Cheapest Auto Insurance Online

Okay. I admit it. I’ll stand in line for the latest Harry Potter book. You can probably convince me that I “need” the latest Dior volumizing mascara and yes, I have eaten turtle cheesecake for supper before. I have several guilty pleasures. Buying auto insurance is not one of them, but it’s a necessity. Read on to learn why, in addition to being a legal stipulation, auto insurance is important to you and your assets.

First things first – While penalties vary state to state, you can guarantee that driving without coverage will take some clank out of your bank. Uninsured drivers can face a myriad of punishments for merely being stopped and not being able to prove coverage. This fact alone should be enough to convince you to start researching reasonable insurance coverages for your vehicle.

Not persuasive enough? Consider your possible liability in the event of an accident…

Your vehicle collides with Mrs. Baker’s vehicle. Mrs. Baker is a fourth grade teacher at the local elementary school and is now facing $80,000 in medical bills, $65,000 in lost wages and is requesting $200,000 for pain and suffering. That’s a $345,000 claim that, unless you have adequate coverage for, you will be pulling out of your pocket. Certainly in this case, as the too familiar adage wisely states, it’s better to be safe than sorry.

So, you know you need auto insurance. While it’s not sinfully delicious or nearly as enjoyable as turtle cheesecake, lack of adequate coverage will definitely leave you with a bellyache in the event of an automobile accident. It is possible to find insurance you can afford.

Remember! Your car insurance rate is based on your insurance risk assessment. If an insurance company determines you are a high-risk driver, your monthly cost will be higher than that of the average driver. You CAN remedy this! Let’s take a look at a few things you can do to reduce your auto insurance risk which, in turn, could lessen your auto insurance cost…

1) Purchase home/renter’s insurance from the same carrier as your auto insurance. Some insurance companies offer multi-policy discounts.

2) Always obey traffic laws, specifically the speed limit. Insurance companies take note of your driving record. More speeding tickets = higher risk driver = increased auto insurance cost.

3) Study hard. Insurance companies often reward students with good grades with a student discount.

4) Purchase a vehicle that receives notability for low damageability and increased passenger safety.

5) When given the option, purchase additional safety features for your vehicle. (Air bags, antilock brakes, etc.)

6) Take a driver safety course. A defensive driving class could possibly reduce your insurance rate. If not, it would at least make you more aware of the importance of being a defensive driver.

Other things to keep in mind…

1) To the insurance company, plain and simple, you are a set of risks. Anything you can do to decrease your “risk factor” might affect your cost of coverage.
2) Always ask for discounts. Many insurance companies offer deals for safe drivers. If you’re considered less of a risk, they’ll likely reward you.
3) Always comparison shop. You can always find a bargain if you know where to look. Insurance is such a commodity. Comparison sites like http://www.hometownquotes.com can help you shop for affordable insurance.

You can always eat too much cheesecake. You may get tired of Harry, Hermione and Ron. And that tube of Dior mascara will eventually get clumpy. Your auto insurance, however, is one purchase that you should never regret or feel guilty about. It will only cushion you in the end. Are you covered?

By Krista M. Farmer

Why not get free online auto insurance quotes and make good savings now!

Insurance lobby raises concerns about Cat Fund’s full claims-paying capacity

Hurricane season may be behind us starting Sunday, but the insurance lobby is still raising red flags about Florida’s ability to cover damages.

Florida Insurance Council, a nonprofit industry lobbying group, continues to point to the Florida Hurricane Catastrophe Fund’s reliance on bonds to pay for damages as a $10 billion to $15 billion hole in the funding net.

”As it stands now, the Florida Hurricane Catastrophe Fund (Cat Fund) … remains unable to meet its full financial obligations,” according to a statement FIC released just prior to the end of hurricane season Sunday.

The Cat Funds current obligation is about $28 billion, most of which is tied to bonds. The State Board of Administration estimated the fund has a $10 billion to $15 billion bonding capacity shortfall. The Florida Senate Banking and Insurance Committee recently released an issue brief raising the possibility of seeking alternative funding.

“It does seem to be pretty clear that the big property and casualty issue, at least one of the big ones, is going to be the Cat Fund,” said FIC spokesman Sam Miller, about next year’s legislative session.

The Florida Legislature will have to, at a minimum, consider reverting to a more realistic exposure of $16.5 billion sooner than the end of the 2009 hurricane season, the current reversion date.

The move would mean rate increases across the board, which would be painful and necessary, Miller said.

“Even if the problems in the financial markets were to clear up overnight and the Cat Fund was to bond to its full capacity, all Florida taxpayers – those affected by a hurricane and those in areas unaffected by a storm - would be at risk of huge tax increases to pay off those bonds,” according to the FIC statement.

Gary Reshefsky, a principle at Coral Gables-based MDW Insurance Group, said insurance rates are likely to go up and capacity is likely to go down next year due in part to the hurricane that decimated Galveston, Texas. Companies that serve Florida have national footprints and paid out more than they took in to cover damages.

“Right now it’s a big hypothetical - we can always issue bonds to do it [cover damages],” he said. “But you don’t know what the bonding market is going to be like in the future. And it’s not an issue that is unique to the insurance industry.”

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California Commissioner Applauds Insurance Education at Cal State Fullerton

"You are the current and future business leaders of the state of California," California Insurance Commissioner Steve Poizner told an audience at California State University in Fullerton on Oct. 17, 2008. In his second visit to the University, Poizner expressed his support insurance education.

