State Farm, Progressive, Allstate and other insurers are tripping over each other with ads that promise to Americans to save money on your auto insurance. Drivers can be forgiven for wondering what the catch is.
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Of course, not all drivers can save 15 percent, as a promise of safe, but many are finding significant discounts. This year, auto insurance premiums will rise only 1.5 percent on average across the country, a group of industry trade estimates, the smallest gain in five years. Although the costs of vehicle repair and medical care as a result of collisions are on the rise, says the group, which are tempered by fewer accidents in all legislation and improvement in many states to combat fraud.
"This has really become a competitive industry, so insurance companies are anxious to do everything possible to get more business," said Jean Salvatore, senior vice president of the group, the Insurance Information Institute.
Stephen Reginald, 47, a book editor in Chicago, took a persistent State Farm agent who was driving the policy owner to convince him to change his insurance Honda Accord 1993. Mr. Reginald, who says that the units only when traveling out of town, had been with Progressive, the insurer's third-largest automaker, since 2002. He chose the Advancement of principle, he said, because of the convenience of using your site after hours. But Mr. Reginald was able to save about $ 200 a year by making the switch to State Farm. "It's great to have someone local," he said.
Some recent decreases in the cost of premiums can be traced to the actions of state regulators. Most states require insurers to file rate plans annually in a process that is reviewed and approved or rejected by the state insurance commissioner. "It is the job of insurance commissioner, using modern data resources to see if the fees are a threat to inflate the market too much or put undue stress on the reserves," said Tim Wagner, president of the commission National Association of Insurance Commissioners, an organization of state regulators. He is also director of the Nebraska Department of Insurance.
When Howard Mills, Superintendent of Insurance of New York, was a reduction in fraud rates steadily over the past two years, he said, showed that auto insurance rates to reflect the change. Mr. Mills met with insurers to discuss the reduction of the rate and, consequently, 70 percent of auto insurance customers in the state have had their premiums reduced by 5 percent on average since last year.
New Jersey Department of Banking and Insurance revised its auto insurance regulations in 2003, after more than 40 insurance companies left the state during the previous decade. Since then, 56 percent of auto insurance policyholders have experienced rate decreases, totaling more than $ 300 million in savings statewide, according to the 2005 report of the auto insurance industry issued by the insurance department.
Car owners often consider changing insurance provider when their policies are up for renewal or need to add a driver or buy a new car. That gives insurers the opportunity to find new customers. Hence the flood of ads for the promotion of lower premiums.
"Overall, people renew with your current carrier, so insurers are trying to encourage people to compare and strength in a competitive market," said Mark Presser, assistant superintendent and chief of the office of the State of New York Department of Insurance.
Rates may drop to a variety of reasons. Texas, for example, has made some recent progress in combating fraud, which will most likely accelerate the decline in rates. And thanks to some changes in state law in 2003, most auto insurance companies doing business there. The new entrants have "increased competition, which has helped reduce taxes on everything," said Texas Insurance Commissioner Mike Geeslin.
The increased competition worked for Steve Gulledge's when he began pricing insurance while purchasing a new car. Mr. Gulledge, a musician in Spring, Texas, had his eye on a used Audi TT, but opted for a less sporty sedan when he discovered his car insurance in the Audi cost more than your car payment.
After weeding through offers and features like towing and rental car coverage, Mr. Gulledge, 24, found a couple of companies that exceeded the actual quote from his State Farm agent. Ultimately, he said, was able to convince his staff to sweeten the deal, giving him a loyalty discount and ensuring that as long as your driving record remained clean, his rate would drop $ 50 a month you turn 25 years at the end of the year.
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