5/3/2011 12:09 PM ET|
Worst places to buy car insurance
The reasons for high rates vary among states, but one thing is constant: Uninsured drivers are dinging the rest.
Michigan has the highest average car insurance rates in the nation, followed by Louisiana and Oklahoma, according to Insure.com's new national survey of car insurance premiums.
If you live in Vermont or South Carolina, you have access to the most affordable rates, saving $1,000 a year or more compared with drivers in the most expensive states.
Insure.com's study collected auto insurance rates from six large carriers for more than 2,400 vehicles, based on 10 ZIP codes per state. We then calculated averages nationally and for each state.
The reasons for high prices vary considerably among states, but one thing is for sure everywhere: Uninsured drivers are dinging the rest of us.
The big picture
When a state has a large proportion of uninsured drivers, insurance companies aren't able to spread their risk sufficiently. Uninsured drivers aren't paying their share, yet they're still crashing and causing damage, passing the buck to drivers who then make claims on their uninsured/underinsured coverage.
In Oklahoma, 24% of drivers were uninsured in 2007, the fourth-highest rate of uninsured motorists in the country, according to a 2009 study by the Insurance Research Council. Michigan had the ninth-highest rate of uninsured motorists, at 17%, according to the IRC, while Louisiana ranked 27th, with 12% of drivers uninsured.
Despite laws requiring liability insurance in 49 of 50 states -- New Hampshire is the exception -- the numbers of uninsured have likely grown along with the unemployment rate.
"It's more of an economic problem than anything else," says Marc Eagan, the president-elect of Independent Insurance Agents & Brokers of Louisiana, and president of Eagan Insurance Agency in Metairie and LaPlace, La. "They just can't afford the rates."
Michigan car insurance rates pounded by injury costs
The average annual car insurance premium in Michigan increased by $443 from last year's survey, enough for the state to rise from second place to first place and knock Louisiana down to No. 2.
The reason it holds that No.1 spot: Michigan is the only state that guarantees unlimited personal injury protection (PIP) payments to people injured in car accidents. Insurance carriers pay up to $480,000 of PIP benefits; the Michigan Catastrophic Claims Association, a private, nonprofit organization created by state law, reimburses insurers for costs above that amount. Auto insurers also must pay for up to three years of lost wages and replacement services.
Car insurance premiums in Michigan include an annual assessment by the association to pay for medical care when people suffer catastrophic injuries. The assessment through July 30 this year is $143.09 per insured vehicle. And that doesn't include what drivers have to pay for required PIP coverage.
"In some cases, the cost of unlimited medical coverage will be 50% of the entire premium on a vehicle," says Jon Spalding, the president-elect of Michigan Professional Insurance Agents Association and president and CEO of Spalding Insurance Agency in East Lansing and Perry, Mich.
Spalding says Michigan's car insurance law also has some expensive quirks.
Motorcycles are not considered motor vehicles in Michigan, so motorcyclists aren't required to purchase auto insurance -- only minimal liability coverage in case they injure someone or damage property. But as long as they buy the state-required liability amount, they can still collect unlimited medical benefits if they're injured in an accident with a car. In that case, the car driver's policy would pay out first.
"If a high-powered motorcycle ran into me from behind and went over my car, my insurance would provide unlimited medical benefits for the motorcyclist," Spalding says.
While motorcyclists represent about 2% of the assessments paid into the Michigan Catastrophic Claims Association, they account for 7.3% of claims.
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I'm 43 years old have been driving for 27 years. I've had no accident and had two speeding ticket when I was 18 years old. Why should I have to pay the same amount as someone who has had accident. I don't fill this is fair in any way. I keep paying for other people to drive stupid. Does this sound fair. The insurance company says o well pay it or loss your license for not having insurance. The are a big rip off. They need to charge it to the people who have the accident's not the ones who have very good driving records.
Car insurance is based on several factors; Age, were you live, type of car, VIN #, your driving record, and the other people around you and there driving records.