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The choice of the commissioner as a keynote speaker was part of Dean Anil K. Puri's effort to highlight the success of the insurance program at Cal State Fullerton and to focus on the insurance industry as a career choice for university graduates. Poizner, along with Congresswoman Loretta Sanchez and U.S. Congressman Ed Royce, were present for the dedication of the Steven G. Mihaylo Hall, new home of the Mihaylo College of Business and Economics. The school's Center of Insurance Studies has launched a new Insurance Marketing Entrepreneur Program, which is aimed at educating a new generation of agents and brokers for the 21st century.

During his address, Poizner touched on concerns regarding AIG, promising listeners that he would not allow the resources of major insurance companies to leave California. He laid out the many challenges facing California's economy, including competition from other states and the growing economies of China, India and Russia.

"We have to become the place where businesses get started and grow," This, Poizner said, will promote a healthy economy in California with "plenty of money to invest" in education and infrastructure. He exhorted his listeners to help California "retake the title of being the innovation capitol of the world."

Stressing that California was a place for entrepreneurs from the beginning, including ranchers, miners and farmers, Poizner emphasized that the state needs to reclaim this innovative spirit. As the "largest business school in California," Mihaylo College of Business and Economics will be educating our business leaders of the future and helping to bring California "back to focusing on innovation and job creation."

Poizner acknowledged the accomplishments of the college, calling it "one of the crown jewels of our education system," and noting that it is already producing its share of young and ambitious entrepreneurs, ready to make their mark on the new century.

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In Florida, Homeowners Insurers Thankful No Major Hurricane

As the 2008 Atlantic hurricane season officially comes to a close this on Nov. 30, Florida can be thankful for being spared from any major hurricane strike again this season.

However, the dangers hurricanes present and the financial ramifications facing all Florida taxpayers -- even those not impacted by a storm -- remain quite serious, insurance companies are reminding the public.

"Just because Florida was spared does not mean that hurricane activity is down; the fact is we remain in the middle of a 20-year cycle for increased hurricane activity," said Sam Miller, executive vice president of the Florida Insurance Council, which represents 64 insurers.

"There were 16 named storms this year. All but one hit other areas of the United States or close neighboring countries like Haiti and Cuba, making for a very active season," Miller said. "An average hurricane season is one with about nine named storms. We had just under twice as many named storms as an average season."

Tropical Storm Fay made landfall in Florida on four separate occasions from August 18 through the 24th and dumped heavy rains on all parts of the state. According to the Office of Insurance Regulation, Fay produced more than 41,000 claims and more than $246 million in insured damages. The highest number of claims were filed in Brevard, Duval and Orange counties. Fay was the most significant tropical storm event in Florida in years.

Miller warns that while the immediate danger may have passed, the 2009 season is not far away and as it stands now, the Florida Hurricane Catastrophe Fund (Cat Fund) - a major piece of the overall means of paying for the financial damages caused by hurricanes - remains unable to meet its full financial obligations.

The current Cat Fund's obligation is about $28 billion, most of which is dependent upon its ability to sell bonds. The chaos on Wall Street, however, has cut deeply into the fund's bonding capacity. The State Board of Administration's recent estimate of the Cat Fund's bonding capacity notes a shortfall of $10 to $15 billion.

The Senate Banking and Insurance Committee released a report a few weeks ago in which it suggests the Legislature may need to consider alternative funding mechanisms for the Cat Fund given the uncertainty in the financial markets.

Even if the problems in the financial markets were to clear up overnight and the Cat Fund were to bond to its full capacity, all Florida taxpayers-- those affected by a hurricane and those in areas unaffected by a storm-- would be at risk of huge tax increases to pay off those bonds, according to Miller.

He said the Legislature must establish a realistic exposure level for our Florida's Cat Fund. In all likelihood, achieving a realistic level will mean reducing the Fund's exposure to $16.5 billion, the basic program minus the $12 billion expansion approved in the January 2007 special session. It might even include reverting to $11 billion, Cat Fund capacity prior to expansion of the basic program in 2004, according to Miller.

The industry argues that reducing the exposure level would prompt all insurance companies- including the government-run Citizens Property Insurance Co. - to purchase the upper limits of their reinsurance on the private global market. Then policy makers must allow the insurers to include all costs of their reinsurance program in their rates, Miller added.

New Florida condo law is about to take effect

In a situation that might qualify as a "be careful what you wish for" tale, several new Florida laws related to condominium insurance policies are slated to go into effect Jan. 1. The problem is they are essentially unworkable as currently written -- leaving many condo owners, community associations and insurance agents in a state of confusion about how to proceed.

At issue is a bill passed during the last legislative session, one which was pushed in large part by condominium associations looking to deal with a particular problem: how to deal with condo units that became damaged or destroyed inside, but whose owners lacked homeowner's insurance policies to fix them.

Condominium associations' insurance generally only covers reconstructing things to the bare walls. Everything beyond that, including carpets, cabinets, light fixtures and the like, are the responsibility of the unit owner to cover with his or her own insurance policy, if they so choose. Some condo owners simply forego that expense, if they do not find it economically viable. Associations can require such coverage in their condominium documents, but they do not have to.

But under new legislation set to take effect in January, state law now appears to mandate all condominium owners in Florida to provide proof of homeowner's insurance.

The way the new law was worded, however, created several problems that raised the alarm with associations and insurance companies as early as this past summer.

