Insurelane Insurance Blog

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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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A study conducted by the Insurance Research Council in 2006 found that approximately 17% of Michigan’s drivers are on the road without insurance. But the state requires that all drivers have no-fault auto insurance — giving them coverage for personal injury, property damage, and legal defense costs if sued.

Some state lawmakers say there are too many uninsured drivers, and it’s putting many at risk. State Representatives Bert Johnson and Mike Nofs have introduced a bill that would allow police to identify drivers who have no insurance, reported the County Press.

The system of auto insurance verification would be paperless and check coverage status instantly.

One co-sponsor of the bill, State Representative Rick Jones, argued that it’s hard for police to verify if drivers have active insurance. They only look at the driver’s proof-of-insurance card. But drivers could show officers an expired insurance card.

“It is a big problem, because it’s fairly easy to get away with. Some people are simply irresponsible,” said Rep. Jones.

Police officers could call the insurance company to make sure the driver’s policy is in effect, but it takes too much time, said Michigan State Police Sergeant Matt Bolger.

Critics of the bill contend that verification systems haven’t been proven to be effective. Executive director of the Insurance Institute of Michigan, Peter Kuhnmuench, pointed out that no other state has such a system.

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Auto insurance companies such as Safeco, AIG, and American Family have started to offer programs to make it easy for parents to monitor their teens’ driving — with in-car video cameras and global positioning (GPS) trackers.

Safeco’s program, Teensurance, offers participating policyholders a discount of up to 15%. Auto insurers providing similar programs are also likely to discount rates, reported the Columbus Dispatch.

Such programs have caught on to help reduce traffic accidents among teens. Car-related accidents are the leading cause of teens’ deaths. Teens have a fatality rate four times higher than drivers 25 to 69 years old.

“It’s a unique opportunity for [insurers] to help change [teens’] behavior,” said Craig Weber, senior analyst for the research and consulting firm Celent.

Teen Safe Driver, the program from American Family, installs motion sensors to detect hard braking, swerving, collisions, and fast acceleration. The cameras will record video and audio of the road and teen driver, which will be sent to an analyst center. The center will grade risk and also provide parents with comments and driving tips for their teens.

“I’d rather be able to talk to [my teen] about an issue before there’s an accident,” said one participating parent.

The cost of participating in these programs can range from $14.99 to $29.99 a month, depending on the insurance company.

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Florida Governor Charlie Crist signed a bill into law on Thursday renewing the no-fault auto insurance in the state. As of January 1, 2008, all drivers in Florida will be again required to have $10,000 in personal injury protection (PIP).

Before the no-fault auto insurance law expired on October 1, it had been in effect for almost thirty years. Some argued that the law should be allowed to die, predicting that auto insurance rates would go down as a result. Insurance companies have also said that the no-fault law made it too easy to file fraudulent claims, and supported its expiration.

On the other hand, hospitals and other health care providers contend without no-fault insurance, there will be more patients injured in accidents who have no insurance.

The bill signed by Crist was somewhat of a compromise. It renewed the no-fault law with a promise to tighten the rules on making claims.

“By taking action on Florida’s no-fault law and personal injury protection requirements, we ensure that Florida’s drivers continue to be protected while also reducing the possibility of fraud,” said Governor Crist.

Between now and January 1, drivers will not be required to have PIP coverage. But if drivers who do not have PIP can be taken to court to determine if they are responsible for paying the damages in a car accident.

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The personal injury protection (PIP) and no-fault auto insurance law expired in Florida on Monday. Lawmakers in both Houses of State Congress attempted to work quickly on legislation that would have restarted the no-fault law. But a last-minute amendment stalled the bill that was very close to passing.

House Republicans added an amendment to the bill that would have capped attorneys’ fees in cases against insurance companies. It also banned lawyers from doubling or tripling fees — called multipliers — in cases involving insurance claims.

The amendment, which is supported by insurance companies, would help prevent health care providers from filing fraudulent claims. But opponents of the amendment contend it would give insurance companies an unfair advantage over drivers who can’t afford a lawyer’s hourly fees, reported the Orlando Sentinel.

Because the legislation and the no-fault law are both at a stand-still, Florida drivers will not be able to determine whether they are sufficiently covered with their old policies or must buy new coverage. The future of the no-fault law in Florida is still unknown, and may not be for a few months.

“The citizens need to be calling their agents and finding out what they need to be doing to protect themselves over the next four months,” said state Chief Financial Officer, Alex Sink.

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