the Insurance Research Council, the uninsured rate in Wisconsin is higher than the national average. As unemployment rises, more of the state’s residents find paying for inessentials to be out of the question.

Wisconsin Insurance Alliance president Andrew J. Franken has encouraged the Doyle administration to give the proposal more thought and consider all of the ramifications. However Wisconsin auto insurance reform is a part of Doyle’s budget rather than a separate bill so it is unlikely that there will be any public debate. Says, Franken, “We’re very disappointed that this is the process the governor and others have chosen.”

Why Missouri Experiences Highest Number of Auto Insurance Complaints

Like other states, Missouri requires auto insurance for its residents. However, the state offers several different ways for drivers obtain this kind of coverage. There’s the standard way — purchasing insurance from a company — but there’s also a ‘self insurance’ option. This allows someone to sign a guarantee bond with the appropriate authority, provide proof of his ability to pay, and then count that as insurance. This is called a surety bond. Whether the “policyholder” will be able to pay at the time of an accident, though, isn’t really guaranteed. The driver could lose ability to pay in between the time of the bond and the time of the collision or allow the standard insurance to lapse. In addition, the insurance company itself could be incapable of paying. All of those problems, and others, lead to Missouri auto insurance complaints.

Insurance companies that agree to provide coverage in Missouri know this. The companies also know that there are uninsured drivers in that state. While a person is required to show proof of insurance to register a vehicle or renew the car’s tag, once that’s done the insurance could be canceled. Some people do that to avoid paying money for insurance. Because people resort to canceling auto insurance all together, rates for those who do hold current policies are going to rise. Auto insurance rates have to be high enough to compensate for the people who don’t have insurance — or who don’t have enough insurance to cover the damage that they actually caused. With the surety bond option making insurers and some other drivers nervous, Missouri sees a large number of auto insurance complaints regarding both the lack of auto insurance in the state and the increasing auto insurance rates.

Anyone who lives in Missouri is subject to high rates, and that leads to a lot of complaints. People think that they’re being overcharged because they’re paying high rates even though their driving records are clean. Unfortunately, auto insurance companies have to charge what experience has shown them to be the right price for a particular segment of the population — and part of that is based on the state in which that population lives. Any state that has a lot of uninsured drivers, different ways of showing proof of insurance (i.e. not through a standard insurance company) and/or a lot of accidents and claims is going to have high auto insurance rates. That, in turn, is going to lead to a lot of auto insurance complaints. That is because ultimately policyholders are unaware of all of factors that determine auto insurance rates, along with the auto insurance requirements that are necessary in states like Missouri.

U.S. Auto Insurance Market Veers into Underwriting Loss in 2009

The challenges facing the U.S. auto industry throughout 2009, with pressures ranging from the near-collapse of both General Motors and Daimler-Chrysler to various stimulus programs that have attempted to accelerate sales, have received significant attention. A tangential, yet equally important, byproduct of this battle is the fact the auto insurance market is likely to realize an underwriting loss for the year. Faced with lower premiums and higher loss costs, according to FitchRatings’ Auto Insurance Overview, the industry is experiencing the same economic downturn that is affecting the whole economy.

While the increase in loss costs is somewhat expected on a year-over-year basis — as cars become more expensive to repair, labor costs rise and newer cars replace less expensive older cars — the decrease in premium revenue is the direct result of the economic slowdown. At the heart of this issue is the decrease in auto sales – new cars command higher insurance premiums than older cars and net a better return to the insurance companies. As early in the year as January, Reuters was reporting that auto sales in the U.S. were expected to fall by 13 percent, reaching the lowest levels in 27 years — these numbers have worsened since those projections.

The “Cash for Clunkers” program had some impact on accelerating car sales, enticing buyers who may have chosen to wait to buy a new car sooner. However, the crunch felt by the consumer is undeniable. The program was short in duration and may have only been successful in keeping the level of new car sales from decreasing to even lower levels, rather than having a significant impact in boosting sales. Consumers are being more selective with their decreasing levels of disposable income, significantly slowing the rate of new car sales.