For one, the onus is now on the associations themselves to police these new regulations -- requiring that every condominium association obtain proof of insurance from each of its owners on a yearly basis. But it is unclear what happens from there.

"What exactly are they supposed to do?" said Ken Direktor, an attorney who heads up Becker & Poliakoff's statewide community association practice. "How are these associations supposed to enforce this? It's not really their role, or it certainly shouldn't be, to get into the insurance business."

The new law offers one solution to associations, but it turns out to be a nonstarter. It says the associations can buy individual insurance policies directly for the owners who do not have them.

The association "may purchase a policy of insurance on behalf of an owner," the new statue, part of Chapter 718.111(11), subsection G, reads. "The cost of such a policy, together with reconstruction costs undertaken by the association but which are the responsibility of the unit owner, may be collected in the manner provided for the collection of assessments."

In other words, if Joe Smith does not have insurance on his condo, the idea is for the association itself to go to an insurance company and purchase a policy for Joe Smith. The association then assesses Joe Smith for the cost of the insurance they have bought for him.

If he does not pay the bill, the association can file a lien against Joe as it would with any other owner delinquent on his dues or assessments.

Of course, there are two notable issues with this.

From a logistical perspective, the associations themselves would be in a position of not only policing who has insurance, but putting up the initial money to buy policies and then forcing their owners to comply, which may require legal action. The sheer work and expense of doing that would overwhelm their resources, associations say.

What is more, practically, even if they wanted to do that, no insurance agents seem willing to write that kind of coverage in the first place.

"If you're not the owner, we just can't do that for an association, it's just not done that way," said Evonne Devold, with MetLife Insurance. "I've had numerous associations calling about this in Bradenton and Sarasota, but I've had to tell them we just can't do it. I don't know any insurance agent who would."

Another part of the new law requires that "the association must be an additional named insured and loss payee on all casualty insurance policies issued to unit owners in the condominium." Insurance agents say they will not write that kind of policy either, as it could have all kinds of unforeseen consequences.

'Wait and see'

Forcing a homeowner's insurance policy on someone against their will is not completely unheard of, but it is limited to one type of relationship.

Banks, as part of mortgage contracts, can require such insurance -- and if the borrower does not buy it, the bank can go directly to an insurer to force compliance. But in those cases, an actual contract provides the bank with that authority.

Condo associations are a very different situation, and no insurance company in Florida seems willing to go down that road. That leaves the associations themselves unsure just what to do.

"We're being told on one side by the management company that we have a new law going into effect we need to comply with, and then on other side by the insurance company saying they just can't offer the kinds of policies we've asked about," said Kathy Timmons, a board member of the Garden Lakes Courtyard Community Association in Bradenton. "We're just going to wait and see what happens."

Direktor said at this point, he is advising his condo association clients to sit tight and wait until the Legislature comes back into session. He said he is telling them to go ahead and send letters out requesting the proof of insurance from all owners, but not to go beyond that.

"Going out and spending a bunch of money up front trying to get this insurance themselves, which appears to not even be possible, or taking action against owners who don't have policies, to me doesn't make a lot of sense if the statute is going to be rewritten in a few months' time," Direktor said.

Legislative staff in Tallahassee have already been in discussions with industry groups since the summer over how to deal with the snafu, and consensus seems to be emerging that perhaps mandates on individual owners should be scrapped altogether.

According to a Senate staffer participating in the discussions, a draft bill is already being prepared that could roll back many of the provisions in the new law.

As to how to avoid the very scenario the bill initially intended to address -- what happens when a damaged unit is left without insurance -- some in Tallahassee are exploring whether condo associations themselves should be required to cover more interior features in their own insurance policies. Specifically, there has been mention of cabinets having to be covered by the association, rather than an individual policy.

Doing so would raise the cost of the association's insurance, but it would lower the cost of individual policies that could be more limited. Given that the owners fund the association, the idea is for the cost to largely balance itself out in the end.

That approach would hearken back to the way condo insurance used to be 30 years ago. At that time, almost everything was covered under the association's policies. But after some high-profile cases in the 1980s and 90s of people spilling bleach on their rugs and burning their countertops and getting successful claims, the statutes gradually moved away from association responsibility for the interior of condos and instead provided for individual owners to buy such coverage.

Now, there may be movement back in the direction of community responsibility. Regardless, the new statutes set to take effect Jan. 1 will likely be on the chopping block by legislators this spring.

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Despite weak economy, insurance industry still strong

Recent financial news from the stock market, the world economy and government bailouts have just about everyone perplexed regarding what financial institutions are strong, which ones are in trouble and which ones will remain standing after the mergers and acquisitions are completed.

Banks are failing and/or merging, stocks are up or down depending on the hour and a line has formed at the Department of the Treasury with major institutions in several industries looking for a "bailout."

Like most of us, I'm concerned about where to keep my money, what's going to happen to my 401(k), or should I say, "What 401(k)?"

I also want to know if the money I pay my auto and homeowner insurer will be there should I have a claim in the near future. Will I be protected?

The reason for this concern started with the problems of a major international conglomerate that the news media referred to only as an insurance company. In fact, that company owns literally hundreds of diverse organizations worldwide, and insurance only is one part of the mix.

In fact, the one line of business that the company will retain, and remain strong in the future, is the insurance business, not the other diversified business lines.

All this is said to remind me that the insurance industry remains fundamentally strong.

The industry's assets are in the range of $500 billion above its legal obligation to policyholders.

