Insurelane Insurance Blog

If you’re accident prone, you might want to stay away from Roseville, California, as the city is charging fees to non-resident drivers who use its emergency services or cause road accidents.

It seems like such a good idea that the city of Sacramento could start doing the same thing when city council meets in mid-September according to The Sacramento Bee. Sacramento is considering fees from $435 for a fire department response up to $2,275 hazardous-waste leaks, helicopter transportation, and driver extrication.

The fees would be aimed at anybody who isn’t a resident of the city who is involved in a crash or some other costly incident in city limits. The money would then be used to upkeep and improve city services.

While some people might balk at the idea, especially those from out of town, it’s apparently legal in California to charge people the full cost of emergency responses and a few cities are jumping on the bandwagon. It became law in 1987 as many districts were struggling with costs.

The bills for the accident usually get sent to the person’s insurance company, but many of their policies don't cover the fees for emergency services. For instance, if an out-of -town driver causes an accident where somebody needs to be extricated from a vehicle, the recovery fee of about $2,000 will be filed by the fire department with the driver who caused the accident’s insurance company.

In Roseville, the fire department reported that it recovered about $30,000 of its costs. However, some nearby communities, like Rancho Cordova, don’t like the practice as it affects visitors and those people who commute to Roseville to work.

Some local residents and politicians say it’s a fair practice though, as city taxpayers shouldn’t have to foot the bill for the negligent acts of individuals who cause accidents.

The car-buying public may want to think twice about buying a new hybrid-electric vehicle after reading the Mitchell International's Industry Trends Report. According to The Car Connection, hybrid cars such as the popular Toyota Prius costs on average $182 more to fix than regular vehicles if they’re involved in an accident.

Now insurance companies have started raising insurance rates for the higher repair costs. In fact the insurance costs for hybrid vehicles are predicted to go up at a quicker rate than overall insurance premiums.

It’s estimated that hybrid sales make up about three percent car sales in America these days and a more diverse group of people are now buying them. When hybrids first hit the streets, most owners drove them pretty conservatively and didn’t get involved in many accidents. This of course meant very few insurance claims which resulted in relatively low premiums.

However, the cars are now more popular and there are quite a few more of them on the road as more and more manufacturers are producing them.

And the main reason they cost more to fix is that there are less used hybrid car parts on the market. So when a vehicle has to be repaired, there’s a good chance brand new parts are used to replace damaged parts. When new parts are needed owners generally get them from a dealer instead of a regular repair shop and results in higher labor costs.

While hybrids may be good for the environment and get pretty good mileage, you may want to figure in the cost of insurance and repairs when budgeting for a new car.

The number of uninsured motorists in Texas has been on the decline for the past two years, ever since the launching of the TexasSure Auto Insurance Verification program.

According to Claims Journal, the program was launched two years ago, and has been available to all law enforcement and 254 county tax assessor-collectors since June 2008. Since that time, the database showed a statewide decrease in the number of registered vehicles that could not be matched to an insurance policy. Since June of 2008 the number of uninsured vehicles has decreased from around 24 percent to 21 percent.

The database provides law enforcement with tools to determine whether or not a registered vehicle in Texas has legitimate automobile insurance and is able to match over 99 percent of all policies to a vehicle. TexasSure regularly checks up on those insured customers who cannot be matched with a policy.

TexasSure is also able to find the registered vehicles that cannot be matched, thus determining which vehicles are uninsured vehicles. Beginning mid-June of 2010, TexasSure officials began sending letters via mail to these motorists who appear to be uninsured, advising them of their status. Motorists who receive this letter are given the opportunity to update their information on file and provide any information that may help TexasSure to resolve the issue. They may respond via mail, website or call an agent.

Several reasons exist for having a registered vehicle that is not also insured. Some include falling out of service due to extended repair, illness, extended military service or travel, or having a vehicle whose class does not require auto insurance.

Motorists who do not have valid insurance for a registered vehicle are subject to fines up to $350, plus court costs and may be assessed additional fees. Repeat offenders may lose their license for up to two years.

Recently in California, Jay Xi Chen and his sister, Tracy Chen Chen were arrested for felony auto insurance fraud charges. The Chens filed alleged false auto insurance claims for Jay’s Nissan GT-R. Jay Xi Chen is charged with six counts of fraud and his sister is being charged with one.

