Car Insurance

Adventures in Car Insurance Shopping

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Let’s face it. No one shops for car insurance for fun. You’re getting your first car, moving off of someone else’s policy, combining coverage, moving to a new area, trying to improve your coverage – or save money.

Not only can it be a pain, but it can be confusing, too:

The Fallacy of The Caveman
Technology brings all sorts of information and power to the consumer quickly and easily. TV ads stress how fast and easy it is to get a quote. This is a great way to gather information before making a decision – and many consumers use it precisely this way. It’s not such a great way to buy insurance.

The danger is that getting your own quote turns you into your own insurance advisor. The computer will quote whatever you ask it to. Maybe you’ve entered all the information correctly; maybe not. Maybe your coverage is appropriate for your situation; maybe not.

Add to this the fact that not every company offers comparable limits and coverage, and it’s no wonder that shopping is confusing, and why some people report results like this:


Does anyone really believe that they’re getting the same coverage if they pay 10% of what they were before? For that matter, what does $162.00 insurance even cover?

Part of what you get when you consult an insurance agent (like us, for example) is advice on what to buy, and help comparing one company to another.

Check out this guy:

Just because you CAN get a car insurance quote in 15 minutes doesn’t mean you have to make your decision in that time frame! This guy couldn’t even wait for the company’s web site to come back up. Apparently price was his only consideration. But what did he buy? Does he really know that he got a good deal?
Insurance: Just a Promise
When you’re shopping, don’t forget that insurance is only a promise to pay in the event of a loss. Consulting a good local agent usually costs no more than doing it yourself – and an agent can help you decide what to buy, compare different proposals, and evaluate the insurance company behind the quote.
Our recommendation: Use the power and speed of the internet to do your research, but take your time, talk to others and choose wisely.


Watch for Moose!

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The Maine Department of Transportation recently issued a reminder to motorists to watch for moose on the road. Out-of-state visitors often chuckle when they see “moose crossing” signs, but colliding with a moose is no laughing matter.

Maine averages more than 600 crashes a year between moose and vehicles, killing 22 drivers over the past decade. Nearly 90% of crashes occur between dusk and dawn, with about 80% in darkness.

Moose are dark brown, and therefore difficult to see at night. They are so tall that their eyes do not reflect oncoming headlights. They tend to move in groups; if you see one, they may well be another. Because of their height, the animal is often thrown into the windshield when struck, causing injury and significant vehicle damage.


While many Mainers know that deeer are on the move during November breeding season, many don’t know that moose are more active during their summer mating season.

The DOT has produced a helpful brochure with safety hints, offering advice ranging from driving safely in known moose-crossing areas (operating “within your headlights”) to what to do if you see a moose in the roadway (stay in your vehicle, and don’t try to drive around it), to what to do if a crash is unavoidable (let up on the brakes just before impact).

Southern Maine drivers, especially in urban and suburban areas, tend to think that they’re out of the danger zone. But moose collisions have occurred in heavily populated neighborhoods in Portland, Lewiston-Auburn and Bangor.

Buckle up, slow down, drive carefully and live!


Myth Buster: “Most Ticketed Vehicle List” Full of Surprises

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If you had to guess what kind of vehicle is most likely to tickets, what would you choose? A flashy sports car like Ford’s Mustang or the Porsche 911? A “pocket rocket” like the VW GTI that attracts a younger buyer? Guess again.


According to ISO’s Quality Planning Corporation‘ s recent study, The Hummer H2/H3 actually leads the pack. Why? That’s the subject of great debate. Is it that Hummers attract a buyer who’s independent and “type A”? Does the stance of the vehicle itself change the way drivers interact with traffic and roads? Who knows. But Hummers are over 450% more likely to be ticketed than the average vehicle.

Rounding out the top 10 are three Scion models, the Toyota Solara and Matrix, all of which appeal primarily to younger drivers, and a couple of the higher powered Mercedes models. Another surprise is the Subaru Outback Station Wagon, over 2.5 times more likely to be ticketed than the average vehicle.

