Insurance Companies

My mom was pulling into a parking space, & the side of her car accidentally scratched the side of a car parked next to her. The car’s owner appeared, & they exchanged info. It turns out the cost to fix the other car’s paint job was between $800-$1,000. My mom’s insurance company told her that if the cost of a repair is more than $750, then her rates will be raised. So, now, for the next THREE years, her rates will be 10% higher!

Does this strike anyone as EXCESSIVE? Or is this pretty much how it is? I mean, it’s not like she totalled the other car in a traffic accident! All she did was scratch the paint of a parked car! And the cost wasn’t all that much more than $750 anyway! PLUS, my mom’s been driving for more than 40 years, with a PERFECT driving record & NO insurance claims in all those years.

I don’t get it. It seems like the "punishment" doesn’t fit the "crime". Are most auto insurance companies this arbitrary & strict the first time you have even a small claim??
P.S. When I said excessive, I mostly meant the 3-year "penalty". I’d understand if they raised her rates 10% for just 1 year. But for THREE years? For such a small claim? And after 40+ years of a SPOTLESS insurance record?
Actually the insurance agency involved is CSAA (California State Automobile Association), which is part of AAA (American Automobile Association, a.k.a. "Triple A").

I never thought anything would happen with this company that would make me feel upset with them, because all my dealings with them have been great, as are their rates and agents. I’ve had them about 17 years and my mom, as I mentioned, has had them for 40+ years. We always thought they were the "best". I’m disappointed and confused now.

The time period is strange as well as there being a 750 limit to cause an increase. I would say it is definitely time to look for another insurance company. 10% increase over 3 years? What are the premiums now? Sounds like that she would better to pay out of pocket if she has the money. Figure out how much it will cost for the higher premiums verses out of pocket. The funny part (or not so funny) is the insurance company will probably negotiate a deal with the body shop and pay less than the 750.

Look at quotes online and do some research because it also could be that she is not covered well enough. Stay with mainstream insurance places and also check brokers as well because I know I have unfortunately had 3 claims in the past 4 months and not one increase. None were moving violations one was vandalism one was theft and one was flood damage but I honestly thought my insurance would rise.

I am tring to refinance my auto loan , but the only place that I came across is StateFarm. Are there any other places that I can look into?

Local banks, credit unions.

Because most people don’t know that, so they believe his every word.
Sorry to say!

There’s many criterias insurance companies factors in for price. Here are a few (in no particular order)…

- Driving record

- Age

- Years licensed

- Vehicle

- Zip code

Some companies will specialize in certain risks. For example, Company A specializes in younger drivers while Company B specializes in older drivers, and the prices reflect that. They usually file with the state’s Department of Insurance, and the insurance company will state their case to them, and the DOI will determine whether the pricing is fair for other carriers to compete with.

I am in Atlanta and was told the cost for the surgery was $16K without insurance. I figure they will negotiate the final cost but was wondering what the typical insurance negotiated rate was.

Each insurance company has it’s own rate that they pay and most or the same but there is others that pay cheaper. It just depends on the insurance company. Mine was charged $8,000. but only paid $1590. that was the doctor and my hospital bill still hasn’t been determined because they charged me things for the 4-15-08 and I wasn’t there the 15th, I entered on the 16th of April and I have protested the hospital bill and I still haven’t heard from them and it has been two months. That bill will be around $1000. I do ask for an itemized statement, a lot of people don’t and they end up paying for something they didn’t get. I am in the Dallas, Texas area. Good Luck!

Hi, I’ve got a general question about car insurance companies.

Do companies really charge more to insure a 2 door car versus a 4 door car? I understand the whole 2 door=sports car theory, but not every two door is sporty. Does it really make that much difference?
For instance, there’s a 2001 Chevy Cavalier 2 door in my local newspaper for $2500. Would my parents pay more for insurance coverage on it than if it was a 4 door Cavalier? As far as I know, this one isn’t a Z-24–it’s just a run-of-the-mill Cavy.

Thanks in advance!!!