On March 16 2009, Jay Xi Chen called his auto insurance company and claimed that his sister was involved in an accident on Interstate 10. Tracy Chen Chen went along with the story but then Jay withdrew his claim and said that he would pay for the repairs. On June 2, 2009, Jay filed another claim for the same car and said that he crashed his automobile while on Highway 60. However, his story did not match the ICC Collision Center’s report that Jay’s car had been in its shop since March.

To top if off, auto insurance fraud teams found a YouTube video of a street race resulting with a crash of Jay’s Nissan GT-R. The damages filed by Jay Xi Chen resemble the damage to the car on the YouTube video.

According to Claims Journal, each count could result in up to five years in prison and/or $10,000 in fines.

Auto insurance fraud and staged auto crashes have been increasing across the nation. In response to these increases in criminal activity, many states have implemented fraud investigation teams. The Inland Empire Organized Automobile Fraud Interdiction Team investigated the fraud case with the California Highway Patrol and Chen’s auto insurance company.

It took the investigation teams six months to gather all of the information needed for the Chen’s case; hopefully, prosecuting incidents like this will result in fewer numbers of insurance fraud cases and deter criminals.

Technorati Tags: auto insurance youtube

Car insurers always expect an increase in the number of claims filed the week following the Super Bowl. The increase can be attributed to alcohol consumption and more notably, pizza.

Pizzerias will see as much as a 50 percent increase in total sales resulting in an increased need for pizza delivery. With the greater amount of pizza being delivered, there is a greater chance of accidents.

According to Business Week, pizza delivery is the ninth-most dangerous work sector. In 2008 there were 22.8 fatalities out of every 100,000 full-time workers which is excluding part-time delivery workers.

Many auto insurers will not insure pizza delivery drivers under personal auto insurance policies. Pizzerias can purchase a commercial policy to cover the drivers with some auto insurers but very few will cover the occupation.

Pizza deliverers not only have to make fast deliveries but also face a couple other elements, weather and booze. When the weather is bad, people are more likely to call for delivery. Also many people attend Super Bowl parties and do not watch what they drink. About 50 percent of fatalities on Super Bowl Sunday in 2008 involved alcohol which sends a chilling warning to any pizza deliverer to be watchful.

Super Bowl Sunday is a joyous occasion for any football fan but many need to be careful and reminded to make sure they have enough insurance coverage in case of an accident.

Technorati Tags: super bowl auto insurance

A recent Auto Insurance Report shows that New Jersey auto insurance companies have been losing money since 2003. Auto insurance companies across the country have been stuck in aggressive price wars over the past few years which has led to rates that are too low to sustain a solvent business. This report suggests that New Jersey drivers may soon see higher auto insurance rates.

The auto insurance industry is going to make price changes across the country to balance their profits, and will likely increase the amount of money drivers spend on insurance. Many experts blame the poor economy for the low profit margins, and have seen drivers purchasing cheaper policies and investing less to save money.

Also the reports say that increases in health care spending have increased costs for auto insurance companies and were causing these companies to spend more on health care then they have in the past. However, the New Jersey Supreme Court just passed an insurer’s bid to pay lower medical bills for personal injury costs, which will help keep insurers prices from increasing too high.

Another reason coverage is so expensive in New Jersey, insurance experts say, is because people purchase more expensive cars and have more financial assets than in other states.

Technorati Tags: new jersey auto insurance

A Louisiana state Senate Committee recently made some key changes on last year’s auto insurance bill that would have increased the liability limits for drivers.

The old version of the bill increased liability for the injury or death of one person to $25,000, up to $50,000 for multiple people, and $25,000 for property damage.

But that version was vetoed by former Governor Kathleen Blanco, who argued it would increase rates for Louisiana residents already struggling and recovering from Hurricane Katrina, reported The Times-Picayune.

State Representative Erich Ponti re-introduced the bill today with higher liability limits than current law, but a bit lower than the vetoed measure.

The new liability requirements are $15,000 for the injury or death of one person, $30,000 for multiple people, and $25,000 for property damage.

State Senator Troy Hebert also helped amend the bill — delaying the effective date of the law to 2010 to give time for insurers and residents to adjust.

