Archive for Auto Insurance

Auto insurance costs and where you live.

What’s driving the costs of your car insurance? It could be your driving record; at-fault accidents and speeding tickets won’t do you any favors. It could be the car you drive: A 20-year-old clunker is probably going to be cheaper than a brand new, foreign sports car.

These reasons all make sense, but many people don’t realize how much their location affects their rate. This was underscored by a recent survey done by Insure.com showing the most expensive and least expensive auto insurance costs by state. The full list is repeated below.

So why does it matter where you live when it comes to car insurance? You would think that car insurance rates by state would be fairly equal.

Auto insurance rates — insurance rates in general, in fact — are primarily based on risk such as:

  • What are the chances (risk) that a particular insured person will make a claim?
  • What is the risk that a particular situation can cause a claim?
  • What is the risk that a claim on an insured can be very costly?

Location matters because it can vary the amount of risk an insurance company projects. For example, hailstorms can cause significant damage to vehicles. Thus, an insurer may charge a higher rate if you live in an area where hailstorms are frequent. Or, perhaps you live in an area with a high rate of car theft and break-ins. The risk that you will make a claim goes up, and most likely so does your rate.

According to the Insure.com article, uninsured motorists are one of the big factors affecting rates. You see, most states require some sort of uninsured/underinsured motorist coverage when you buy a policy. So if a driver causes an accident and doesn’t have liability insurance (which is also required by law), your policy will provide some coverage to your vehicle and passengers that would have been covered by the other driver had he or she been insured.

As you can imagine, the more claims being made for uninsured drivers, the higher the risk and up goes auto insurance costs.

So, states with a higher number of underinsured and uninsured motorists are going to have higher rates. Also, states where more personal injury claims are filed are also going to drive up costs. The article notes that the economic downturn has caused many people to forego auto insurance. But when someone drives without insurance, we all pay the price.

Here is the list of the most and least expensive states for auto insurance in 2011 based on average annual premium (source: Insure.com):

  • Michigan, $2,541
  • Louisiana, $2,453
  • Oklahoma, $2,197
  • Montana, $2,190
  • Washington, D.C., $2,146
  • California, $1,991
  • Mississippi, $1,896
  • New Mexico, $1,837
  • Arkansas, $1,836
  • Maryland, $1,807
  • North Dakota, $1,794
  • Connecticut, $1,786
  • Rhode Island, $1,747
  • Wyoming, $1,714
  • Hawaii, $1,707
  • South Dakota, $1,707
  • Georgia, $1,670
  • New Jersey, $1,663
  • West Virginia, $1,633
  • Kentucky, $1,629
  • New York, $1,627
  • Minnesota, $1,614
  • Washington, $1,584
  • Missouri, $1,563
  • Indiana, $1,518
  • Colorado, $1,508
  • Texas, $1,492
  • Delaware, $1,489
  • Florida, $1,476
  • Nebraska, $1,470
  • Pennsylvania, $1,468
  • Kansas, $1,461
  • Alaska, $1,454
  • New Hampshire, $1,334
  • Massachusetts, $1,328
  • Idaho, $1,325
  • Alabama, $1,306
  • Oregon, $1,306
  • Nevada, $1,300
  • Illinois, $1,290
  • Arizona, $1,280
  • Utah, $1,272
  • Virginia, $1,237
  • Iowa, $1,179
  • North Carolina, $1,154
  • Ohio, $1,152
  • Tennessee, $1,146
  • Wisconsin, $1,128
  • Maine, $1,126
  • South Carolina, $1,095
  • Vermont, $995
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    Best car booster seats for kids reviewed in recent test.

    Child booster seats are necessary to help safely restrain a child in seat belts that are normally designed for adults. According to recent testing by the Insurance Institute for Highway Safety (IIHS), they’ve come a long way in improved fit.

    According to the IIHS, booster seat safety comes down to how well the lap and shoulder belts are positioned on average booster-age children in most automobiles. Lap belts should be across the child’s upper thighs, and shoulder belts should lie along the mid-shoulder. The belts should not be riding up on the child’s tummy, against their neck or falling off their shoulder.

    What the IIHS found was that for the first time in their testing, there were more products with top booster seat ratings than ones that they don’t recommend. This is good news for parents, because it probably means there are more choices out there to help them find the best booster seat.

    If you already have a seat but it doesn’t fit perfectly, you should keep using it until you can get a better one. The IIHS notes that children age 4 to 8 who ride in boosters are 45 percent less likely to sustain injuries in a crash, than if they were in seat belts alone. That’s significant.

    You can read more about the IIHS review and their ratings here.

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    Car insurance prices can be compared just like any other shopping trip.

    Doing an auto insurance comparison is like any other shopping comparison. The motivation of course is to find the best value or lowest price. With auto insurance, the idea of “value” includes price, customer service and satisfaction.

    Think about it: We all use that idea of value when we shop for a lot of products and services. If you’re looking for a good car mechanic not only do you want the lowest price, you want fast, friendly service and satisfaction that the job was done right.

    Shopping for a good auto mechanic can take a lot of work; making phone calls, driving around to get estimates, seeking out referrals. Fortunately, comparing car insurance costs is much easier — especially with the Internet. Yet, many people don’t take the little amount of time to shop around.

    It’s easy to get an almost instant car insurance quote either directly from a company or an agent. Get three of four from different companies and you’ve done your comparison shopping. Just like that you’ll find the best value — or confirm you already have the best value — and potentially save yourself hundreds of dollars a year.

    If it’s been awhile since you’ve compared car insurance quotes, today’s the day to start.

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