Insurance rates are calculated with complex algorithms that take into account lots of factors and information. I really doubt an ‘01 Cavalier, be it a two door or four door, will change your rates enough to even notice. Just because it’s a two door does NOT make the car faster but long term information crash data might show that young drivers in two door Cavaliers crash more often than young drivers in a four door. Who knows? Like I said before, I seriously doubt the rates would chance much if at all on a seven year old car.

In other words, if i had a accident (hey, anyone can have one, no matter how cautious or good of a driver we are), My car gets broken into or stolen, or maybe im a young teenage driver these things would all be taken into account if i went out to get a new auto insurance policy. They would be considered "Pre-Existing Conditions" and effect the rates of my insurance, or cause a company not to offer me insurance or to drop my insurance all together.
Point being, we accept this with auto insurance, why is it so wrong for insurance companies to do the same with medical insurance?
Another thing, i cant buy a car which already has a huge dent in the door, then turn it into my insurance and expect them to fix it. This would be considered a Pre-Existing Condition. Why should a medical insurance company be required to offer insurance to someone who already has cancer?
I for one have a great driving record, yet my auto insurance is much more than my medical insurance.
Will we get auto insurance reform as well??

I see your point…so how about when Auto insurance tells you it costs more to fix the car than what it is actually worth (i.e. its "totalled")

Sounds like the rumored "Death Panels" ehh?

I read a story that says that insurance companies are trying to base their rates for car insurance on your credit rating, age, and gender etc. Is that right/do you agree or disagree with the practice,
what do you think the right way is to determine insurance rates etc?

Yes—BUT they incorporate credit history because there is risk involved in receiving payments. College grad. is also a factor–WHY.. I don’t understand that. I’m sure there are other apparently "stupid" factors but ask their underwriters….

Candidates running for "Insurance Commissioner" Office, promise us to "lower our Insurance rates". Do you think they will be able to?
Where the money Insurance Companies will have to give up will come from?
Premiums we pay, goes to fund 2 basic cost. 1. Administrative expenses ( Company Profit, advertising, comissions,etc.)
2.To pay for their claims.
Do you think Insurance Companies searching for a method so they won’t get as many claims, or planning to pay less when they get one?
Do you think we may have to give up some coverages or benefits,so we won’t pay as much premiums?
I wish each politician will tell us how they planning to "lower" our Insurance rates, and how they will finance their promises.

Learner

No, they won’t.

What happens to insurers when they get pressure from states to lower (or not raise) insurance rates is that they usually will go along with it for a while and when they realize they are either losing money or not making their financial goals….they will begin to not sell anymore insurance policies in that state.

When companies start to leave the market….usually the lower cost companies go first…..which means that the fewer competitors left all have higher prices….

So, in effect, for those who were with a lower cost competitor which is now gone….the only choice left is higher cost companies.

So consumers who were with a cheaper company now get a big increase in premium costs…..exactly opposite what the politicians said they’d do.

As more and more insurers leave the market….there becomes a shortage of insurance (called a ‘hard’ market)…..if the market gets too hard….states are forced to allow ‘excess and surplus lines’ carriers in to fill the void.

A well known E&S entity is the Lloyd’s of London Syndicate.

The problem with those lines of insurance are that because they are ‘excess and surplus’ lines carriers, they are not state regulated and therefore the state can’t regulate their rates.

So do you think those rates are any lower than what the state had before? Nope…the E&S rates are really high.

And sometimes when the E&S carriers won’t take on the risk….the state will have to form its own risk pool to self insure the rest of the market….

Which means taxpayers end up paying out the claims…..so the politician may have kept premiums down but what happens when claims go up in the state pool……you guessed it taxes have to go up to pay for it.

What’s a better system?

Well, competition has proven over and over again to lead to better products and better prices….

A better solution for lower premium rates is actually less rate regulation….not more.

Insurance companies exist to make a profit. Do you think they actually lower your rates after they get seat belt laws or smoking laws passed? No, it only benefits them by lowering their payouts. Quit falling for the insurance argument to lose your individual choice.

No,What are they gonna outlaw next? Planes trains and automobiles,beer,
Sugar,salt.