State legislators are unsure whether or not Governor Bobby Jindal supports the new bill.

Technorati Tags: Louisiana auto insurance liability legislation

Georgia Governor Sonny Perdue recently signed a bill that will give drivers more underinsured and uninsured motorist coverage.

Under current Georgia law, all drivers must have a minimum amount of auto insurance — $25,000 for the medical bills of another driver, $50,000 for the medical bills of two or more drivers, and $25,000 for property damage, reported the Atlanta Journal-Constitution.

But not every driver has auto insurance, even though it’s required by state law.

If you’re in an accident and the at-fault driver has no insurance or doesn’t have enough insurance, you’ll be stuck with the bills — unless you sue.

The new law will let you dodge both bullets by allowing you to use your own underinsured/uninsured motorist protection in such situations.

Your plan would make up any difference that the at-fault driver or their insurance can’t cover until your policy limits kick in, wrote the Journal-Constitution article.

The law goes into effect on January 1, 2009.

To get the “stacked” coverage, you’ll have to wait until your policy needs to be renewed. If you already have underinsured/uninsured coverage, you’ll automatically get the stacked benefits upon renewal. You can go without the coverage if you choose.

Whether or not the law will cause rates to go up is still unknown, wrote the article. Insurance companies are free to raise or maintain rates as they choose.

Technorati Tags: Georgia auto insurance underinsured/uninsured motorist coverage legislation

The Alabama Senate and House of Representatives approved a bill earlier this year which will raise the minimum liability limits for auto insurance, which haven’t been increased in over 24 years. Now, the bill is going to Governor Bob Riley’s desk for his signature.

Under the measure, drivers must purchase auto insurance that covers at least $25,000 for single injury or death, $50,000 for multiple injuries or deaths, and $25,000 for property damage, reported Insurance Journal.

The new amounts increased liability limits $5,000, $10,000, and $15,000, respectively. The bill also ups the minimum level of uninsured motorist coverage, which is optional according to Alabama state law.

Few drivers will be actually affected by these changes because most already have liability coverage higher than the minimum.

For those who will need to get more coverage, rates will go up $20 to $30 a year. Rates for uninsured motorist coverage are expected to increase around $13.

The measure passed easily in both the state House and Senate, and Governor Riley has said he will sign it into law.

Once signed, drivers and insurance companies will have three months before the new limits go into effect. Governor Riley had previously vetoed a similar bill that would implement the limits immediately, arguing consumers and insurers needed time to adjust.

Technorati Tags: Alabama auto insurance legislation liability uninsured motorist coverage

Democrats in the Michigan House of Representatives recently introduced a bill that would put more heavy restrictions on auto insurance companies to ease rates for state drivers.

The first provision of the bill would not allow companies to set auto insurance rates based on credit score, reported the Associated Press and Forbes New York. State lawmakers argue that rates should be set solely on driving record.

The new measure would also give more power to the state’s insurance commissioner. Any rate increases would have to be approved. If rates were determined to be unfair, insurers would be forced to refund their premiums.

“We need to rewrite Michigan [auto insurance] law so it protects consumers,” said state Representative Bettie Cook Scott.

But insurance companies in the state oppose the bill. They say the provisions could actually hurt consumers.

Insurers point out that good credit scores offer more than two-thirds of the state’s policyholders nice discounts.

Because the legislation also makes it easier to sue insurance companies, the costs for an increased number of lawsuits would be eventually passed to the policyholders.

Technorati Tags: auto insurance Michigan legislation reducing rates

Automobiles have been around for a long time — the first car was thought to have been built in 1672. But the development of cars didn’t happen until around the 1880s.

After more cars started showing up on the roads, insurance policies followed. And today is the anniversary of the very first auto insurance policy.

On February 27, 1898, the first auto insurance policy was sold by Traveler’s Insurance Company. The policy was purchased by a doctor from Buffalo, New York for $5,000 in liability coverage, reported the Insurance Journal.

The doctor paid $12.25 for his policy. In current dollars it would be around $316.25, well below today’s average cost of auto insurance — over $820 a year.

Technorati Tags: auto insurance anniversary

Last year, Massachusetts decided to rethink their auto insurance regulations. The Bay State was the only state in the country that didn’t allow insurance companies to set their own rates. State regulators and the insurance commissioner set the prices.

