An earlier article mentioned the GMAC Insurance National Drivers Test (take it yourself). Now GMAC Insurance and the Insurance Institute of Highway Safety have come up with the 5 most common mistakes drivers make and some tips on how to avoid them.
It is amazing to see the difference in prices for auto insurance. This study by Runzheimer shows that rates can vary by more than $5,000 between cities for an average car and driver. Runzheimer International is a Wisconsin-based vehicle costing and management consulting firm.
At $5,162 per year for insurance coverage for a mid-size sedan driven within a 50-mile radius of the city, Detroit-areas drivers pay approximately $4,400 more a year than similar drivers in Roanoke, Virginia who pay only $758 for the same coverage. These rates are based on both male and female drivers over a minimum age with clean driving records and include comprehensive, collision, bodily injury, property damage, and uninsured motorist coverage.
Philadelphia and Newark also represent expensive locations for insurance coverage at $4,142 and $3,482, respectively. Los Angeles at $3,225 and New York City at $3,127, round out the Five Most Expensive Cities list (See attached table).
Other areas, in addition to Roanoke, are insurance bargains. The same driver, driving the same vehicle in Wapakoneta, Ohio pays only $871 for this all-inclusive coverage. In Chattanooga, Tennessee, vehicle owners pay $911; in Green Bay, Wisconsin, $948; and in Raleigh, North Carolina, $949.
Makes me real glad to live in rural Washington state! I don’t have the numbers for here but would guess them to be in the the under $1,000 range.
Looks like Allstate got nailed by the California Insurance Commissioner. Credit scoring is a hot topic in the insurance world. An explanation of why insurance companies do credit scoring would make an intersting post. I will tell you that it is not because they are afraid of not getting paid - the only thing the insurance company is afraid of is paying for an accident.
According to Insurance Journal:
Allstate Insurance Company will pay $30 million to California auto and homeowner policyholders that were overcharged, according to the Los Angeles Times. Approximately 250,000 customers will receive refunds, while the company also agreed to pay a California Department of Insurance fine of $4 million.
Allstate has not admitted liability. Insurance Commissioner John Garamendi said in a statement that Allstate used a form of credit scoring and did not give appropriate discounts, thus violating California insurance laws. The company also reportedly did not charge the lowest premiums that consumers qualified for in auto and homeowners insurance.
Some customers will receive a refund check, and others will receive credit on future bills, Garamendi said.
It does not ‘pay’ to commit fraud:
N.J. Division of Criminal Justice Director Vaughn L. McKoy announced that the division’s Office of Insurance Fraud Prosecutor recently charged an Orange, N.J. man with insurance fraud for falsifying medical records in order to obtain more than $1,000 in Personal Injury Protection payments.
If convicted on all charges, Smithson faces up to 13 years in state prison and a fine of up to $40,000. Smithson also could face civil insurance-fraud fines. Smithson would have to appear in Essex County Superior Court for arraignment and bail because of the indictment.
How did he attempt to commit the fraud? Well, as an example, it appears he got a receipt for $1 from the local hospital towards his bill after the accident. Then he modified the receipt to read $1001.00 and submitted it to his insurance company.
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