California Auto Insurance Blog

Using cell phones while driving could cost more in California if a bill that would increase penalties becomes law.

The new proposed law raises fines and fees for breaking the state’s existing hands-free laws. You cannot text on your phone, hands free. The bill would also add a point to a texter’s driving record, which would raise auto insurance premiums.

Talking or texting on a cell phone has been illegal in California since 2009.

State Sen. Joe Simitian of Palo Alto, wants tougher penalties to make roads even safer.

The bill would:

Raise the cost of a first strike from about $190 to more than $300.

Expand the law to include bicyclists

Add a point to the driving records

Points on your driving records will increase your insurance premiums or get you canceled. California and 33 other states prohibit texting.

A large minority in California regularly text or talk on the phone while driving.

Over half of the U.S. population will cohabit with a partner at some point in a lifetime. The direct auto insurance writer, Esurance markets to cohabiting couples to streamline their finances by purchasing one policy per household, regardless of their official marital status.

Now State Farm and Allstate have started giving what is referred to as the marriage discount to domestic partners. This is a very common discount given to almost all married couples. As long as the partners live in a state that approves of civil unions or domestic partnerships. Married couples save an average of 10-20%.

Younger couples 25-30 can save the most because car insurers discount policies on a percentage basis. Marital status helps offset inexperiance the car insurance companies charge more for, so savings could be around 15% for domestic partners.

Muti car discounts also help save if you have more than one car under the same policy, because of potential carpooling and reduced miles. People that are mo married of in a registered partnership can’t qualify for the discounteven if they live together, because there’s no evidence they drive togeyher or are more responsible.

Same sex marriages or domestic partnerships are a very small minority of the overall couples so auto insurers should not have to raise premiums to cover reduced profits. And the lower income could be more than offset by domestic partners flocking to State Farm and Allstate.

Still, their are always unintended consequesces, but when it’s lower prices for consumers, everyone wins.

Ryann Matthew Dunn’s driving record, occupation and life style risk added some spice to his financial outlook. He was certainly an interesting puzzle even getting insurance coverage.

Let’s peek at Ryann Dunn’s ride. His auto insurance would have been sky high even if he had a clean driving record, because he owned a speed machine. The Porsche 911 GT3 has 435-horsepower, and can rev up to 8,400 rpm. It can go from 0 to 60 mph in 4 seconds. It costs $100,000. A car insurance company would factor the repair or replacement cost of that vehicle into Ryann’s car insurance premiums.

Was Ryan Dunn’s 911 GT3 Porsche fully paid for? It was a 2007 model, so I assume he bought it new, possibly with cash or if he financed in (2006) his 5 year (max) loan could have been paid off. But since Ryann’s not here, it’s no longer his problem. Insurance is used after a loss, and if the insured is deceased, the monies owed on the car would have been owed by his estate even IF he had comprehensive coverage. Because there is usually a gap between the amount that is owned and the value the car insurance company will pay for totaling his car.

Then there is his driving record. The Jackass star had over 20 tickets in the 13 years before his fatal car accident. 10 of those infractions were for speeding and careless driving. 3 were for driving with a suspended license. He was arrested in 2005 for DUI. Since PennDOT only expunges his DUI infraction after 10 years, he would have been surcharged for the conviction for another 4 years.

I estimate Ryan paid anywhere from $5,000-10,000 per year for his car insurance. His driving and high value car proved to be the perfect storm of multiple risks for his car insurer.

But what about the events that transpired? The Property Damage Liability portion of his policy would replace the guardrail and other signage damaged in the crash. Those were relatively minimal comparatively.

The Bodily Injury coverage in his policy would protect his estate (up to certain limits) if he’s found legally responsible for bodily injury of others. His passenger Zachery Hartwell was killed. Zachary “Zac” Hartwell is survived by his wife of 8 months. Since drivers are responsible for the safety their vehicle, She will certainly file a claim against Ryann’s estate. Wrongful death lawsuits can easily exceed $1,000,000. News reports have Ryann Dunn’s net worth valued $6 million.

Zac’s widow is certain to sue for his loss of lifetime earnings, emotional damages, and then some. So if he did not have enough insurance to cover the lawsuit that is sure to come, the judgment holders can attach his remaining income and assets to satisfy the amount. Anyone that causes the death of someone else in a car is probably an underinsured driver. Love me or hate me, statement of fact.

