Gary Easterling only has to travel about half a mile to get to work at Chapel Hill Pharmacy, which he has owned for the past six years off Texas Highway 64 just east of Tyler.
Not only does Easterling save money on gas, he also lives in a zip code that enjoys the Tyler area’s lowest average automobile insurance rates, according to a recent Texas Department of Insurance report.
In addition, his carrier, State Farm, has dropped his rates the past two years, the report shows.
“That’s nice to know,” Easterling, 50, said Monday from behind his pharmacy’s counter. “You just assume everything goes up.”
But while some carriers such as State Farm and Progressive have posted premium decreases the past two years, most have raised rates, with the average percentage increase of about 7.3 percent the past year.
Of the 37 providers that the Texas Department of Insurance lists for the Tyler-area market, 21 of them, more than half, raised rates the past year, according to www.helpinsure.com, a site run through state insurance department and Office of Public Insurance Counsel.
Some insurers’ rates increased by double-digit percentages the past year alone. Five insurers had no rate changes.
Industry representatives attributed the increases to a variety of possible factors, from auto crimes to medical costs to simple supply, demand and market competition.
A look at nine Tyler-area zip codes showed rates ranging from $522.73 for the 75707 zip code just east of the city to $529.67 for 75704 to the northwest. USAA County Mutual Insurance Co. posted the area’s lowest rate at $282, while Esurance Insurance Co. carried the highest at $1,012.
The rates were based on basic coverage for a married male between ages 25 and 65 with average credit and no traffic violations who uses a car to get between home and work.
Jerry Hagins, Texas Department of Insurance assistant director, said auto rates statewide went up about 5.5 percent the past year.
Hagins said average rates for the state were not immediately available.
Jerry Johns, president of Southwestern Insurance Information Service, an industry trade association, attributed rising auto insurance rates partly to an increase in medical costs.
“Various medical services play a huge role in determining automobile insurance rates,” Johns said.
He said auto thefts and burglaries also are factors.
Tyler, for example, saw 213 auto thefts in 2008, the highest in five years and a 43 percent increase from the 149 the previous year, according to Tyler Police Department figures.
Mitch Denson of Hilliard Box Insurance said that while some rates have gone up, overall it hasn’t been exorbitant.
“There’s always going to be adjustments, but they’re based on the number of claims filed,” Denson said. “What’s the most difficult thing to estimate is the number of bodily-injury claims.
“There will always be market adjustments from time to time.”
Hagins said the auto-rate increase also could be part of the industry’s natural cycle.
“We get hundreds of rate filings every year,” he said. “The majority are revenue neutral. There’s going to be movement up and down.
“In the auto insurance area, we’ve had some upward movement in the last year or two related to business cycles, not related to any particular event. The business cycle is prices go up, they even out and they go down again. Texas has had either low or decreasing rates for the past 10 years.”
He added that the increasing cost of auto repairs also could be a factor.
Hagins said fierce industry competition in Texas keeps prices in check.
“It’s an extremely competitive business in Texas,” he said. “A lot of that has to do with insurance reform passed two legislative sessions ago.”
As for why one company would charge as little as $282 and another more than $1,000, Hagins said coverage variables and clientele can be part of that.
“They all have their own business models, and they determine rates on what they feel would be projected losses,” he said.
Source
Saturday, November 28, 2009
Nevada Drivers Could Save Big Bucks Based on How They Drive with New, One-of-a-Kind Car Insurance Program from Progressive
Are you the poster child for safe driving, always leaving plenty of space between you and the car ahead? Or a business traveler who parks your car at the airport several days a week? Or maybe you have a car that you only take out for a spin on warm summer days. If so, your car is probably less likely to be involved in a crash, so shouldn’t you pay less for car insurance?
Progressive thinks so, and that’s why it’s introducing an optional car insurance program that offers lower rates on vehicles that are driven in less risky ways. The behavior-based insurance program, called MyRate, gives drivers a customized rate based on how, how much, and when their car is driven. It is now available to Nevada drivers who purchase policies directly from Progressive online or by phone.
