Answer the question, Is your car insurance as cheap as it looks, before you renew the same old policy you’ve had for years. Compare online insurance companies before you renew with your old one.

Nobody looks forward to choosing their car insurance. Many people stay with the same company year on year to avoid endless phone calls or trawling quote comparison sites at renewal. Nowadays, however, many companies offer significant introductory and online discounts which only apply for the first year. What this means for the consumer is that shopping around makes good financial sense. But while it can be extremely tempting to go for a cheap policy, it’s wise to know exactly what you’re buying into.

What’s Missing?

Sometimes one company will offer Fully Comprehensive coverage for the same rates as another’s Third Party insurance. This should ring alarm bells, it’s possible it’s cheaper for a reason.

A car insurance policy booklet is divided into sections. The level of cover you have purchased will include some or all of these. Third Party Only is the legal minimum and included in all policies. Mandatory since 1930, it covers you for damage to another’s person or property. Then Fire and Theft is added to that, followed by damage to your own car – Fully Comprehensive includes all three.

There are things we automatically assume to be part of a Comprehensive policy – European coverage, windscreen coverage, a courtesy car, coverage for driving other cars – but not necessarily so. Policies may have been stripped to the bare bones in order to appear cheap. The missing features may then be offered as chargeable extras, so take care.

If you are considering driving abroad, check what level of coverage you will actually have while out of the country. It might be lower than your normal level of coverage and you may only be allowed a limited time abroad. To increase the time or level of coverage would then be chargeable.

Auto Insurance Excesses

So you have a cheap policy that seems to give all the coveage you need. The next thing to check are the excesses. These are what you pay in the event of a claim, such as deductibles. Sometimes they can be high in order to keep the premiums down and there are compulsory excesses on top for categories of driver who the insurer perceives to be a higher risk. This may include young drivers, foreign drivers or those with points on their license – check which apply to you.

Extra Charges

Whether we want to believe it or not, it does cost an insurer to set up or cancel a policy, and to process your claims. As businesses, they will attempt to recoup the costs from the customer, probably in the form of cancellation fees or charges for amending your policy. If the premium is very low these charges may be higher to compensate. Some cancellation fees are even levied within the mandatory 14 day cooling off period, so be aware of what you’re letting yourself in for.

Sadly the process of renewing your insurance remains a long, drawn out process and even higher premiums may not include everything so it’s worth devising a checklist to use when you shop. Go in armed with your own questions and reduce your chances of unpleasant surprises later in the year.

Source

WASHINGTON–(BUSINESS WIRE)–GEICO has announced that it is introducing a new auto insurance rate plan that is expected to deliver insurance savings to many Michigan drivers.

“GEICO is pleased to release a new rating plan that will offer the opportunity for millions of Michigan drivers to compare and save on their auto insurance premiums,” said Mary Zarcone, regional vice president of GEICO’s Midwest operations. “As one of the largest and fastest growing auto insurance companies in the Unites States, GEICO stands ready to meet the insurance needs of the good people of Michigan.”

Zarcone continued, “In addition, we are introducing a number of new discounts with the plan that rewards good drivers. Simply go to www.geico.com to obtain a free rate quote.”

The changes will go into effect on July 3 for new policyholders and Oct. 1 for renewal policies.

Overall premium changes for individual motorists will vary based upon factors such as coverages purchased, geographic area, type of vehicle, risk characteristics, and other discounts for which they qualify.

GEICO (Government Employees Insurance Company) is the fourth-largest private passenger auto insurer in the United States. It provides auto insurance coverage for more than 8 million policyholders and insures more than 13 million vehicles. In addition to auto insurance, GEICO offers customers insurance products for their motorcycles, all-terrain vehicles (ATV’s), boats, homes, apartments and mobile homes. Personal umbrella protection and life insurance are also available. As a member of the Berkshire Hathaway group of companies, GEICO is rated A++ for financial stability by A.M. Best Company and ranks at the top of several national customer satisfaction surveys. For more information, go to http://www.geico.com.

Contact:

GEICO Communications
301-986-3271

Source: GEICO

SIOUX FALLS, S.D. – An insurance study has once again found that Sioux Falls has the safest drivers in the nation, marking the third straight year that South Dakota’s largest city has topped the list.

Researchers with Allstate Insurance Co. analyzed two years of internal crash data to calculate the chance that drivers in 193 of the nation’s most populated cities would be involved in an accident.

Allstate, which claims a 12 percent market share of the nation’s auto insurance policies, found that Sioux Falls motorists average an accident once every 14.6 years — 31.6 percent better than the national rate of one every 10 years.

The city’s rate improved slightly from last year’s average of one accident every 13.7 years.

Officials in Sioux Falls again attributed the ranking to strong traffic engineering and driver education programs.