Also adding to the decreased underwriting levels, as noted in the same Fitch report, is increased price competition. As insurance companies must fight harder for each dollar, they have been unable to increase auto insurance premiums sufficiently to keep pace with the lower rates they receive on the older vehicles they insure. Furthermore, as consumers are increasingly drawn to the low-cost provider over the high-service provider, online-centric companies have been able to increase their market share and have continued to drive down the overall level of auto insurance premiums. In the current economic environments, pricing power has been decreased across the board, forcing companies in general to be more competitive. With inherently increasing costs, the industry faces a year in which costs will outpace revenues.

The combination of falling revenues — driven by lower new car sales and increased price competition — and rising cots, make it likely that the auto insurance market will report an underwriting loss for 2009.

Texas Automobile Insurance Plan Association to Raise Rates by More than 2%

According to the Life Insurers Group news site, the Texas Automobile Insurance Plan (TAIPA) intends to raise auto insurance rates for its high-risk policyholders starting November 2009. TAIPA, the state’s high-risk driver plan, assigns insurance coverage to drivers who can’t get policies from private companies due to their high-risk status.

Known as the “assigned auto insurance market,” TAIPA issues policies that offer basic liability insurance as required by Texas state law, as well as limited collision and personal injury protection. In 2008, the association assigned 12,000 policies to drivers who were, for the most part, considered high-risk because of poor driving records or high claims rates. To be eligible for the coverage, the drivers were required to certify that two private auto insurance companies rejected them within the last 60 days. Like most state-sponsored auto insurance programs, TAIPA insurance coverage costs more than policies from other private companies. TAIPA’s high-risk policyholders pay surcharges, also called additional premiums, for any traffic convictions. They are also required to pay higher premiums than others in the event of an accident. According to Jerry Johns, a spokesperson for TAIPA, the association projects it will assign least 10,000 policies this year. With this in mind, and the fact that costs of claims are constantly rising, an increase in insurance rates has been deemed necessary.

According to the State Department of Insurance, The Texas Commissioner of Insurance issued an order on Aug.19, 2009, relating to changes in the rates for private passenger and commercial Texas auto insurance provided through TAIPA. While the rates charged for bodily injury liability, personal injury protection, and uninsured or underinsured motorist coverage were decreased by 4.1, 8.2 and 2.4 percent respectively, rates were increased by 8.3 percent for property damage liability. Therefore the overall increase to the private passenger auto insurance rates provided through TAIPA is 2.2 percent. These changes will go into effect Nov. 1, 2009.

According to Johns, the auto insurance rate increase is needed because of the rising costs of hospital services, physicians’ fees, along with the costs to repair damaged vehicles. TAIPA customers can download and view the new private passenger and commercial auto insurance rate pages (rate bulletins) in Excel and PDF formats from the Texas Department of Insurance website. They cannot, however, escape the fallout from the accidents of the previous year.

There is hope, however, for concerned policyholders wishing to turn things around. According to the Texas Department of Insurance, the state is encouraging private insurance companies to take policyholders out of TAIPA and insure them at lower rates after a year without tickets or accidents. The rules also require companies to offer cheaper “voluntary” policies to their TAIPA policyholders who have gone three years without tickets or accidents.

Survey Shows that Nearly 80% of Consumers Displeased with Auto Insurance Rates

A new survey released in mid-October by LowerMyBills.com shows that 79 percent of consumers feel that they are paying too much for their auto insurance. The same survey also reports that more than half of consumers have tried to reduce their auto insurance rates in the last year.

The study’s authors point to the economic recession as the main reason why consumers are becoming more proactive when it comes to reducing the amount of money they pay each month on car insurance. According to the study’s findings, 54 percent of consumers said that they have tried within the last year to reduce their auto insurance premiums. That leaves 46 percent of consumers who have not tried to do this. But of this group, 83 percent said that they do plan to try to reduce their auto insurance rates during the next six months.