“MyRate is designed for safe drivers,” said Richard Hutchinson, Progressive’s MyRate general manager. “It’s for people who drive fewer miles than average, at low-risk times of day and keep alert for others on the road. They don’t make fast lane changes or follow too closely behind other drivers so they don’t have to over-react or slam on the brakes.”
MyRate uses Progressive’s patented technology to put consumers in control of their auto insurance rates. Drivers who choose to sign up for MyRate receive a device that plugs into a port in their car and measures how, how much and when the car is being driven. Cars driven less often, in less risky ways, and at less risky times of day can receive a lower premium.
Drivers with more than one car can select which, if any, of their vehicles to enroll in MyRate. For example, a person with a second car that isn’t driven that often may enroll that car in MyRate but may decline to enroll their other vehicle if it is driven much more frequently or during higher-risk times of day.
New Nevada customers get an immediate first-term discount of up to 10 percent when they sign up for MyRate and, to cover the cost of the device and data transmission, a $30 technology expense is added to their premium for each policy term that they’re enrolled in the program. When they renew their policy, they could save as much as 25 percent or more, or be charged up to 9 percent more, based on their driving habits.
Drivers will be able to see whether they’re on track for a discount by reviewing their driving data anytime by logging in to their policy on progressive.com. They can see how their driving habits are affecting their rate, and, if they choose, make behavioral changes that could lead to savings.
Progressive has been an industry pioneer in understanding that how you drive should affect what you pay. Its initial foray into usage-based insurance started in 1999 with a program in Texas called Autograph. It then piloted its next generation of usage-based insurance, TripSense®, in Minnesota, Michigan and Oregon beginning in 2004. The new program, MyRate, will continue to be rolled out to more states in 2009, pending state regulatory approval.
Source
Progressive thinks so, and that’s why it’s introducing an optional car insurance program that offers lower rates on vehicles that are driven in less risky ways. The behavior-based insurance program, called MyRate, gives drivers a customized rate based on how, how much, and when their car is driven. It is now available to Nevada drivers who purchase policies directly from Progressive online or by phone.
“MyRate is designed for safe drivers,” said Richard Hutchinson, Progressive’s MyRate general manager. “It’s for people who drive fewer miles than average, at low-risk times of day and keep alert for others on the road. They don’t make fast lane changes or follow too closely behind other drivers so they don’t have to over-react or slam on the brakes.”
MyRate uses Progressive’s patented technology to put consumers in control of their auto insurance rates. Drivers who choose to sign up for MyRate receive a device that plugs into a port in their car and measures how, how much and when the car is being driven. Cars driven less often, in less risky ways, and at less risky times of day can receive a lower premium.
Drivers with more than one car can select which, if any, of their vehicles to enroll in MyRate. For example, a person with a second car that isn’t driven that often may enroll that car in MyRate but may decline to enroll their other vehicle if it is driven much more frequently or during higher-risk times of day.
New Nevada customers get an immediate first-term discount of up to 10 percent when they sign up for MyRate and, to cover the cost of the device and data transmission, a $30 technology expense is added to their premium for each policy term that they’re enrolled in the program. When they renew their policy, they could save as much as 25 percent or more, or be charged up to 9 percent more, based on their driving habits.
Drivers will be able to see whether they’re on track for a discount by reviewing their driving data anytime by logging in to their policy on progressive.com. They can see how their driving habits are affecting their rate, and, if they choose, make behavioral changes that could lead to savings.
Progressive has been an industry pioneer in understanding that how you drive should affect what you pay. Its initial foray into usage-based insurance started in 1999 with a program in Texas called Autograph. It then piloted its next generation of usage-based insurance, TripSense®, in Minnesota, Michigan and Oregon beginning in 2004. The new program, MyRate, will continue to be rolled out to more states in 2009, pending state regulatory approval.