I have always felt that car insurance is a crock of S**T! Most of us shell out a ton of money to the insurance companies and have clean driving records, and do not see a return at all. I think that if you have a clean driving report that the insurance companies should reimburse you 75% of what you paid to them every year, am I right, they are still making a profit from you, but at the same time they are not robbing you blind. I am sorry but paying for something i do not use is bull****, especially Liability insurance. All it is good for is a crash and nothing else! If I don't have an accident then I should get most of my money returned to me minus a small fee, 25%. Plus the fact that the insurance companies have made it so that you HAVE to be covered to Legally drive your car is crap, plain and simple. I am sorry but if I own my car then I should be able to do what ever I want with it. Isn't this supposed to be a free country. If I hurt someone then I take responsibility for it, and for all the a**holes that take advantage of the loop holes in the legal system and sue someone for everything they have. YOU SHOULD BE ELIMINATED FOR THE GOOD OF SOCIETY!!!!!
It's ironic when you think about it, all the things that we are required or have to buy keep going up and because of that the things that we would "LIKE TO BUY" we can no longer afford because everything else costs so much. Based on that our economy will never improve. The wants are the things that stimulate our economy and show economic growth but because everyone is spending all their money on the neccessities there is nothing left to do the fun things or buy the wants.
Jobs also are a problem obviously in this country with all the layoffs. Those companies that are hiring see an opportunity to pay their new employees less because of the high unemployment rates which leads to more people in the work force making less thus not being able to afford the wants once again. Those who did not get laid off in many instances are forced to take pay cuts in order to keep their jobs. Many of whom can no longer afford to buy the extra's or possibly pay for what they currently have. Meanwhile the execs that helped to destroy our economy are still getting their fat bonus's all on the backs of the non existent middle class. It must have been nice to grow up in the 40's and 50's and be able to afford to support your family, buy a house, car, food, clothes and maybe even send your kids to college. I'm sure they had their economic hardships back then, but when inflation and cost of living expenses get to the point that practically everyone in the country is living check to check we definitely are going to be in trouble or should I say already are in trouble and I'm really concerned about my children and grand children. It appears that the middle class and American dream is only available for the wealthy, unfortunately it's on the backs of the middle and lower income brackets. Retirement, what's that, most of us will be forced to work until we're 80 or dead, that's the new American dream and I'm so not looking forward to it.
This so called global economy that we were forced to adhere too is part of our demise. Why didn't they call it what it actually was "SELLING YOUR JOBS TO THE LOWEST BIDDER OVERSEAS." Once again an effort by the upper management to eliminate your job and line their pocket with more of your hard earned money. Of course when they do their books they will make it appear as though they lost money still which in turn will not boost the economy any or allow for any pay out to their investors or the government tax obligation, then they will lay you off and hire a few more people overseas. The whole idea is designed to keep you strapped and keep you down. Economic prosperity will not recover unless our entrepreneurs start giving a damn about their employees like they did back in the early days of the industrial revolution. Back then they gave a damn and oddly enough showed a profit, why can't they do that now, oh yeah, doesn't benefit them and 100 million dollar bonus's weren't awarded back then. Repeal NAFTA, put Americans back to work and start investing in America is the only solution. I'm tired of taking care of or policeing third world countries on my coin. Give me a job and a chance to succeed and invest in our future and our economy will prosper and the value of the dollar will recover.
Insurance is nothing more then an italian style mafia strong arm. "pay us a monthy fee and we'll give you selective help".
What a croc.
I think it is unfair when the insurance pays a claim rather than fight it because they feel it would be cheaper. So, they don't even protest a claim. No problem, except that they raise my rates based on having had to pay the very claim they didn't want to fight. Where's my say in all this?
And the government thinks they can fix things by mandating insurance (health or vehicle), but isn't that just a license for runaway rates, unless it goes hand in hand with insurance reform?