That means insurers are financially able to continue selling policies, paying claims and developing new products to protect property, businesses and lives.

To protect their assets, the industry collectively maintains less than 20 percent of its portfolios in stocks, with more than two-thirds of their funds placed in highly rated corporate and government bonds.

Unlike many banks and other financial organizations, insurers are not suffering from either a credit or a liquidity crisis.

Further, and closest to each of us, insurers are regulated at the state level. In Georgia, it's the commissioner of insurance and fire safety whose department closely regulates life, health, property and casualty and other insurers.

"For the past 14 years, my No. 1 job has been to make sure that insurance companies are solvent and able to pay every valid claim. If it appears that any insurer will be unable to fulfill the promises made to Georgia policyholders, I will swiftly intervene with the goal of getting the insurer back into a strong solvency position," said Georgia Insurance Commissioner John Oxendine.

Policyholders are protected from a potential insurer failure through a limited safety net that is in place to pay claims. Initially funded by the insurance industry, the state guaranty fund is in place should a company not be able to pay its claims.

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Some Steese and North Star homeowners may get breaks on insurance rates

If you live in the Steese or North Star fire service areas, check with your insurance company to see if you have a rate decline coming.

The ISO fire ratings for both areas are improving. ISO rates fire protection on a scale of 1 to 10, with 1 being exemplary.

Most of North Star is moving Jan. 1 from 8B to 4, which is the level that Lakloey Hill has long enjoyed because of its hydrants. The Steese area is changing Dec.1 from an 8B to a 5.

Micheline Patterson of Ken Murray Insurance said, “We have seen some pretty nice refunds being issued to clients with the new protection class change, a little extra money for Christmas.”

“Some even call to make sure the refund is really theirs,” she said.

Not all insurance companies set their rates based on the ISO ratings. For instance, State Farm uses its own loss records as a measure of insurance risk and classifies areas by Zip codes.

Patterson said some insurance companies won’t change their rates until the policies are renewed, while others are making the change and issuing refunds.

“It is a good idea to call your insurance agent no matter where you live. The Chena-Goldstream Fire Department and Ester fire departments have been re-classified and if the homeowner did not call their agent and advise them of the change they may still be paying the higher rate,” she said.

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Georgia Auto insurance rates to rise.

Thousands of Georgia drivers could see substantial increases in their auto insurance rates -- as much as 81 percent, for some -- as insurance companies begin setting their own rates under a law that took effect Oct. 1.

WHO'S GOING UP?

Nineteen insurance companies have set new rates that renewing or new customers will encounter, with 14 enacting average increases between 2 percent and 11 percent, according to the state Insurance Commissioner's Office.

The increases are much higher for certain drivers. A 28-year-old man with a DUI conviction, an accident or other violations who is insured through Central Mutual Insurance Co. can expect his rate to climb 81 percent.

Drivers insured through 21st Century Insurance Co. will see their rates climb at least 9 percent, on top of a 7.5 percent increase the insurer received in August, when the state still had authority to review and approve insurance rates beforehand.

"We're seeing a lot of companies coming in with very significant swings," Insurance Commissioner John Oxendine said.

The largest increases, between 24.5 percent and 81 percent, would affect about 60,000 drivers.

Six of the companies raising rates, including 21st Century, are owned by underwriting giant American International Group, or AIG, which is in line for a multibillion-dollar government bailout. AIG officials did not respond to a request for comment.

WHO'S NOT GOING UP?

Four companies will reduce their rates by a fraction of a percentage, including State Farm Mutual Automobile Insurance Co., the state's largest insurer with 1.4 million policies. Lincoln General Insurance Co. will cut rates the most, by 10 percent.

WHY DID THE LAW CHANGE?

When state lawmakers debated the law, supporters said allowing insurers to set their own rates would spur competition and improve prices for consumers. It passed the House and Senate with only 13 votes against it.

Mr. Oxendine fought the change, which was added to a bill allowing drivers to bolster their coverage against uninsured motorists.

Mr. Oxendine said Friday that he doubted the law would ever increase competition.

"These companies can come back every couple of months and raise rates if they want to," Mr. Oxendine said. "I think the key is going to be what happens over the next year."

Sen. Jeff Chapman, R-Brunswick, voted against the bill. He said he hoped rates would eventually be driven down.

"You obviously don't want to see anybody get taken advantage of," Mr. Chapman said.

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Check of clippings shows big picture on auto rates

People across the country have organized into groups in an attempt to reduce roadway deaths and serious injuries.

Virtually every day, several hundred individuals experience catastrophic events, but we don't hear about them unless they involves large numbers of people or the circumstances are very unusual.

But let's connect the dots to show how serious, seemingly individual incidents actually tie together.

Here is a brief account of accidents reported in a seven-day period in five Southern states:

Oct. 24: A 22-year-old motorcyclist killed on Beach Boulevard in Jacksonville, Fla.

Oct. 25: A sport utility vehicle full of high school cheerleaders collided with an oncoming car on wet, foggy highway in rural northeastern Tennessee, killing four people, authorities said. The SUV lost control on a curve, flipped on its side and crossed the center lane, slamming into a Ford Taurus. The SUV erupted into flames.

Oct. 26: A Gainesville, Ga., man was killed in motorcycle wreck when he lost control of his motorcycle on U.S. Highway 129 in Lumpkin County.