Source
Sunday, November 15, 2009
A Health Insurance Mandate That Works Like Auto Insurance? Think Again
In building the case for mandatory health insurance, President Obama and congressional Democrats are comparing a proposed requirement to buy health coverage to the need for all car owners to buy auto insurance.
"Unless everybody does their part, many of the insurance reforms we seek, especially requiring insurance companies to cover preexisting conditions, just can't be achieved," Obama said in his address last week to Congress. "That's why under my plan, individuals will be required to carry basic health insurance -- just as most states require you to carry auto insurance."
But this analogy is becoming a liability, so to speak.
It's true that most states require drivers to carry auto insurance. And it's equally true that the administration wants a federal law that will require individuals and employers to buy health insurance.
But the similarities end there.
Now critics are starting to urge the administration to use a different, more representative comparison to justify a virtually unprecedented federal mandate.
"It doesn't make sense," Robert Gordon, senior vice president for policy development and research at The Property Casualty Insurers Association of America, said of the analogy, noting several inconsistencies in the comparison.
First, the auto insurance mandate is easily avoidable. If you don't want to pay, don't drive a car.
Don't want to pay for health insurance? Drop dead.
"You can avoid the auto insurance mandate by divesting yourself of a car. The only way to avoid a health insurance mandate is by divesting yourself of a body," said Michael Cannon, director of health policy studies at the Cato Institute.
Second, auto insurance is mandated in large part so that drivers carry liability insurance to cover other people and other cars they may damage. Covering damage to their own cars is of secondary importance.
Many drivers can go without collision insurance if they like. If a hood is dented on the car of someone without the coverage, that person can drive around with a dented hood. But the only kind of health insurance Obama is talking about is collision insurance. If someone's body is a jalopy, he or she still has to get covered.
Former Department of Health and Human Services officials Peter Urbanowicz and Dennis Smith noted this difference in a paper examining the constitutional implications of an individual mandate for The Federalist Society for Law and Public Policy Studies.
"The primary purpose of the auto insurance mandate was to provide financial protection for people that a driver may harm, and not necessarily for the driver himself," they wrote. They also noted that the auto insurance mandate acts as a "quid pro quo" for the states to issue a driver's license.
Nevermind that Obama explicitly opposed such a provision during the Democratic presidential primaries. It was one of the few policy differences between him and then-Sen. Hillary Clinton.
"My belief is, the reason that people don't have it is not because they don't want it but because they can't afford it. And so I emphasize reducing costs," Obama explained at a February 2008 debate in Austin, Texas.
Fast forward to last week, before a joint session of Congress, when the president wholeheartedly embraced the concept.
Obama does want to ease the burden by offering some kind of alternative to private insurance, possibly a government-run option, and providing for exemptions. Senate Finance Committee Chairman Max Baucus' plan includes tax credits for those who might have trouble affording coverage. But it also imposes hefty fines on those who don't comply.
Auto insurance mandates have not eliminated the problem, though.
Donald Griffin, also with The Property Casualty Insurers Association, said anywhere from 8 to 14 percent of motorists are uninsured in most states despite the requirement.
"Still, we have this problem, so those requirements don't seem to do much to solve the uninsured motorist problem," he said.
There are, of course, other differences between health care reform as Obama proposes it and the auto insurance industry. The kind of payout caps Obama wants to restrict and other limitations on coverage are standard practice in the auto insurance industry. Plus, the regulation of that industry is decided at the state level. Not the federal level.
The truth is, there is not really a comparison out there.
The Congressional Budget Office said as much in 1994 when it issued a paper on the Clinton-era call for a health insurance mandate.
"A mandate requiring all individuals to purchase health insurance would be an unprecedented form of federal action," the CBO said.
Interestingly, the closest thing the CBO could find to mandatory health insurance was the draft.
"Federal mandates that apply to individuals as members of society are extremely rare. One example is the requirement that draft-age men register with the Selective Service System. The Congressional Budget Office (CBO) is not aware of any others imposed by current federal law," the report said.