So which vehicles are the least likely to be ticketed? Well, some are not surprising: three Buicks and an Olds make the bottom 10. Interestingly, some other SUVs and a few pickups make the “least ticketed” list: Chevy’s Suburban, Tahoe and CK pickup, and the GMC Sierra. Each of these is less than half as likely to get a ticket as the average vehicle. The absolute least likely: another surprise – theJaguar XJ sedan.

The study compared a vehicle’s violation count per 100,000 miles driven for a one year period from 2007 to 2008.


Name Your Price? We Help You Do that Every Day.

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Progressive Insurance, the nation’s 4th largest auto insurer, recently introduced “Name Your Price®” auto insurance on their web site. In ads featuring Flo, their quirky shopgirl spokesowman, the company hopes to connect with consumers’ desire to control their expenses in today’s economy.

In Progressive’s press release, spokesman Dale Willis said “Drivers want to customize their car insurance so they get the best possible coverage at a price that’s right for them, especially in times of economic uncertainty.”

The program is available in 16 states (not Maine). A countrywide rollout is planned for this year.

We respect Progressive’s culture of innovation. They are the Bill James of insurance: experts at analyzing data in new ways to find the right premium for virtually any risk. In fact, we have offered Progressive products to our clients for decades. They also sell directly to shoppers through their Progressive Direct brand.

What About Coverage?
Naming your own price sounds good – maybe too good. The problem: it’s easy to forget why you wanted to buy insurance in the first place: to protect your assets.

Insurance isn’t like shopping at the mall. There are no “sales”, and prices don’t magically drop. Every premium reduction is funded by a decrease in coverage or increase in deductible.

Who’s Advising You?
Tough economic times may motivate you to reduce your expenses. It’s not only smart; it’s necessary. There’s certainly no shame in trying to save money. Clients call us all the time with that goal in mind. We help them decide what changes to make to meet their budget – in effect to “name their price”. The difference is, we explain to them how their choices affect their coverage.

Who’s advising those Progressive shoppers when they “name their price”? So far, Progressive has chosen to offer this option on their “Progressive Direct” web site, not through local independent agents like Noyes Hall & Allen.

Although Progressive employs agents in their call centers to handle shoppers’ questions, the shopper has to request that contact. Most people are likely to avoid that – and make decisions on their own. Even if they do choose to speak with a Progressive Direct agent, the agent has no knowledge of the online shopper, their circumstances, or the area where they live. And, if the shopper has any follow up questions, they’re unlikely to speak with the same agent again.

We think it’s better to deal with a local insurance advisor – someone who can get to know you; the same person you can speak with any time you have questions. For information about how you can save money on your insurance, contact us today.


Believe it or Not: An Insurance Company with Empathy

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Kudos to Progressive Insurance for reaching out to Kentucky ice storm victims via email. In addition to offering help in reporting and tracking claims, Progressive asks clients to call if they need extra time to make a payment in the wake of the storm.

In addition to sending emails, Progressive utilizes a special catastrophe web site that their customers can access for information about their policy, their claim, and other FAQs.

We applaud Progressive for this response, and our thoughts go out to midwesterners dealing with the ice storm. We’ve had our share here in Maine, and we know that this is a very challenging time. Stay safe!

 

Car Sharing? Protect Yourself First!

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A Valuable Service

Car sharing is an economical way for people who don’t own a vehicle – or who need an extra one periodically – to access a private vehicle. Led by Zipcar, the service have been extremely popular in urban areas and at colleges – including Bates College in Lewiston. Now, it’s finally come to Portland, Maine – thanks to UCarShare, a division of Uhaul.