Following Sioux Falls were Fort Collins, Colo.; Chattanooga, Tenn.; Sterling Heights, Mich.; Warren, Mich.; Knoxville, Tenn.; Grand Rapids, Mich.; Cedar Rapids, Iowa; Lexington, Ky.; and Detroit.

Motorists in Washington, D.C., were most at risk, according to the study, averaging an accident once every 5.4 years.

Drivers in Detroit, ranked 11th in population, are likely to experience a crash once every 12.4 years, the best among cities with between 500,000 and 1 million people. Phoenix ranks the highest for safety among cities with more than 1 million people with a collision likely once every 9.8 years.

Massachusetts’ cities were not included as the company does not write policies in the state.

Allstate planned to give away free gas at a Sioux Falls filling station Tuesday to reward residents for their ranking.

Researchers studied about 2 million damage claims defined as any collision resulting in property damage filed between January 2005 and December 2006. A weighted average of the two-year numbers determined the annual percentages.

Allstate: http://www.allstate.com/

SACRAMENTO, Calif. — Will Californians lie to save money?

Apparently.

New legislation takes aim at an honor system, of sorts, that allows motorists to lowball their annual mileage and save on their car insurance premiums. Being honest, it turns out, can hurt — financially.

“I think it’s ingrained, given the structure of the current system, to lie,” said Michael Gunning of the Personal Insurance Federation of California, whose members write about half the state’s auto-insurance policies.

Assemblyman Jared Huffman, D-San Rafael, proposed the new measure, Assembly Bill 2800, to permit insurers to offer discounts to drivers who volunteer to have mileage verified.

Huffman said it makes no sense to reward dishonesty or lowballing, while offering no incentive to drive less.

“Ask yourself: What would most people do, given the opportunity to have a lower insurance rate by estimating lower miles than they actually drive?” Huffman said.

“I think most people probably do skimp a little bit,” said Derek Givens, 28, of Sacramento.

No current statistics exist, but a state study of 1998 mileage estimates found that 56 percent of motorists underestimated their travel — and nearly half of those lowballers erred by more than 6,000 miles.

The proposed new voluntary program, though seemingly narrow in scope, teams environmental groups with insurance companies as part of a much broader, long-range strategy to cut miles driven and lower greenhouse-gas emissions, a key state goal.

Ultimately, passage of the bill could set the stage for battles over whether the state should allow insurers to require high-tech devices for tracking mileage and whether to encourage pay-as-you-go policies that charge drivers for each mile traveled.

Huffman said his bill does not address such issues and that state Insurance Commissioner Steve Poizner has wide-ranging latitude to represent consumer interests. But vehicles are pivotal in the state’s fight against global warming, he said.

“We need to create incentives to drive less,” Huffman said.

Californians own 26 million cars and trucks driven more than 330 billion miles a year, according to the state Air Resources Board.

“The threat that California faces from climate change is real, and a big part of that is transportation, which is something we all have control over in our day-to-day lives,” said Lauren Navarro of the Environmental Defense Fund.

Opponents counter that the push for the bill exaggerates insurers’ woes and piggybacks onto environmental activism to achieve corporate gain.

“I think there’s always sort of a credibility gap between the industry’s claims and its actual performance,” said Richard Holober of the Consumer Federation of California.

California regulations specifically ban insurers from requiring use of technological devices to record mileage. But insurance firms have the right to require odometer readings when a policy is issued, and when it’s renewed every six months or year, said Darrel Ng of the Department of Insurance.

Gunning disagreed that the regulations give firms clear authority.

“In fact, several times we asked for mileage-verification tools, and the (insurance department) refused because it would be too ‘burdensome’ on the customer,” Gunning’s group said in a letter supporting the bill.

Besides confusion over legal limits, insurers say verification is not always practical because many policies are sold online, not every firm has ample staffing to handle a data crush, and stiff competition discourages imposition of cumbersome policies that might upset customers.

State Farm, AAA and Allstate insurance companies said they depend on policyholders, not odometers, when calculating mileage.

“We accept the customers’ estimate,” said Cynthia Harris of AAA. “So the bottom line is the customer has the final say.”

Huffman’s bill awaits action in the Senate after passing the Assembly, 72-2. Gov. Arnold Schwarzenegger has taken no position.

Opponents contend the legislation is a thinly veiled push toward allowing insurance companies to require use of satellite technology — known as GPS — that can track not only how far you drive, but where and how aggressively.

“That’s a huge invasion of privacy,” Holober said. “It’s nobody’s business.”

Huffman called such claims a “phantom issue.”

“The notion that this will require installation of ’spyware’ on your car is nonsensical,” he said, adding that the bill proposes a voluntary program in which the state, not insurers, would determine verification methods.

(E-mail Jim Sanders at jsanders(at)sacbee.com.)