The survey also revealed that a significant number of drivers lack the information they need to make changes in their auto insurance. A total of 45 percent of respondents said that they do not understand how to find the best coverage for their own situations. An additional 49 percent of respondents said that they were not familiar with the discounts offered by their insurance company, and did not know for which of these discounts they qualified. Seventeen percent of policyholders also admitted to never taking the time to study their coverage in an effort to obtain auto insurance that better fits their financial needs.

For those consumers who do want to reduce their auto insurance rates, there are plenty of ways to do so. The best is to avoid reckless driving habits and keep a clean driving record. Insurance companies offer discounts to drivers who don’t have speeding tickets or accidents because they are less likely to file claims in the future. Consumers can also save money by bundling multiple insurance policies with the same company. Insurers often provide discounts to customers who take out both their home and auto insurance through them.

To reduce their monthly premiums, drivers might also consider increasing their deductible. The deductible is the amount of money that drivers have to pay before their insurance company will cover the rest of the costs of an accident. Drivers with higher deductibles generally pay lower monthly premiums. It’s important, though, for consumers to avoid taking on a deductible that they would struggle to pay.

Regardless of the struggling economy and the rising cost of auto insurance, policyholders should continue to seek out the best auto insurance coverage they can for the best price. The rising popularity of auto insurance comparison websites makes it easy for anyone to do this with the click of a mouse.

National Vehicle Theft Rate Lowest in 20 Years

According the Federal Bureau of Investigation (FBI), vehicle theft has dropped to the lowest rates in the past 20 years. This is a significant fact because the amount of cars, trucks, and SUVs on national highways has more than doubled. Here are some reasons why there are currently less instances of auto theft.

The FBI reports that 956,846 vehicle owners experienced theft of their automobiles in 2008. Breaking it down, that equals 315 stolen vehicles for every 100,000 on United State’s roads. In 1991, 1.66 million cars were stolen — 659 for every 100,000 vehicles. These numbers mean that instances of vehicle theft have been practically cut in half.

Why is this? Recent auto insurance claims reflect that drivers reporting theft tend to have older vehicles with out-of-date security features. Manufacturers have gotten smarter and more technologically advanced when it comes to the types of auto theft precautions they are placing in current car models. Newer vehicles parked on streets, in dark garages or in the driveway of a residence are harder to steal due to being equipped with state-of the art anti-theft devices. Such devices include smart car alarms, equipment that immobilizes parts of the engine if being tampered with and tracking devices that allow authorities to track vehicles if they are stolen. Specific examples include installed global positioning systems and silent alarms that aid authorities not only in tracking stolen vehicles, but in catching the thieves as well. In addition, drivers are taking action to keep their vehicles ahead of the game. Prompted by potential auto insurance rebates, many drivers are equipping older models that don’t come standard with their own anti-theft devices with newer systems. Though there is no way to completely prevent vehicle theft, it seems people are doing everything they can to make sure they are victims of this crime.

Another simple way of protecting yourself against the effects of auto theft is making sure your auto insurance coverage protects you in the event that your car is stolen. Having the proper coverage can help you repair your vehicle if recovered from a theft of provide the funds for a replacement vehicle while you search for a new one.

With the drop in the amount of car theft in the past 20 years, it’s obvious anti-theft devices have come a long way. But don’t depend primarily on your alarm system to keep your car safe. Also have some common sense. Be aware of the surroundings in which you park your car and avoid leaving valuable items, like GPS systems or other electronics, in clear view. Doing these things will help you avoid becoming the victim of vehicle theft.

Michigan County Offers Driver’s Safety Class to Reduce Auto Insurance Premiums

Counties and municipalities across the United States are turning to a wide variety of measures to help reduce auto insurance premiums. This makes sense; the economy is still struggling. However, when insurance rates rise too high, it causes drivers to drop their auto insurance as they struggle to pay their other bills. This isn’t good news for anyone. Motorists who drive without insurance are breaking a state law and can face serious fines if caught without coverage. In addition, insured drivers then struggle to collect any payments should they get into an accident with an uninsured driver.