Oct. 27: A 51-year-old Kiln, Miss., man was killed in a wreck involving his motorcycle and a pickup driven by an 18-year-old in Pearl River County.

Oct. 26: A 49-year-old bicyclist was killed on the Granada Bridge in Ormond Beach, Fla., when she was hit by an eastbound SUV driving in the bike lane.

Oct. 27: A Covington, Ga., man died three days after his 22nd birthday when he crashed his car while racing two others on Clark Howell Highway.

Oct. 28: A Parker. Fla., man died shortly after his motorcycle crashed into a car, landing underneath the vehicle in Panama City.

Oct 30: A Davie, Fla., businessman died Wednesday in a motorcycle accident on Florida's Turnpike.

Oct. 30: An Arab, Ala., man died when his motorcycle collided with a car.

Nov. 1: A West Palm Beach, Fla., man was killed in a motorcycle accident on Boggy Creek Road in Osceola County.

Notice how many of the fatalities were young people doing exactly what many safety groups try to prevent; the big picture is much more frightening than any one incident.

Insurers ultimately pay out significant amounts of money for vehicle repairs. The average cost of repairs in traffic mishaps ranges between $2,500 and $2,900. Injuries to occupants result in even more costly medical care.

Even a nonlife-threatening injury including ambulance transportation and emergency room bills, not to mention the additional billing for lab tests, X-ray readings plus disposable medical equipment and pharmacy items, pushes the cost of such treatment into the thousands of dollars. Questions of fault can lead to litigation that is costly to the insurer and the individual not only in dollars but also in time and effort as litigation can remain unresolved over a number of months or years.

There's another consideration. Individuals must understand what their insurance limits are for medical and personal liability and collision liability since the insurer is obligated to cover its insured up to the policy limits.

While we all want lower insurance rates, try to grasp the bigger picture. In just one week's time, across five states, there were all these newsworthy accidents resulting in death, destruction and injuries.

These crashes were so unusual that they made the news. What about all the traffic crashes that do not make the news?

This is a much bigger problem than most of us take the time to consider. If I'm a safe driver, at least I can earn discounts from my insurer for being a safe driver and for being a long-standing customer. We are all affected by the forces around us, so auto rates are not just a function of how safe a driver I am, but also what goes on around me.

That's why so many groups try to impress the public with issues of driving safety in cars, trucks, motorcycles and even bicycles.

Simply put, drag racing, overdriving your headlights at night, failure to keep your vehicle under control, tailgating and changing lanes without signaling add up whether we do it or someone else does.

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State Farm, Farmers to raise California homeowner insurance rates

Insurance Commissioner Steve Poizner's decision is denounced by some, but others say recent wildfires make increases reasonable.

Reporting from Sacramento -- As if plummeting real estate values weren't enough, insurance rates are heading up for many California homeowners.

State Insurance Commissioner Steve Poizner late last month quietly approved rate-increase requests from two of the state's three largest homeowner insurance companies. No. 1 State Farm Mutual got the go-ahead for a 6.9% increase, its first in five years, while rates at third-place Farmers Group Inc. will rise 4.1%.

A similar request for a 6.9% increase from No. 2 Allstate Corp. is pending at the state Department of Insurance. The three insurers cover about 2.5 million policyholders, more than half of the insured homes in California.

Some consumer advocates denounced the rate increases.

"In an economy like this, Californians are relying on the insurance commissioner to keep premiums as low as possible," said Douglas Heller, executive director of Santa Monica-based Consumer Watchdog.

Others said they could understand why the commissioner granted the requests, given the hundreds of wildfires that have swept the state this year. "I think there is going to be a general perception out in the world that insurance companies are going to have to raise their rates," said Amy Bach, executive director of United Policyholders in San Francisco.

Insurance claims from Southern California's three most recent major wildfires, which damaged or destroyed more than 1,000 homes, could reach $800 million, according to AIR Worldwide, a Boston firm that estimates catastrophe damage.

Sometimes rate increases are appropriate, said Poizner spokesman Darrel Ng. "Unfortunately, insurance rates can't keep decreasing forever," he said. "Homeowners' rates have gone down nearly $800 million since Poizner took office" in January 2007.

State Farm spokesman Bill Sirola said the rate hike was justified and was based largely on documented increases in the costs of repairing damaged structures as well as a rise in other types of claims covered by homeowner policies. Those other claims could arise from such disparate causes as a dog biting a mail carrier or a tree falling on a roof.

State Farm cut rates 6.2% in 2003 and 20% in 2007, Sirola said.

"They go up and they go down because our primary obligation is to make sure we're generating enough revenues to pay our claims and put some money aside for future catastrophes," he said.

Farmers, which cut its homeowner premiums 18% in 2006, said it asked for the higher rates partially to compensate for millions of dollars in claims paid to victims of Southern California wildfires over the last five years. Inflation in building material costs and labor are responsible for the bulk of the rate increase, said Steve Feely, Farmers' senior vice president for California operations.

Most of the company's 360,000 policyholders will see rate increases of zero to 3%, Feely said. About 1% living in fire-prone zones will see rates jump 20% or more, while about 27% will see their rates decline.

Consumer Watchdog, which unsuccessfully petitioned Poizner to hold a public hearing on the State Farm and Farmers requests, may ask the commissioner to reconsider his decisions.

State regulations require the commissioner to hold a public hearing when a request for a rate increase exceeds 7%. He has the discretion to waive a hearing when a proposed rate hike is less than 7%.