Regardless of if they have a valid claim on Ryann’s assets, lawsuits are not cheap. Lawyers charge $500+ per hour and with appeals, can last years. Those legal fees would be paid for by Ryann’s estate, as long as the beneficiaries were defending those actions.

Few companies write $1,000,000 policies, and with his driving past, the premiums would have been gynormous. Still, Ryann may have had the foresight to get a blanket umbrella policy for cheap. Usually you can buy a $1 mil. blanket umbrella policy from your car insurance company for from $200 – $400 per year, after you get their maximum car insurance policy. Some carriers will require you to max out the homeowners or renters insurance as well before they offer you umbrella.

Dunn is survived by his parents, longtime girlfriend Angie Cuturic and brother Eric Dunn. Assuming he supported Angie, and she had an insurable (financial ties) interest is his earnings; she may have pressed him to get life insurance. Given his occupation and driving record, the costs would have been very high. Ryann was in a high risk category because he represented several “potential lifestyle hazards” to the insurance carrier. His arrest record, medical history and occupation would have given most life insurers pause, and they might have offered him a limited value policy, with significant costs.

Being only 34 not married and no children, I doubt Ryann Dunn had life insurance, but in the months and weeks ahead, we may find out.

Mr. Dunn was from a rare breed. Contrary to what you see on YouTube, there is a finite supply of people willing to risk life and limb and exploit their health and wellbeing for (potential) money. You might disagree, but competing in boxing, kick boxing and wrestling, I know there are few who really have the nads to stay, even live in that kind of dangerous place. I would almost have panic attacks before sparring with a dangerous heavy weight or expert grappler. But my love of martial arts was greater than the anxiety I felt. And you can’t learn or teach that capacity to ignore danger.

Although I did not know him personally, Ryann Dunn may have felt of many those some “Am I insane?” moments, before performing a dangerous stunt. Men like him are born, not made. Now he will grace the pages of our history books and no doubt be the source of many heated debates for years to come. And the music should teach us to learn from his successes and mistakes. I have little doubt; he would have wanted it that way. RIP Ryan Matthew Dunn.

A new study from the Institute for Highway Safety claims SUVS are safer than other cars. The study discussed only the safety of the SUV occupants, and not people in other vehicles hit by SUVs, who are more likely to be injured and / or die.

Estimates are death by SUV is between 6-16 times more likely. In car accidents with SUVs, almost 100% of those killed were in the non-SUV. Pedestrians hit by SUVs have a 300% greater risk of serious injury over those hit by average sized cars.

SUVs provide more damage because they weigh between 8,000 to 5,000 lbs so they take longer to brake and often can’t avoid accidents. They have higher bumpers which function like large weapons. They strike smaller cars above their bumpers where they are unprotected. Typically shoulder and head-high for a person in the lower car. So the non SUV occpant is more exposed to upper body (brain, neck, and chest) injury.

But almost 90% of vehicles are non SUVs, so they are more vulnerable to damage. SUVs cost up to 20% in higher car insurance. And if you hit another vehicle in your SUV and hurt or kill them, your insurance costs skyrocket. Along with the day to day speeding tickets, and DUIs.

SUVs are gas guzzlers, expensive to insure and unsafe to other drivers on the road.

In a JD Power US Insurance Shopping Study, over half of insurance shoppers requested a quote online rather than calling a phone number. Even though about half of all Web quotes are closed by either an agent or call center representative, customers are equally using insurance company websites. Last month by the research company .

In 2010, a comScore report found that auto insurance companies delivered 37 million quotes, with almost 3 million policies purchased or 10% conversion. Compared to the study in 2009, that is a 3% decrease in total quotes and 1% increase in policies bought.

Quote volume increased over 300% from 9.5 million since 2006 policies bought online went up 50% by an additional 1.3 million.

Over 30% of people surveyed in a 2011 MSN Money-Zogby survey, rate Progressive’s customer service “poor.” Progressive has been around for over 8 decades and is the nation’s 4th largest auto insurer. They have an aggressive marketing campaign buying millions in on and offline advertising, direct sales, innovative customer options and competitive rates.

But Progressive Insurance has been alleged to make customers discuss use low-cost auto shops, get inadequate repairs, or low ball reimbursements. Progressive responded with a Forrester Research award for the company’s customer feedback.

In the J.D. Power 2010 customer-satisfaction index, Progressive won a 775 score, below the average score of 777 out of 32 US auto insurers. Progressive profited over $1 billion profit in 2010.