Uninsured drivers are likely to become an increasing problem for most states. A study released earlier this year by the Insurance Research Council said that thanks in part to the bad economy, one in six drivers in the United States will be uninsured by 2010. The problem of uninsured drivers varies from state to state. According to the research council, the five states with the highest percentage of uninsured drivers in 2007— the last year for which data is available — were New Mexico, with 29 percent; Mississippi, 28 percent; Alabama, 26 percent; Oklahoma, 24 percent; and Florida, 23 percent. In addition, according to the Insurance Research Council, the number of uninsured motorists rises when the unemployment rate is high.

There are ways, though, for states and counties to help drivers reduce their auto insurance premiums, encouraging them to keep their auto insurance current. Isabella County in Michigan is one of the counties taking a proactive approach.

Motorists pay lower Michigan auto insurance premiums when they drive safely. Most auto insurance companies give drivers significant discounts when they go a certain amount of time without racking up a speeding ticket, moving violation or serious accident. Teen drivers, too, can qualify for significant safe-driver discounts. Officials in Isabella County understand this, and they’re doing their part to make sure that motorists in their county do qualify for these safe-driving discounts.

According to the Saginaw News in Michigan, in late October, Isabella offered motorists a driver’s safety class that focused on basic driving skills and techniques. The county’s sheriff is quoted in the story as saying that the class was designed to both refresh motorist’s driving skills and reduce the amount of traffic crashes in the county. Many auto insurance companies offer reduced auto insurance premiums for those that complete one of these classes. Such classes may become an important tool for states looking to reduce the number of uninsured drivers on their roads.

So, if you’re looking for ways to reduce the cost of your auto insurance, consider looking into the many discounts your auto insurer can offer you.

Insurance Companies Changing Terms of Auto Insurance Policies to Encourage Customers to Go Green

There is a new trend in the auto insurance industry that involves insurance companies offering their clients better rates as an incentive to reduce their carbon footprints. In the car insurance market, the state of California recently approved an initiative permitting insurers to offer their customers auto insurance policies with adjusted rates, using a system known as pay-as-you-drive. This minimizes the driver’s emissions. Many insurance companies are also offering discounts to those who chose to purchase hybrid vehicles, also minimizing a driver’s effect on the environment when driving.

Why are the insurance companies offering these deals? They seem to be part of a new approach that takes into account the long-term and the big picture. Global warming means more problems for insurers. An increase in catastrophic weather events could be crippling for the companies faced with paying claims for damages property and injured individuals. Severe weather also increases the likelihood of car accidents, along with resulting injuries and property damage. Although incentives to encourage environmentally friendly behavior may be costly for a company in the short-term, if these measures actually do have some impact on consumer behavior and the level of greenhouse gases, it is likely that these auto insurance discounts and reimbursements will be a worthwhile investment in years to come.

It is also possible that auto insurers are offering incentives as a way to appeal to customers concerned with the environment. These auto insurance policyholders might be willing to choose one company over another simply because they perceive them as “greener.” Although it may seem cynical for a company to behave in this manner simply as a marketing ploy, the consequences of these policies still have a potential to benefit every one of us.

It is also possible that the benefits of these auto insurance incentives to insurance companies may have little to do with their environmental component. If consumers actually drive less because this behavior lowers their insurance rates, then auto insurers will certainly benefit from this change. Fewer miles driven means a lower incidence of accidents, which in turn means that the insurance companies have to pay less in costly settlements.

Starting in 2010, a new rule implemented by the National Association of Insurance Commissioners will require insurance companies to detail the risks and consequences of climate change as they affect their business. This information will be available to regulators and investors, helping them to make informed decisions about the future of the industry. It is most likely that the information they report will support the conclusions that they have already reached: climate change will be expensive, and any measures that can lessen its impact will be well worth pursuing.

