Auto Insurance Rate Quotes – Does Your Zip Code Affect Your Auto Insurance Premiums?

Ricky Lee

October 29, 2008

In most cases, people know the reasons why their home insurance is affected by the zip code they have. But, they usually don´t understant what impacts their rate when it comes to auto insurance.

If you do understand this, you will be able to save money when buying a home, as you will understand how saving a few hundred bucks on your house can end up costing you a few thousand dollars in auto insurance in the next few years.

Below you can find out how:

1. The place where you buy your house determines in most cases what mileage you make every year. If you don´t live near the places you usually go to (and you have to drive there) your mileage will go up because of this.

Your job is the best example: if your job is 10 miles from your home and you do that trip five times each week, you will drive twice as much as someone who has their work place only 5 miles away.

Also, the area you choose to live in will determine if you have a mass transit access in the vicinity. Using it as often as possible will help get your rate down.

2. What´s the crime rate in the area where you reside? Low or high? The auto insurance rates are also partially influenced by this factor. If you live in a dangerous area, the risk of vandalism and theft is higher, and the rate increases accordingly.

So, when you´re in the market for buying a house, take into consideration these issues, as they can increase your expenses in auto insurance premiums if you ignore them.

You should also compare all the information you have on the insurers that are disposed more favorably to the zip code you live in. Their rates can vary.

So, if you´re looking for a house, a good tip would be to compare the auto insurance quotes for a number of zip codes and see what the differences are. If your zip code adds an extra $250 to your annual premiums of the auto insurance, in 20 years you will be paying a total of $5,000.

Discover the best car insurance rate quotes online. Visit my auto insurance rate and learn where to get instant car insurance quotes.

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La. residents can compare rates for auto, home insurance online

Louisiana automobile and home owners can now get quotes on insurance from their computer.

Insurance commissioner Jim Donelon announced Monday that auto and homeowners rate comparison guides are available at the Department of Insurance Website, www.ldi.state.la.us.

The rate guide provides quotes from top carriers of auto and homeowners insurance in the state, Donelon said.

The auto quotes reflect various rating situations, such as driver and vehicle age, location and driving record. The homeowners quotes reflect situations such as the location, age and price of the home.

To access the guides, visit www.ldi.state.la.us and click on publications, guides and forms near the top of the screen. The guide includes links to each company.

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District of Columbia Pays Highest Insurance Rates to Drive

Drivers in the District of Columbia pay the highest combined average automobile insurance premiums in the United States, taking the top spot from New Jersey.

The National Association of Insurance Commissioners has released its 2005/2006 Auto Insurance Database Report, which indicates the District of Columbia leads the auto insurance pack with a combined average insurance premium per vehicle of $1,315.55 in 2006, down from $1,345.58 the year prior.

The state combined average premium is calculated by summing the average premiums for liability, comprehensive and collision coverages. The result is the average price for a policy that contains all three, the NAIC said.

The drop in premiums in D.C. wasn''t enough to keep New Jersey in the top spot among the most expensive auto insurance regions. The Garden State had a combined average insurance premium of $1,284.43 in 2006, down from $1336.80 in 2005.

According to the NAIC report, the rest of the top five regions in most expensive auto premiums for 2006 were: Louisiana, with $1,254.66; New York with $1213.14 and Rhode Island, with $1197.81.

Throughout the United States, rates have continued to fall, according to the report. The combined average premium nationally was $936.60, down from $954.02 in 2005 and $967.28 in 2004.

According to the report, Iowa had the lowest combined average auto premium in 2006 at $644.49, followed by North Dakota with $688.58.

The NAIC cautions against state-to-state comparisons because many factors affect a state''s average premiums, such as underwriting costs, accident rates, traffic density, auto theft and state regulation.

In 2007, the top five writers of private-passenger auto in the United States, according to A.M. Best Co state/line product information based on direct premiums written, were: State Farm Group with a 17.5% market share; Allstate Insurance Group, with 11.3%; Progressive Insurance Group, with 7.3%; Berkshire Hathaway Insurance Group, with 7.2%; and Farmers Insurance Group, with 5.5%.

(By Chad Hemenway, associate editor, BestWeek: Chad.Hemenway@ambest.com)

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Auto Insurance Industry Overlooked $16 Billion in Premium Losses

Premium Rating Error Report by Quality Planning Concludes Auto Insurers Could Boost Profits by Paying More Attention to Miles Driven by Customers

Last update: 9:00 a.m. EST Dec. 4, 2008

SAN FRANCISCO, CA, Dec 04, 2008 (MARKET WIRE via COMTEX) -- Quality Planning ( www.qualityplanning.com), the ISO company that validates policyholder information for auto insurers, today released its annual premium rating error report. Quality Planning estimates that these errors resulted in the loss of $16.1 billion of auto insurance premium revenues in 2007, slightly down from the 2006 figure of $16.6 billion -- but still almost 10 percent of the total $162 billion in personal auto premium written. Two primary reasons are identified for rating error: consumer fraud and the inability of insurers to keep track of key lifestyle and driving habits of their customers.

