A reference to the Competition Commission is on the cards

With the latest revelations about Barclays and other banks lying to manipulate the LIBOR, and the HSBC at the centre of money laundering activities in America, we’re used to the idea of the banking sector ripping us off. But we somehow tend to think the rest of our capitalist business community works more fairly. As if! With G4S coving itself with glory over providing security to the Olympics and the newspapers hacking into our computers and voicemail, it can hardly come as a surprise the insurance sector is also not working properly and denying us cheap car insurance.

In June, the Office of Fair Trading announced a provisional decision to refer the British insurance industry to the Competition Commission. Although the final decision is delayed until October, we can be hopeful this is now a formality. The OFT accused the industry of being dysfunctional and costing drivers an estimated 225 million pounds a year in additional premium payments. The way the scam works is that, when we have an accident, the insurers refer us to garages to make the repairs, or sell or rent us replacement vehicles. The insurance companies receive a percentage fee for each referral. This is reflected in the price the insurers pay these garages for repairs or car hire companies for replacement vehicles. The sale prices of replacement vehicles can be inflated or the period of hire can be recorded as longer than that actually enjoyed. The result? Whether you are the at-fault driver or the victim, everyone’s premiums rise. In each insurance company’s accounts, the payments made on your behalf to repair or replace are described as a cost, but a percentage is actually a concealed profit element for delivering the service the insurers are already contracted to deliver.

The experts expect the Commission to ban the insurers from continuing to add these referral fees. It’s not clear whether this will produce cheap car insurance. Since some insurers make most of their profit from these fees, the stock market valuation of the companies affected has fallen. Perhaps appropriately, one of the companies most affected is Direct Line. This has been preparing to float on the stock exchange. Perhaps it will now delay. Ironically, Direct Line is owned by the RBS Bank so you can see where the culture to rip off customers comes from.

Auto insurance quotes and other insurance products

One of the main differences between auto insurance and other types of insurance services is that if you choose not to insure your car it’s not just your personal choice but a legal offense. All other insurance products are purely optional, even though life can make them rather necessary in certain situations. For example, health insurance isn’t required by law but imagine going to the hospital for care without having an insurance plan – you’ll spend thousands of dollars out of own pocket. House insurance isn’t required as well but in case your house gets burnt down wouldn’t it be much better if you had the insurance in the first place? Insurance products in general are a great method for minimizing your risks and eliminating the financial impact of situations that are beyond your control or forecast. But if you put your mind to it you can actually optimize your costs by using different types of insurance products at the same time.

Let’s take a typical situation within most families in this country. You have at least one car in the household, so there’s an auto insurance policy on your hands, all the family members have health insurance and the house is probably insured too. This leaves us with three insurance policies most often purchased from different providers. Of course, it’s better to get auto insurance quotes from a company that specializes in providing auto insurance and having your house covered with a company that focuses on real estate insurance. It sounds very logic from the first view. But if we say that you may actually get better rates when buying all these things from a single insurer?

Of course, not all insurance companies provide the entire spectrum of insurance services as even large insurers tend to put their focus on specific types of products. But there are still companies that can provide you with all the basic insurance policies you may need starting with car insurance to house insurance. And they usually provide significant discounts to customers who actually choose to get all the policies from them at once. Sounds very attractive, doesn’t it?

In reality, of course, you don’t buy all types of insurance at once. You get auto insurance quotes when you buy an auto and start looking for home insurance after moving into your new house and that rarely takes place at the same time. Usually you would just compare quotes for the same types of products form different companies without even thinking about getting it from the provider you have other insurance products purchased from. But now you know that this option is there to consider and you should think about it every time you get another insurance product.

For example, you’re comparing auto insurance quotes for a car you’ve bought for your spouse. First of all, consider getting it insured with the same company that has your primary car covered – most insurers offer significant rate cuts when you cover tow or more vehicles under the same policy. But even if the auto insurance quotes you get from the company you already have policies with aren’t the most competitive learn how big is the discount they offer for having different insurance products with them – it will certainly make any policy really attractive.

Car insurance quotes for a unique product

When you set out to buy a refrigerator, you can lay down a few gentle guidelines for yourself. Do you only want to buy a product from an American manufacturer, what's your price range, how energy efficient do you want it to be, and so on? Now a few minutes spent on the internet produces makes, models and lists of retail prices. Armed, you now set off for the local electrical stores and hope to find a bargain. Car insurance is a rather different proposition. It's a contract and the only way you can actually see it is by getting hold of a copy of the policy. Even then, it may not be completely clear what you are buying. Some of the language used to draft these contracts is not so easily understood unless you majored in law from one of these upmarket universities. But now we come to the really unusual qualities.

Although there are regulations dealing with electrical safety in the manufacture of refrigerators, there are both federal and state laws regulating insurance. More importantly, there's a mandate in all but one state requiring you to buy the minimum amount of liability cover. There's also an Insurance Commissioner who oversees the terms and conditions and, in some states, has to be consulted on rate rises. Given this amount of oversight, many of the policies are broadly similar. The only differences come in the way in which each company assesses the risk you will be involved in an accident and make a claim, and in the efficiency with which your claim is handled.