How Renewing Your Own Headlights Can Save You Money and Increase Safety

October is National Headlight Safety Month. It is also the time when days get shorter and daylight savings time ends (October 31). Shorter days mean longer nights, so you are turning your car’s headlights on earlier. At night your field of vision is drastically reduced. Headlights that are dim or burnt out make it hard, and sometimes impossible, for other drivers to see you. They also make it hard for you to see what is in front of you.
Now is the perfect time to check your headlights and make sure they are working and emitting enough light onto the road.

Headlight bulbs naturally dim over time. Another factor that contributes to dim headlights is the headlight lens. Typically headlight lenses are made out of plastic. Over time, they can become gray and cloudy. Both dim bulbs and cloudy lenses will restrict the amount of light coming from your car’s headlights — and that becomes an auto safety issue.

If your car is more than a couple of years old, checking your headlights should be part of your regular auto safety maintenance routine. To check your headlights, park your car so it is facing a solid surface (one that is taller than your headlights). Your car should be approximately five to six feet back from this surface. Turn on your headlights and look to see the light reflection on the surface. You should see two circles of white light, which are even, and aligned straight. What you should not see is very dim or yellow circles.

If one of your headlights is burnt out, you will need to have it replaced. When replacing a burnt out headlight, it is always a good idea to go ahead and replace both headlights. When one goes out, the other isn’t far behind. You can do it yourself by getting the bulb from an auto parts store or taking your car in to have it replaced.

Next, check your headlight lens (the outer covering of the headlight). You can do this just by simply looking at it. It should be completely clear, not cloudy or gray. You should be able to see your headlight bulb through the lens. If your headlight lens is cloudy or gray, your can replace or restore your headlight lens. You can restore the headlight lens by purchasing a headlight restoration and cleaning kit. These kits can cost as little as $8.99 at an auto parts shop and usually requires going through a few simple steps.

When it comes to the fall and faster fading daylight, it is imperative that you’re car’s headlights are in proper working order. Doing proper auto safety maintenance will ensure that you and your passengers are seen, and can see, on the road.

Dallas Drivers with Poor Credit Pay 35% More for Auto Insurance

If you’re a good driver, you pay lower car insurance rates, right? Wrong. Although many drivers think that the only factor involved in determining their car insurance rates is driving history, there are actually quite a few variables that go into determining car insurance, including your credit score. And that’s what many residents in Texas are finding out.

That’s right, it’s affected your job, loan rates, and even choice of house or apartment, but now your credit score can also have a significant impact on your auto insurance quotes. Although not all auto insurance companies use credit scores to determine car insurance rates, Dallas drivers with less than perfect credit should be checking their car insurance rates against their neighbors’ rates. Why? Because in Dallas auto insurance rates for drivers with bad credit can up to 35 percent more than drivers with good credit. Thirty-three out of the 35 largest auto insurers in Texas charge more for drivers with poor credit. The three largest insurers — State Farm, Allstate, and Farmers — all hike up prices for low scores, according to the Dallas Morning News. If you’re paying high auto insurance premiums in order to avoid paying a lot out of pocket in the event of an accident, you could be coughing up a significant portion of your income to your insurer thanks to your credit score.

Developed as a way to determine if a person is credit worthy, or will pay money back that is owed, the credit score has been used to determine what amount of interest someone looking for a line of credit should be charged. Many have complained that the use of credit scores in the auto insurance agency is unethical since the score has little to do with what causes auto insurance premiums to rise. Instead, auto insurance premiums rise when people have more accidents. This is the reason that you can’t get an insurance policy without first disclosing your driving record.

According to the Dallas Morning News, some Texas groups are banding together to stop the use of credit scores in determining auto insurance rates. However, while the credit score is still being used to hike up prices, there are some options for those with less than perfect credit. Because not all insurers use credit scores to determine auto insurance rates, going to one of these companies is often your best bet. Another option is to cash in on all your other discounts, such as those you receive from being a safe driver or a good student. But most of all, it’s important that you stay insured, no matter how much your car insurance costs, since going uninsured can mean major fines.