Also, the practice of raising rates based on a negative credit report is the worst possible thing to do. The poor schmuck can't pay his bills because he lost his job, and then can't even drive to find a new one because he can't afford his new insurance rate. Talk about being squeezed from all sides. If someone bumps into one of my cars, my first thought after checking to make sure no one's hurt is: I hope they have insurance, and the second is, if they don't what's that going to do to my rates? I feel held ransom.
We live in Michigan. 10 years ago, my wife had an accident and badly injured her leg. STATE FARM paid for her medical treatments for 2 years, when we got yet ANOTHER adjuster (the 5th one in 2 years) who misread my wifes medical history, and concluded that WE were pulling a fast one on them.
This lady (because I know I cant say ****) Turned the doctors reports around, to show, we were treating an existing injury. SATE FARM them THREATENED to TAKE OUR HOUSE if we continued to pester them.
My wife has now has to live with pain from an AUTOMOBILE accident, that SHOULD be covered by STATEFARM, BUT we are OLD and CANT fight back against a HUGE company, LONG KNOWN for SCREWING their insured people!
Like their T.V. ads say,"Like a good neighbor, State farm is there" What they dont mention is "READY TO **** YOU WIFE, THE MINUTE YOUR GONE!"
In 1985 we moved from Vermont to Arizona and in Arizona our insurance company had this policy for uninsured motorists. My first thought, are you nuts? But after a little explaining to me I signed up. A month later I bought a beautiful new 1986 Monte Carlo SS off of the show room.
Then I was t-boned in the parking lot at work and the other driver had no current tags, inspection, drivers licenses and of course no insurance.
Since then we’ve always had a policy for uninsured motorists. Now we live in Texas and I also love to hear in when an accident occurs and any person with out any insurance is liable for that accident even if they were not the cause.
Now with the new technology for law enforcement they will be able to scan the vehicle tags and see if the owner is insured or not. And this I fully support!
If they can’t afford insurance then they have no business driving on our roads and highways!!!!!!!!!
To me this is a privilege not an entitlement.
Dick (Austin TX)
The real problem is not so much the insurance companies as it is with individual state laws, all of the states mentioned and most states in general are what is called "no fault" states, that is basically to say that if you are in a wreck your insurance pays for your car and the other person's insurance pays for thiers, any other damages, Personal or losses have to be settled in civil court.
Ohio is one of the few states left that is what is called a "liability" state whoever is at fault and therefore cited in the accident, thier insurance has to pay for both cars, this is what is known as "Fair", a concept not understood by insurance companies, they would rather put thier confidence in thier lawers and hack it out a settlement in court.
In states like Ohio, if you get rear-ended you pay nothing, at all! the other driver's insurance pays for your car, your injuries, your lost wages etc. and insurance companies can,t fight it, the cited party is guilty, case closed.
Therefore bad drivers get really crappy rates and good drivers can get really good rates.
This makes people want to be better drivers, I use myself as an example, I am 49 years old, no tickets in 18 years, no accidents that were my fault, I have full coverage on two vehicles and it only costs me $59.00 a month.
Insurance companies hate Ohio.
@Someone, do yourself a great big favor, and get away from State Farm!! I had "home owners" insurance with them several years ago, when my house burned down. My home was insured for $108k, the check I got was for $68k!! The "contents" of my home was insured for "full value", but I only got 50% of the value!! You would not believe the hassle I went through trying to collect on my policy! To make it short, after "7 months", and me hiring a lawyer to hurry them up, I finally got the check for $68k, a FULL $40,000.00 short of the policy I had been paying on!!!! The funny thing though is, right after we settled, they sent me a "monthly premium bill" for my home owners insurance!!! Needless to say they didn't get it!!!
My Car was stolen out of my driveway last year keys not in it and because it was not in a garage or car port something attached to the house even though we own he land they refused to pay for it Citizen Homeowners Ins.
What are people surpose to do if they own there own home and not wealthly enough to own a house with a car port or garage.
Thank God my car was found four months later on Thanksgiving Day something to really be thankful for but that seems like a very unfair loophole at my Insurance Company has so they don't have to pay.
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