In light of the 1994 report, Cannon amended his earlier comment. There is one way to avoid a health insurance mandate, he said: "Fleeing to Canada."
Source
"Unless everybody does their part, many of the insurance reforms we seek, especially requiring insurance companies to cover preexisting conditions, just can't be achieved," Obama said in his address last week to Congress. "That's why under my plan, individuals will be required to carry basic health insurance -- just as most states require you to carry auto insurance."
But this analogy is becoming a liability, so to speak.
It's true that most states require drivers to carry auto insurance. And it's equally true that the administration wants a federal law that will require individuals and employers to buy health insurance.
But the similarities end there.
Now critics are starting to urge the administration to use a different, more representative comparison to justify a virtually unprecedented federal mandate.
"It doesn't make sense," Robert Gordon, senior vice president for policy development and research at The Property Casualty Insurers Association of America, said of the analogy, noting several inconsistencies in the comparison.
First, the auto insurance mandate is easily avoidable. If you don't want to pay, don't drive a car.
Don't want to pay for health insurance? Drop dead.
"You can avoid the auto insurance mandate by divesting yourself of a car. The only way to avoid a health insurance mandate is by divesting yourself of a body," said Michael Cannon, director of health policy studies at the Cato Institute.
Second, auto insurance is mandated in large part so that drivers carry liability insurance to cover other people and other cars they may damage. Covering damage to their own cars is of secondary importance.
Many drivers can go without collision insurance if they like. If a hood is dented on the car of someone without the coverage, that person can drive around with a dented hood. But the only kind of health insurance Obama is talking about is collision insurance. If someone's body is a jalopy, he or she still has to get covered.
Former Department of Health and Human Services officials Peter Urbanowicz and Dennis Smith noted this difference in a paper examining the constitutional implications of an individual mandate for The Federalist Society for Law and Public Policy Studies.
"The primary purpose of the auto insurance mandate was to provide financial protection for people that a driver may harm, and not necessarily for the driver himself," they wrote. They also noted that the auto insurance mandate acts as a "quid pro quo" for the states to issue a driver's license.
Nevermind that Obama explicitly opposed such a provision during the Democratic presidential primaries. It was one of the few policy differences between him and then-Sen. Hillary Clinton.
"My belief is, the reason that people don't have it is not because they don't want it but because they can't afford it. And so I emphasize reducing costs," Obama explained at a February 2008 debate in Austin, Texas.
Fast forward to last week, before a joint session of Congress, when the president wholeheartedly embraced the concept.
Obama does want to ease the burden by offering some kind of alternative to private insurance, possibly a government-run option, and providing for exemptions. Senate Finance Committee Chairman Max Baucus' plan includes tax credits for those who might have trouble affording coverage. But it also imposes hefty fines on those who don't comply.
Auto insurance mandates have not eliminated the problem, though.
Donald Griffin, also with The Property Casualty Insurers Association, said anywhere from 8 to 14 percent of motorists are uninsured in most states despite the requirement.
"Still, we have this problem, so those requirements don't seem to do much to solve the uninsured motorist problem," he said.
There are, of course, other differences between health care reform as Obama proposes it and the auto insurance industry. The kind of payout caps Obama wants to restrict and other limitations on coverage are standard practice in the auto insurance industry. Plus, the regulation of that industry is decided at the state level. Not the federal level.
The truth is, there is not really a comparison out there.
The Congressional Budget Office said as much in 1994 when it issued a paper on the Clinton-era call for a health insurance mandate.
"A mandate requiring all individuals to purchase health insurance would be an unprecedented form of federal action," the CBO said.
Interestingly, the closest thing the CBO could find to mandatory health insurance was the draft.
"Federal mandates that apply to individuals as members of society are extremely rare. One example is the requirement that draft-age men register with the Selective Service System. The Congressional Budget Office (CBO) is not aware of any others imposed by current federal law," the report said.
In light of the 1994 report, Cannon amended his earlier comment. There is one way to avoid a health insurance mandate, he said: "Fleeing to Canada."
Source
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