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$115 Million Insurance Rate Hike for California Homeowners

California Insurance Commissioner Steve Poizner has allowed two of California's largest home insurers - State Farm and Farmers - to increase premiums by a combined $115 million. State Farm customers will soon face an average 6.9% hike and Farmers policyholders' rates will climb 4.1%, according to recent decisions by the Commissioner. In both cases, the nonprofit Consumer Watchdog had formally challenged the rates and petitioned Poizner to hold hearings pursuant to Proposition 103, but the commissioner rejected those requests.

"In an economy like this, Californians are relying on the insurance commissioner to keep premiums as low as possible, but Commissioner Poizner refused to hold a hearing to investigate rate hikes that will affect more than 2.5 million homeowners," said Douglas Heller, Consumer Watchdog's Executive Director.

"We reviewed the proposed rate increases and concluded that they were unjustified. The commissioner should not have allowed these insurers to jack up prices like this."

At least $20 million of the increase for State Farm was allowed as an exception to Proposition 103's strict limit on excessive insurer expenses in order to let the insurance giant charge customers for "higher quality of [customer] service." Included in Farmers' rate hike was a special exception to the expense limit for millions of dollars allegedly spent on the company's fraud prevention efforts. According to Consumer Watchdog, the company did not meet the standard required to pass those costs on to policyholders.

Consumer Watchdog noted that both State Farm and Farmers are financially well-positioned to pay claims resulting from the recent Southern California wildfires and do not need premium increases to address those losses. The group intends to challenge the Commissioner's decision allowing Farmers' rate hike and is reviewing the propriety of the State Farm increase.

If the rates take effect, policyholders with State Farm will see an average increase of about $60 per year and Farmers customers will pay about $30 more on average.

With sinking economy, insurers turn to rate hikes.

Insurance company profits are tied to their investment income and when the economy weakens companies try to push premiums higher in order to maintain high profits, said Consumer Watchdog. The group is expressing concern that other insurers will press the Department of Insurance for more rate hikes as their investment portfolios tank. As evidence, the group pointed to Allstate, which was forced to lower its California homeowners' insurance rates by about $250 million last spring. Allstate requested a 6.9% rate hike increase for homeowners in September. That proposal is still under review by the Department of Insurance.

"While everyone is feeling the sting of a bad economy, insurance companies want to pass the pain on to homeowners and other policyholders. The insurance commissioner stands between these companies and our wallets and Californians need him to be there," said Heller.

California's insurance reform law, Proposition 103, requires insurance companies to open their books and submit to public hearings to prove their rates are adequate without being excessive. Members of the public can challenge rate hike proposals, and the commissioner must grant a hearing if the requested change exceeds 7%. It is left to the commissioner's discretion whether or not to initiate a full hearing for changes less than 7%, as was the case in the State Farm and Farmers matters.

In recent years, Consumer Watchdog has successfully challenged several insurance rate proposals, resulting in more than a billion dollars in savings for California policyholders.

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American Families Need Auto Industry Bailout

We baby-booming native Detroiters grew up with a ranking system. On the playgrounds at recess, GM was No. 1, Ford was No. 2, Chrysler was No. 3 and American Motors wasn't really worth the effort it took to insult the poor kid whose dad worked there (sorry Mitt Romney). My dad worked for GM -- it all made sense to me.

I didn't own a car until I moved to Los Angeles 10 years ago. Before that, my husband and I had lived in Chicago and we rode the El and the buses, an option that wasn't as viable here. He moved to L.A. nine months before I did, and just before I arrived, he bought us a used car. It wasn't exactly a "little old lady from Pasadena" situation -- it was a rusty, 1981 Chevy Citation -- but its provenance was single owner, a friend's mom, and it had only 81,000 miles on it.

He picked me up at LAX in it, explaining its virtues, which were not exactly apparent as we drove north to our new home in Hollywood. "You need a broomstick to prop open the hatchback, and be careful when you use it because if that thing falls, it will snap your neck. And the windshield wipers turn on of their own volition every few hours, but other than that, it's a V-6, and it's built like a tank."

Didn't I know it. I'd helped build the prototype for that very car. This was back in 1976, when I worked for a summer at GM Plant 21 on the early version Citations (simply called the "X" car then) that would come out five years later. I was a runner. I moved up and down the line and looked at the list attached to the hood of the X-car where guys (it felt as if I were the only woman in the plant) made notes about missing pieces of chrome or molding. I ran to the central supply crib in the middle of the plant and fetched the missing pieces. For that I made $8 an hour -- and earned enough for room and board at the University of Michigan the next year. My parents paid my tuition.

Two years after he'd bought the Citation, my husband was driving it when a woman who was, in her own words, "high on yoga" ran a red light at 40 miles per hour and crashed into him on the driver's side. He, as the saying goes, walked away from the crash unscratched. The Citation, just a midsize car, did its job. Who needs a $50,000 Hummer?

That's part of the question, isn't it? Who needed those Cadillac Escalades, those H2s, those Chevy Tahoes, gas guzzlers all, that never met a CAFE standard they wouldn't rather miss by 5 miles per gallon? GM made cars and trucks whose engines almost seemed to hum, "Build 'em bigger! Gas is cheap!" But just because people will buy it, does that mean it should be built? Where does the responsibility for one's product line come into play?