Zipcar logo

Car sharing is often seen as environmentally friendly, because it can reduce the overall number of vehicles on the road, cut down on the demand for parking, and allow people who prefer to use alternative transportation (public transportation, bicycle, scooter, walking), but still need to use a private vehicle from time to time. It encourages density, and helps to reduce sprawl by making city living more convenient. We support the idea, and have blogged about it before. Ucarshare logo

One Big Issue

There’s just one aspect that we think you should think about before joining a car share service: liability. Car share companies provide insurance for members while driving the car. But how much? Zipcar says they provide $300,000 of liability coverage (less for members under 21 years old).

The problem is, you can get into a lot more trouble than that. Maine’s Wrongful Death Statute allows up to $1,000,000 in damages per person, PLUS punitive damages. If you’re driving a Zipcar and cause an accident that kills someone, you could be looking at at least $200,000 of responsibility, out of your own pocket. Even worse, you’d have to pay your own legal defense expenses once Zipcar’s $300,000 limit was exhausted.

UCarShare appears to offer even less liability coverage. Their web site says that they offer state minimum limits: $50,000 per person, and $25,000 for property damage (They haven’t responded to my email to clarify this). Many cars on the road are worth more than $25,000, and it’s easy to imagine a highway accident that would involve several vehicles. Never mind that $50,000 of bodily injury coverage is only 10% of the wrongful death damage limit.

And, Maine’s minimum limits are higher than most. If you cross the border into New Hampshire, you’re packing protection of $25,000 per person. And, don’t get us started on Florida, with their $10,000 bodily injury limit per person and $10,000 of property damage.

You Can Protect Yourself

If you have a Maine auto insurance policy with liability coverage, it will cover you after the car share service’s policy limits are exhausted, provided that your liability limits are higher than the service’s.

If you don’t have a vehicle of your own, you can buy “named non-owner’s” insurance to protect you. Talk to an insurance agent – including us – about this.

One More Thing…

The car share services typically make you responsible for the first $500 of damage to the shared vehicle. Your Maine insurance policy probably won’t help you out with that. Also, read your car share contract carefully. You’re probably restricted to listed people driving the vehicle, and on certain types of roads and situations. Know the rules before you get behind the wheel!

Good News to Start 2009: Maine Highway Deaths Reduced

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Gasbuddy.com chart
Last year was the least deadly on Maine roads since 1959, according to the Maine Bureau of Highway Safety. Several reasons were cited, some of which showed a possible bright side to 2008's historically high gasoline prices. including fewer miles being driven and people slowing down to conserve fuel. Officials also point to increased seat belt use and safer cars on the road as factors in the positive result.

Will Insurance Rates Drop?
If traffic fatalities are down, then insurance rates will follow, right? We think the answer is a definite "maybe." Here are 3 reasons why:
  • Insurance companies use multiple years' experience when they set rates. This avoids wild swings due to one year's particularly bad – or good – experience. Accident fatality statistics have been generally favorable over the last few years. And insurance rates are generally lower as a result (chart below is from III.org).Auto ins rates  
  • Other accident-related costs are increasing. Car insurance can pay for lots of things: medical bills for injured parties, repair costs and body shop storage charges for damaged vehicles, car rental, and repair for other damaged property (utility poles, buildings, etc.). Many of these costs have increased faster than the overall rate of inflation, which insurance companies have to factor into their rates.

 

  • Accident rates haven't decreased, only fatalities.  In a recent Bangor Daily News article, a Maine State Police spokesman said "we've had the same number of crashes.". Of course, insurance companies usually have to pay larger claims in the case of fatalities, but it's the frequency of accidents that drives claims experience (and insurance rates) more than severity.  

Fewer people died last year on Maine roads, and that's great news for everyone. If the trend continues, overall auto insurance rates might continue to drop. Even if it doesn't continue, the good experience should have a calming effect on Maine auto insurance rates. 

“Wanna go for a Ride”?

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This is not new, but it’s still cool. A little over a year ago, Progressive began to include pet injury coverage in their auto policies. If you buy collision coverage from Progressive, they include up to $500.00 of veterinary bill coverage in case your pet is injured in an accident. There’s no charge for this coverage, and you don’t get a discount if you don’t “drive with dogs”. We’re not aware of any other company that does this.