The report, titled "Auto Insurance Industry Continues to Hemorrhage Cash," can be found online here: http://tinyurl.com/6mtf3c.

"The year 2007 saw the first decrease in auto premium leakage since Quality Planning began issuing this industry report five years ago," said Dr. Raj Bhat, president of Quality Planning. "We believe this is likely the cumulative effect of several large insurers eliminating the mileage component from their rating plans."

"Seldom is there debate over whether or not people who drive more miles should pay higher premiums, yet over the past several years some companies have elected to forgo the use of annual mileage as a critical rating factor -- simply because it was difficult to validate," added Bhat. "Their decision may prove costly."

The report aggregates and summarizes audit results of more than 4 million policies from 16 major carriers. The sample includes substandard to preferred books of business, all distribution channels, and national and regional carriers.(1) Sample results were weighted to reflect the total national private passenger auto line.

In this year's report, Quality Planning noted a small upward trend in the misreporting of garaging addresses and of youthful drivers. The trend was most striking in large urban areas where vehicle garaging location can dramatically affect premium. Nationwide, 1 to 2 percent of all policies written include an unrated operator, who is most often a high-premium younger driver. Policies that contain such rating errors account for more than $2 billion of annual premium leakage.

"The insurance industry can combat premium leakage by applying appropriate analytic tools," said Bhat. "Some policyholders misrepresent facts, and others don't report lifestyle changes. Others boldly commit fraud. Underwriting doesn't have to accept those trends as a cost of doing business or, worse, as justification to counterbalance leakage by inflating premiums for all policyholders."

The 2007 report includes a detailed analysis that shows how different categories of rating error contribute to overall premium rating error and distinguishes between vehicle rating errors (mileage, usage, type of vehicle, and location) and driver rating errors (driving experience and driving record). Quality Planning recommends auto insurers better analyze policyholder rating data to identify and correct flawed information -- steps which could have a positive effect on profitability.

Rating integrity and competitive advantage

Quality Planning helps auto insurers minimize rating error. The San Francisco-based company processes auto insurance companies' books of policyholders through a battery of more than 150 proprietary tests, cross-reference checking, and pattern-matching algorithms to identify errors and discrepancies that might suggest customer fraud. Quality Planning also provides insurers with additional services, such as policyholder phone interviews to discover missing drivers, verify garaging addresses, determine annual mileage, and other key rating information. Over time, insurance companies with accurate rating information are better able to compete and are more financially stable.

About ISO

A leading source of information about risk, ISO provides data, analytics, and decision-support services to professionals in many fields, including insurance, finance, real estate, health services, government, human resources, and risk management. Using advanced technologies to collect, analyze, develop, and deliver information, ISO helps customers evaluate and manage risk. The company draws on vast expertise in actuarial science, insurance coverages, fire protection, fraud prevention, catastrophe and weather risk, predictive modeling, data management, economic forecasting, social and technological trends, and many other fields. To meet the needs of diverse clients, ISO employs an experienced staff of business and technical specialists, analysts, and certified professionals. In the United States and around the world, ISO helps customers protect people, property, and financial assets. For more information, visit www.iso.com.

About Quality Planning Corporation

An ISO business, Quality Planning is focused exclusively on providing rating integrity solutions to auto insurers. Quality Planning works with insurance companies to identify areas of significant rating errors using sophisticated database management, statistical analysis and modeling, customized survey design, and highly targeted customer interaction. Quality Planning helps clients work within their existing rating plans and charge fair prices to policyholders based on a true representation of risk. The company was founded in 1985 and is headquartered in San Francisco. For more information, visit www.qualityplanning.com.

(1) The sample was limited to audits for which Quality Planning retained contractual rights to aggregate data for industry analysis.

Contact:
Tim Cox
Zing Public Relations
650-369-7784
Email Contact

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SOURCE: Quality Planning Corp.

 http://www2.marketwire.com/mw/emailprcntct?id=E26664B2C07A2253

Rating errors plague auto insurers

NEW YORK, Dec. 5 (UPI) --

Rating errors for auto insurance policies resulted in the loss of $16.1 billion in premium revenues in 2007, an industry research group said Friday.