GM Chief Executive Richard Wagoner, in a "NewsHour" interview with Judy Woodruff recently, said GM built those SUVs and trucks because that's what customers demanded. What he didn't add was that GM was up on Capitol Hill lobbying hard against raising CAFE standards. That's a hell of an omission. It's as if the American Dental Assn. asked Congress to pass laws that required parents to feed children three square meals of candy every day and then insisted that it bore no responsibility for the decay that followed.

But, of course, it's still not that simple. The monster bad guy, GM, is really not all that evil. Not only does it directly employ 96,000 people, its 6,500 dealers employ another 340,000 people, and it does business with more than 2,000 suppliers in 46 states. It has provided blue-chip healthcare (including dental and vision) and modest pensions to its employees for the last 40-some years, meeting a responsibility that government has not yet stepped up to (and adding great cost to its cars). Who doesn't want people to have decent wages and good healthcare coverage?

On Thursday, I called my parents, octogenarians now, to see what they thought about the hearings, the testimony of the Big Three CEO's, the bailout. My dad came on first and bellowed, "It's all crap!" I didn't quite know what he meant by that, so I asked a specific question. Should they lend the money to GM? He yelled, "Yes! Lend the money and let's get going and fix this thing! We'll have 70 million unemployed immediately if they let it go under! They say it's less, but I say it's 70 million!" My mom felt the same way, though she didn't bellow and her numbers were sound, and then she lowered her voice and told me that she'd moved a chunk of money out of GMAC, the financial services arm of General Motors (although no longer wholly owned by the company), where it had been parked for decades. "I feel awful that I did it. The company has been good to us, but we couldn't take the risk."

During the Senate hearings the other day, more than one senator, and an economist from the University of Maryland, argued that if GM, Ford and Chrysler declared bankruptcy, accepting a Chapter 11 reorganization plan whose underpinnings were laid and supported by the federal government, people would still buy their cars and would trust that the cars would be serviced and under warranty.

But let's be realistic here. My mom and dad, whose loyalty to GM could make Lou Gehrig look like a Yankee traitor for retiring too young, moved their money out of GMAC. Do you really think the average American is going to buy a car from a company in Chapter 11? Toyota and Honda aren't going anywhere, after all. We'll have options.

When I asked my parents about the bailout, I didn't expect an objective answer. I imagine they see GM in each of the six kids they raised, not to mention the grandkids who followed.
Multiply that by the millions of families linked to the Big Three today -- not just the direct employees but the people who work at the dealerships and those who work for the parts suppliers -- and you've got indelible red ink staining the books of businesses in every state. The disappearance of the automobile industry could kill the chances of all of these people to have a decent future.

That's what the bailout supporters are fighting for, what they're driving toward -- a decent future. Who can blame them for wanting to do so in an American-made car?


Written by Ellen Slezak

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New law lets Georgia auto insurance rates increase

Hikes of 2 to 11 percent common

ATLANTA - Thousands of Georgia drivers may see substantial increases in their auto insurance rates - as much as 81 percent, for certain motorists - as insurance companies begin setting their own rates under a new law that took effect Oct. 1

Nineteen insurance companies have set new rates that renewing or new customers will encounter, with 14 enacting average increases between 2 percent and 11 percent, according to the state Insurance Commissioner's Office.

But the increases are much higher for certain drivers. A 28-year-old male with a DUI conviction, an accident or other violations who is insured through Central Mutual Insurance Co. can expect his rate to climb 81 percent.

Drivers insured through 21st Century Insurance Co. will see their rates climb at least 9 percent, on top of a 7.5 percent increase the insurer received in August, when the state still had authority to review and approve insurance rates beforehand.

"We're seeing a lot of companies coming in with very significant swings," Insurance Commissioner John Oxendine said.

The largest increases, between 24.5 percent and 81 percent, would affect about 60,000 drivers.
Six of the companies raising rates, including 21st Century, are owned by American International Group, or AIG, which is in line for a multibillion-dollar government bailout. AIG officials did not respond to a request for comment.

Four companies will reduce their rates by a fraction of a percentage, including State Farm Mutual Automobile Insurance Co., the state's largest insurer with 1.4 million policies. Lincoln General Insurance Co. will decrease rates the most, by 10 percent.

When state lawmakers debated the law, supporters said allowing insurers to set their own rates would spur competition and improve prices for consumers. It passed the House and Senate with only 13 votes against it.

Insurance Commissioner John Oxendine fought the change, which was added to a bill allowing drivers to bolster their coverage against uninsured motorists.

Oxendine said Friday he doubted the law would ever increase competition.
"These companies can come back every couple of months and raise rates if they want to," Oxendine said. "I think the key is going to be what happens over the next year."

Sen. Jeff Chapman, R-Brunswick, voted against the bill. He said he hoped rates would eventually be driven down.

"You obviously don't want to see anybody get taken advantage of," Chapman said.

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Attorney General: Auto Insurer discriminates

Attorney General Martha Coakley yesterday accused Premier Insurance of price discrimination” for allegedly basing some of its auto-insurance rates on whether consumers own a home.

Coakley, who asked the Division of Insurance to review Premier’s recent rate filing with the state, said new deregulation rules ban insurers from basing auto-insurance rates on sensitive personal information, such as a person’s income, marital status and other factors.

The goal is to prevent insurers from creating a two-tiered insurance system - one for the more affluent, one for the poor.

One of the banned categories is asking potential customers whether they own a home, something that conceivably could be used to estimate a person’s wealth.

But Coakley said Premier, a unit of Travelers Insurance, is now basing some of its rate discounts on homeownership.