This means shopping around can only be based on the maximum number of car insurance quotes you get through sites like this, and the help and guidance offered by your state's Insurance Commissioner. Once you have the basic information, you then come to the Commissioner's site. On the best, you find reports of the complaints made against the local insurers. Now tie the car insurance quotes to the number of complaints. There's no point in buying cheap car insurance from a company with multiple complaints. Look for affordable quotes from insurers that seem to offer a good service if you are unlucky enough to be caught in an accident.

Developments in the pay-as-you-go insurance market

We’ve had usage-based insurance for a few years now and the technology is developing rapidly. It started off relying on the insurer installing a little black box into your vehicle. This would collect data from your onboard computer and transmit it to the local headquarters of your insurance company. Based on this information, discounts reflecting your milage and safety record would be granted. This is a good system but moderately inconvenient because you have to have the technology fitted and surrender it when you cancel the cover. In the early days, the transmitter proved not very reliable. Now, of course, we have mature technology and everything works really well.

In the meantime, the car and truck manufacturers have been working hard to refine their own computer systems. Many have built-in transmitters to communicate the need for repairs to your own garage. The only problem is the different manufacturers have different systems and none of them talk to anyone other than authorized garages. Until now, that is. Sprint Nextel has been working with the insurance industry to offer a cloud-based solution using its 3G network. Sprint’s system collects all the data relevant to deciding how good a driver you are. It passes on the data to your insurer which monitors your performance over time. Presented with this information the insurer has a choice. It can either offer you a flat rate for a fixed term, or it can vary the level of discount month by month.

This gives everyone a chance at earning discounts. The best shot of really cheap auto insurance goes to the seniors, unemployed and homemakers who only drive a few miles every day. But not everyone falls into this convenient group. Some people have long drives to commute to and from work at peak times. Nevertheless, with evidence of good driving, you can still earn discounts. Perhaps it’s only affordable and not the cheap policy you were hoping for, but some auto insurance saving is better than no saving. It all comes from verifiable information you are a good driver. That makes it worth giving up a little of your privacy.

Cutting the cost of insurance

Car insurance is rather a strange product. Thanks to state laws around the country, it’s mandatory to carry the minimum of liability cover. In real terms, you need it to protect your financial situation, but it gives few people any pleasure in having it – except when someone claims against you or you total your own vehicle and can claim on your collision policy. To confirm its rather unique status, it’s also highly regulated. There are federal laws and each state has an Insurance Commissioner whose job it is to lay down minimum standards for the quality of the service local insurers give their customers. Because the Commissioners also have a say in the wording of the terms and conditions, and can exercise some degree of control over the rates that insurers charge, the differences between the insurance products are rarely significant. To give you the best chance of being able to make price comparisons, all insurers must publish their rates. Except, the companies deliberately make their published tables so complicated, it’s very difficult to predict exactly what you will be charged before the quotes come in.

So you cannot search the internet passively for your comparison shopping. Trying to use Google is not going to help. There’s no guarantee any of the high ranking sites will offer you transparent information or unbiased advice. So the only option to get the maximum number of auto insurance quotes is to go through a comparison site like this. Although you will be asked to complete forms and supply personal information which can be turned into cash by the company collecting it, the bulk of the information is relevant to the assessment of the risk and does enable the insurers to give you the quotes. The fact the collecting company can sell on your personal information means you can use the site without payment. When the quotes come in, you can usually see major differences between them. Now you have to avoid prejudices. Do not prefer some auto insurance quotes because they came in quicker than the others, or the agents seem nicer when you talk to them or because you have brand loyalty. Make the decision on the basis of the evidence and act on it. There’s no point in getting auto insurance quotes unless you are prepared to change insurers.

Free auto insurance quotes for seniors

There’s a simple unavoidable fact. We all grow older and, when you look around you, it’s obvious the boomers are all reaching retirement age, although for financial reasons, not all are actually retiring. Some years ago, the Insurance Institute of Highway Safety suggested that, as the population aged, there would be a steady increase in claims. In fact, the number of claims by drivers aged 75 and over has been falling. This has come as a relief to the families of seniors. No one wants to play the heavy and take the keys of the vehicle away from a parent or grandparent. Indeed, as more local shops have gone out of business in the bad economic times, being able to drive to malls and shopping centers has become even more important.

So what can families do to protect their seniors and get the lowest possible insurance rates. The answer comes in several stages. The first is health. The more active seniors stay the better. Both in ordinary life and specifically for driving, there are a number of programs run by doctors and occupational therapists to modify vehicles to make them safer and easier to drive. There are also defensive driving courses approved by insurers. The combination of modifications to the vehicle and additional tuition offers discounts. Get as many free auto insurance quotes as possible to check the range of rates on conventional policies.

The next step is to explore the pay-as-you-go policies. This involves fitting technology to your vehicle or adapting the manufacturer’s onboard computers to communicate with the insurers. With proof of low milage at off-peak times, the premium rates are heavily discounted. With confirmation of safer driving practices, the rates come down even lower. Use the access to free auto insurance quotes to get as much information as possible as to what options are available in your state. Once you have the right policy in place, it’s just a case of driving safely and avoiding an accident. Even if this means driving more slowly and keeping to the routes you know the best, this is the best way to keep you insured at the lowest possible rates for as long as possible.