Quality Planning Corp., which tracks information for the insurance industry, said the auto premium leakage declined from the $16.6 billion lost in 2006. However, insurers' revenue losses still came to almost 10 percent of the $162 billion in auto premium revenues for the year, the Insurance Journal reported Friday.

The year 2007 saw the first decrease in auto premium leakage since Quality Planning began issuing this industry report five years ago, said Raj Bhat, president of Quality Planning.

The decline came from the elimination of the mileage component from the ratings systems at several large companies, he said.

The Quality Planning report is an evaluation of more than 4 million policies written by 16 large insurers, the Journal said.

Some policyholders misrepresent facts and others don't report lifestyle changes. Others boldly commit fraud, Bhat said.

Underwriting doesn't have to accept those trends as a cost of doing business or, worse, as justification to counterbalance leakage by inflating premiums for all policyholders.

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NIC sees dip in auto insurance business

KOLKATA: The recession-hit automobile industry is impacting the business of insurance companies especially the ones for whom auto insurance constitutes a bulk of the business portfolio. However, there may be a rush by corporates to take terrorist coverage in the wake of India’s worst terrorist attack. Personal insurance coverage for such attacks are covered under the personal accident policy.

The Chairman-cum-Managing Director of National Insurance Company (NIC), V. Ramasaamy, said that his company did not have any exposure to either the Taj Mahal Hotel or the Oberoi Trident.

He said that the financial meltdown had not affected his company although auto insurance premium, which constitutes 51 per cent of NIC’s business portfolio might take a hit. “There has been growth till October but new vehicle insurance may be lower. We are therefore concentrating on renewals,” he said. Between April and October, NIC clocked a growth of 10.9 per cent with business touching Rs. 2,510 crore. The public sector insurer is confident of touching its target of Rs. 4,500 crore this fiscal which will represent a 11 per cent growth over 2007-08 when business stood at Rs. 4,024 crore. He said segments such as health had contributed handsomely to the business with a growth of 30 per cent and an income of Rs. 900 crore. Medical insurance had a 17 per cent share in NIC’s business.

Mr. Ramasaamy said that the 82,000 agents had been revitalised with an incentive scheme over and above their commission. The back assurance scheme which had generated Rs. 240 crore worth of business in 2007-08 through 26 tie-ups with leading banks, is set to see a jump by Rs. 50 crore. “There may be one or two more such tie-ups by march 2009,” he said.

Earlier, Mr. Ramasaamy launched a group mediclaim policy for Tower Infotech which will cover their 51,000 business associates to provide financial assistance during hospitalisation.

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IFA Insurance Company Now Accepting PayPal for Car Insurance Payments

IFA Insurance Company, a leading Car Insurance company, has added PayPal as an available payment method for IFA low cost New Jersey and Pennsylvania Auto Insurance. The integration of PayPal provides IFA customers an additional convenient and secure method to pay for their Auto Insurance coverage.

Clark, NJ (PRWEB) December 10, 2008 -- IFA Insurance Company, a leading Auto Insurance company, has added PayPal as an available payment method for IFA low cost New Jersey and Pennsylvania Auto Insurance. The addition of PayPal allows IFA to offer new and existing customers an additional convenient and secure method to pay for their auto insurance coverage.

IFA Insurance Company continues their leadership role in modernizing the process of evaluating, purchasing, and managing auto insurance. Providing an array of payment options is one of many new initiatives from IFA designed to make Car Insurance simple. PayPal has become increasingly popular with savvy online shoppers since their inception in 2001. PayPal now boasts over 160 million accounts worldwide. IFA was compelled to build the technology link to PayPal to allow customers an additional secure payment method.

David Walsh, President of IFA Insurance Company, knows that providing flexible payment terms and a number of different payment methods is what car insurance shopper's demand, "Beyond offering low Auto Insurance rates in New Jersey and Pennsylvania, IFA believes that the entire process of buying and managing a car insurance policy must be easy, flexible, and secure. Partnering with a great company like PayPal helps us to offer our customers the flexibility of choice and the simplicity of click to pay. Knowing that PayPal transactions are guaranteed secure makes them a perfect partner for IFA."

IFA Insurance Company is an independent, property-casualty insurer located in Clark, New Jersey. IFA specializes in writing private passenger auto insurance in New Jersey and Pennsylvania. IFA has been an auto insurance specialist since 1972. Setting up a low rate NJ Auto Insurance or PA Auto Insurance policy can be completed on the web, Auto Insurance Quote, or can be completed by phone with an IFA specialist at 877-432-0292.

For additional information about IFA Insurance Company contact Ken Conklin by phone at 877-432-2277.

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