Progressive’s web site also includes some useful safety tips for driving with pets, ranging from the no-brainer (“never leave a pet unattended in a car”) to the easy-to-forget (“make sure that your pet has identification”) to the buzz-killing (“don’t let your pets ride with their heads out the window”).
This is different from “pet insurance”, which is offered by companies like Embrace and Pets Best Insurance. Those are essentially health insurance policies for animals – much broader – and more expensive coverage.
If you’re an animal lover who takes your pet in the car with you, it may be worth getting a Progressive quote. If you’re in southern Maine, our agency would be happy to help you evaluate if this is a good option for you. Wanna go for a ride?

You Never Know Who’s an Uninsured Driver

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Here's an interesting twist to our recent post about uninsured drivers, and the need to adjust your insurance accordingly.

If you're stopped at a traffic light, and rear-ended by a $140,000 Mercedes, you probably don't expect that the driver is cruising around without insurance – but you'd be wrong if that driver was troubled Giants' wide receiver Plaxico Burress. Check out the details, courtesy of the Orlando Sentinel. 

Bottom line: you never know what kind of insurance "the other guy" has – so you need to need to protect yourself. 

Now, if that didn't scare you enough, think about this for a second: what if YOU hit a $140,000 Mercedes, and had only bought state minimum liability limits  of $25,000 property damage?

Beware: More Uninsured Drivers on the Road

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M.P. McQueen reported in Wednesday’s Wall Street Journal on the national trend of more drivers are letting their car insurance lapse because of the faltering economy. Doing this puts themselves and others – including you – at risk.

McQueen did a good job highlighting the irresponsibility of not carrying liability insurance, and the importance of matching  your own liability insurance to the value of your assets.

Are Minimum Auto Liability Insurance Limits Enough?

Maine law requires all drivers to carry at least $50,000  per person / $100,000 per accident of Bodily Injury coverage, and $25,000 of Property Damage coverage. It doesn’t take much imagination to picture this limit as being inadequate to handle even a moderately severe accident, or replacement of even a mid-priced late model car.
Once you blow through your insurance coverage, your assets are fully exposed.

How to Protect Yourself from an Uninsured Driver

Most people don’t realize that the flip side of liability coverage is Uninsured/Underinsured Motorist coverage. This covers your injuries if you’re struck by an at-fault driver who has no insurance, or less than you do.
There’s the rub: if you and the other guy both have state minimum limits, your UIM coverage doesn’t apply, because you didn’t have more than he did. If you suffer more than $50,000 of medical expenses (it doesn’t take all that much – trust me), you’re on your own.
Although we’re in the business of selling insurance, we understand that people have to live within their budgets and prioritize their expenses. If the economy forces you to cut your auto insurance expenses, we suggest:
  • Look at your deductibles first. It might sting to pay the first $500 or $1,000 of repair costs after an accident, but at least it’s a known cost, with a maximum out-of-pocket.
  • If you really need to cut auto insurance to the bone, consider removing physical damage (comprehensive & collision) coverage. If you have a loan or lease on the vehicle, you’re not going to be able to do this. Also, if you don’t have physical damage coverage on at least one car, you don’t have that coverage if you rent a car either. But, desperate times call for tough decisions.
  • If you have more than one car, think about “laying one up”. You can suspend coverage for the time it’s stored. Just remember to call your agent before  you drive it again, because it has no coverage.
  • Try to pay your auto premiums on time. Paying late can jeopardize your coverage, especially if you slip up and your policy actually cancels one time. The Maine Insurance Dept. has an excellent set of FAQ, one of which offers the same counsel.

If you’re fortunate, and in expense-maintenance vs. expense-slashing mode,  make sure that your liability coverage protects your assets, and your UIM coverage is adequate.  And regardless of the law, don’t count on the other driver having insurance.