But starting April 1, the state will hand over the responsibility of setting rates to the insurance companies, reported the Daily News Tribune.

The change is expected to bring down auto insurance rates in Massachusetts an average of 7.8 percent.

The state’s auto insurers are readying for the change by offering lower rates for drivers and new benefits. Companies such as Liberty Mutual and Hanover Insurance Group are trying to attract new customers with accident forgiveness programs for good drivers and lower deductibles.

Technorati Tags: Massachusetts auto insurance

A committee in Michigan’s House of Representatives approved a bill yesterday that would affect auto insurance for any driver over the age of 65, reported the Detroit Free Press.

Michigan is the only state in the country where all drivers must have full and unlimited medical coverage — also called Personal Injury Protection (PIP). The Wolverine State also has no-fault auto insurance, where all drivers are covered regardless of who is at fault in an accident.

The measure approved by the House committee would allow seniors to opt out of the unlimited medical coverage.

If passed, seniors could save as much as 40 percent on their auto insurance premiums, according to a study conducted by State Farm.

“People eligible for Medicare should not be required to buy additional medical insurance. That’s like requiring all people covered by Medicare to buy a full health care policy from Blue Cross,” said a lobbyist for auto insurer, AAA Michigan.

Even though Americans over 65 years old are eligible for Medicare, some lawmakers aren’t sure if Medicare will provide coverage for injuries in auto accidents. It’s not certain if coverage would be denied because of Michigan’s unlimited medical care law.

They suggested waiting to find out what medical costs Medicare will cover.

Proponents of no-fault auto insurance and unlimited medical care contend the laws protect drivers from insurance companies denying coverage. But they weren’t fully opposed to allowing seniors to opt out of unlimited medical coverage.

The bill will soon be considered by the full House.

Technorati Tags: Michigan auto insurance seniors no-fault unlimited medical coverage

State Farm Mutual Insurance Company recently announced they will reduce auto insurance rates for drivers living in West Virginia. The state’s largest auto insurer said they will cut rates an average of 4.9 percent.

Since 2005, State Farm has reduced rates by a total of 17.6 percent, reported the Charleston Daily Mail. That’s an estimated $58 million in savings for policyholders.

State Farm provides auto insurance for roughly 25 percent of drivers in West Virginia — that’s approximately 370,000 cars in the state.

But not every driver gets an equal discount.

“Overall premium changes for individual motorists will vary depending on factors such as the coverage they carry, the discounts for which they qualify, where they live, the kind of vehicle insured, who drives it and how much it is driven,” explained the auto insurer.

The rate reductions have been a result of the insurance reforms passed by state lawmakers and signed by Governor Joe Manchin.

Discounts will go into effect on March 17.

Technorati Tags: West Virginia auto insurance rate reduction

Massachusetts is ready to start their new auto insurance system in hopes of bringing more big name auto insurance companies into the state, and driving rates down. In the first step, private insurance companies will be allowed to set their own rates for any policy with a renewal date past April 1, 2008. The state has been setting auto insurance prices since 1977.

As result, insurance companies will reduce rates by 10 percent or more, affecting 1.2 million Massachusetts’ drivers, reported the Newburyport News.

Insurance companies will also offer additional rate reductions for good driving behavior and good grades for students. The best drivers will receive the highest savings. Residents can also save more by driving less than 10,000 miles a year and using public transportation.

Another key part of the system will cap rate increases. Rates for drivers with unfavorable driving records won’t go up any more than 10 percent.

But the insurance industry is going to have to make sure consumers are prepared for the system overhaul.

“This is going to be a learning process for everyone,” said Don Beaulieu from Beaulieu Insurance. He pointed out that the industry will have to do their part in explaining the new system’s processes.

“The insurance companies are going to have to lay out a plan to make their businesses look more competitive,” added Beaulieu.

So far, state officials think the new auto insurance system will be a success.

“I’m seeing it not only in the rates but in the flurry of activity to provide additional [auto insurance] products. And companies are trying to make sure they try to retain customers,” said Massachusetts Insurance Commissioner Nonnie Burnes.

Technorati Tags: Massachusetts auto insurance auto insurance system overhaul