“We’re saying it violates the rules,” said Amie Breton, a Coakley spokesman.

In a statement, Premier said it will “work with the Division of Insurance and attorney general to resolve any issues” and “hopes to offer discounts to consumers, thanks to a (recent) auto insurance reform.”

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Health insurers offer Cover For Everyone.

One condition: All must buy a policy

WASHINGTON - The health insurance industry has proposed guaranteeing coverage for every American, regardless of medical condition, in return for an enforceable requirement that everyone have a policy.

Republican Charles Grassley of Iowa says that mandating healthcare coverage won't 'come cheap' and will swell the deficit.

A SENATOR'S WARNING

The proposal also calls for the government to subsidize premiums for moderate-income people, according to the trade group America's Health Insurance Plans. AHIP speaks for 1,300 companies that provide public or privately funded benefits.

The insurers' plan is similar to ideas offered by President-elect Barack Obama, except Obama hasn't supported making insurance mandatory for everyone. He has proposed expanding government health programs, giving subsidies to low-income families, and requiring insurers to cover all applicants.

"No one should fall through the cracks of our healthcare system," said Karen Ignagni, the industry group's chief executive. "Universal coverage is within reach and can be achieved by building on the current system."

Senator Charles Grassley of Iowa, the Finance Committee's senior Republican, yesterday said that mandating coverage won't "come cheap." He warned that the federal budget deficit - already $400 billion, excluding the $700 billion financial rescue package and costs from the recession - would swell.

"Increasing the record-breaking deficit is not a legitimate option," Grassley said. "Ignoring the burden of inefficient spending that healthcare places on our economy is also not an option."
The Finance Committee, headed by Senator Max Baucus, and the Health, Education, Labor and Pensions Committee, led by Senator Edward M. Kennedy, have begun working on separate legislative proposals to overhaul the health system. Democrats Baucus of Montana and Kennedy of Massachusetts yesterday held a closed-door meeting to discuss strategy for healthcare legislation. Among Republican senators participating were Grassley and Orrin Hatch of Utah.
The AHIP plan would promise insurance for all as long as a government-enforced enrollment process ensures everyone has a policy. The group didn't say what penalty should be imposed for those who fail to get coverage.

The trade group proposed refundable tax credits for working families and said families buying coverage on their own should get the same tax break as those who obtain insurance through their employers. The value of employer-provided benefits isn't taxed.

The health insurers also said premiums should be kept stable through a "broadly funded reimbursement mechanism that spreads costs for the highest-risk individuals."
The Blue Cross Blue Shield Association, representing 39 companies, issued a similar call for mandatory coverage.

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Homeowners insurance: Time for a tune-up?

According to the California Department of Insurance, nearly 39,000 claims were filed after the wildfires that swept across Southern California last October and November. Just over 30,000 of those claims had been settled as of June 20, leaving almost 9,000 unpaid or disputed.

It's not clear how many of those claims involve underinsurance. As of this week, the Department of Insurance had received 90 complaints from policyholders who said their insurance did not adequately cover their losses from last fall's fires. But officials say many underinsurance cases may not result in complaints to regulators.

"It's not the vast majority of claims, but it's not insignificant," said state Insurance Commissioner Steve Poizner.

Among the reasons given for underinsurance: consumers trying to keep costs down by not reporting improvements, and insurers trying to offer competitive quotes.

Whether underinsurance is a widespread problem or an overblown concern, now could be a good time for those spared in the recent fires to see whether their policies cover at least $200 per square foot -- considered the low end of most homes' replacement cost -- and contact their agents.

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Free Online Auto Insurance Quotes

In the United States all drivers must have the mandatory auto insurance in order to protect them from law suits which are a result of an accident or some other infraction of the traffic laws. A main priority for all people who drive a vehicle should be the purchase of auto insurance that gives adequate coverage at a price that is affordable to them. There are some websites that offer online auto insurance coverage that is both affordable and adequate.

You could drive without auto insurance coverage, but you will be at risk for a big fine or perhaps being sent to prison as a bad result of being liable for losses caused by an accident. Property owners are protected by auto insurance in the event that a motorist drives onto their property and causes damages.

To avoid being aggravated by the lack of enough time for the search for online auto insurance quotes there are some common sense things to remember.

In an effort to find the most reasonable auto insurance quote for you, it is necessary to gather a large number of quotes and then take the time to compare the benefits of one against the benefits of another as a means of narrowing them down to the best one for your circumstances.It will take you less time to understand what you are getting than it would when an insurance agent explains things if you do your own comparisons of the auto insurance quotes. When you are not being pressured by an insurance salesman, you will be more likely to shop around and make wiser decisions.

As you are looking through several auto insurance quotes, there are various factors to keep in mind because these things will have an influence on the amount to be paid on each premium. The total cost of the premiums, the quality and level of coverage offered, and other services such as car rental and towing which are offered are all items that should be thoroughly examined.

Lots of information from many insurance experts is provided to you when you use the full range of auto insurance quote sites and these insurance savvy people can help tremendously in finding the best insurance coverage for you. No one wants to pay an excessive amount for auto insurance coverage, however, it is also a fact that inexpensive insurance quotes can mean that their coverage will not be satisfactory or adequate.

The online auto insurance websites will try to be of assistance to you in finding the insurance coverage that is best for your circumstances, but you need to examine each insurance quote you receive to be assured of the fact that you are getting the best coverage.

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