Farmers Insurance Group was founded 80 years ago as a customer service oriented company. But in 2011 MSN Money-Zogby poll, over 29% called Farmers’ customer service poor. Further inquiry reveals Farmers drops customers, refuses claims, and employs unresponsive adjusters. State of Washington Insurance regulators intervened with Farmers Insurance refused a claim because an at fault driver had road rage.

Farmers Insurance declined to respond specific polling results, sent a written statement in which it questioned its inclusion in the survey because the Farmers brand has exclusive agents in only 30 out of 50 states. The Farmers Insurance Group has different affiliations to distribute insurance, under different names, like 21st Century Insurance.

Farmers is the 3rd biggest home / auto insurer in the US, with over 20 million policies Nationwide. They are now owned by Zurich Financial in Switzerland.

In 2007, Farmers Insurance filed a request from the state of California to raise its rates because they improved rankings at J.D. Power from “below average” to “slightly above average” over the last 3 years.

After the California Department of Insurance denied the company’s rate increase request, the JD Power ranking dropped substantially. Farmers posted profit over over $1 billion in 2010.

30 states have enacted “readability laws” so you can comprehend your car insurance policies, which confuse most policyholders. Many don’t know what is covered and what isn’t.

If you’re uncertain what your auto insurance policy covers, call customer service at the insurance company or your insurance agent. They are supposed to make sure you understand your policy limits and exclusions. You don’t need to memorize every scenario of your car insurance policy, just understand what it covers in general and the policy limits. It’s important to get the right coverage, but if you can’t understand your policy, that may be hard to do.

You want to know what you are paying for. Too many policies have long lists of things or incidents that are covered or not. And some things aren’t listed at all.

Allstate Corp. agreed to buy Esurance along with Answer Financial for $1 billion from White Mountains Insurance Group Ltd. (WTM) to expand sales through the Internet.

CEO Thomas Wilson is seeking to add customers through direct channels such as the Internet as younger consumers avoid agents. Allstate has lost auto-insurance customers for the past 3 years as netsavy shoppers enroll with smaller competitors Progressive Corp. and Geico.

Answer Financial, which allows clients to compare quotes and buy insurance through its Web site, and Esurance will maintain it’s brand and Allstate will be used with customers who want a live agent.

Allstate’s auto insurance business has been flat for the 12 months ended March 31. Progressive’s personal auto insurance policies rose over 5% in one year. There was 9.6% percent increase in customers signing up through the Internet and telephone.

Esurance has been spending more money on claims and expenses than written premiums. Allstate can limit Esurance’s claims costs and adjust their underwriting.

USAA is sued again over using a “cost containment program” to improperly lower medical claims payments to policyholders injured in car crashes.

The latest claims against the San Antonio financial and insurance company were made in a federal lawsuit filed this week in Oregon.

The lawsuit, which seeks national class-action certification, charges that USAA uses an outside auditor to assess claims and to “uniformly conclude that medical treatment was not needed.”

USAA denies the allegations.

USAA previously settled two class-action lawsuits that accused it of using flawed data to arbitrarily deny a portion of the medical benefits for injured customers who have personal-injury protection (PIP) or other medical-payments coverage on their USAA auto-insurance policies.

One of those cases, filed in Arizona, was settled last summer. Claims are still being processed, so the amount to be paid out under the settlement hasn’t been determined.

The other case, filed in Illinois was settled in 2005. Lawyers for the plaintiffs valued the settlement on their website at $35 million, a figure USAA spokesman Paul Berry called “probably wildly” inflated.

USAA settled the two cases because it was the “right thing to do for our membership,” Berry said. He noted both courts endorsed USAA’s bill-review practices.

“We pay all reasonable, necessary and accident-related bills,” Berry said. “That doesn’t mean we pay all bills. If you had injuries or you received some treatment that had nothing to do with (an auto) accident, we’re not going to pay those bills.”

USAA relies on Alabama-based Auto Injury Solutions to help review medical bills to determine whether they are reasonable and necessary and to weed out duplicative and fraudulent claims. Bills deemed suspicious are reviewed by a doctor or other health-care professional, Berry said. Even when one of its doctors concludes the medical care wasn’t necessary, the bill still goes through several other reviews, he said.

USAA also can choose to override any instance where a bill is rejected, Berry said.

In the latest Oregon lawsuit, four unrelated USAA customers in separate accidents allege the medical reviews were a “sham.”