Car Insurance - Fall and rise of car insurance premiums

Recent figures have revealed that car insurance premiums fell by more than 3 per cent, in the last six months of 2008.

Car insurance provider, Sainsbury’s Car Insurance, found that the average motor insurance premium, in June 2008 was, £514.16, which is 3.1 per cent higher than the figure in December of the same year at £498.22.

But despite the fall that was seen last year, a rise in premiums could take place this year due to the increase in personal injury claims, which rose by 22 per cent and amounting to £6 billion, last year.

Joanne Mallon manager of Sainsbury’s car insurance, said: "The average motorist is still looking at around £500 to insure their car so it is important for them to shop around for competitive insurance."

Speaking on the rise in personal injury claims, Ms Mallon added: "Premiums could rise as a result of the rising cost of personal injury claims and also repairs.

"However, given that around two thirds of motorists admit to some form of potentially dangerous activity whilst driving such as eating or using mobile phones, by cutting out these practices we can reduce the chance of being involved in an accident.”

Aon completes sale of Auto Insurance Specialists

Aon Corp., the world's largest insurance broker, said Tuesday it has completed the sale of Auto Insurance Specialists LLC to auto insurer Mercury General Corp.

Aon (nyse: AOC - news - people ) received $120 million in cash for all the issued and outstanding equity interests of AIS Management LLC, which is Auto Insurance Specialists' parent company. Aon may also receive up to $34.7 million over the next two years if certain performance benchmarks are met.

The transaction, which was announced in October, closed on Friday.

Aon shares fell 24 cents to $43.87 in afternoon trading. Mercury General (nyse: MCY - news - people ) shares gained 43 cents to $45.25.

Sixteen insurance companies registered with IBSL

The Insurance Board of Sri Lanka (IBSL) said that sixteen companies have been registered with the IBSL in terms of Regulation of Insurance Industry Act No 43 of 2000. Eleven companies are involved with both Life and General policies three with only General policies and another two with only life policies.

The companies are ABC Insurance Company, Allianz Insurance, Allianz Life Insurance Lanka, Amana Takaful, Asian Alliance Insurance, Ceylinco Insurance, Ceylinco Takaful Company, Co-Operative Insurance Company, Eagle Insurance, Hayleys AIG Insurance, HNB Assurance, Janashakthi Insurance, Life Insurance Corporation, Seemasahitha Sanasa Rakshana Samagama,Sri Lanka Insurance Corporation and Union Assurance.

There are also 54 registered broker companies and a larger number of agents in the country. Four companies have not registered for 2008 and the IBSL has refused to renew the registration of only one company for 2008 who has not fulfilled the requirements as per the regulations.

Director General IBSL L.S.A. Serasinghe told the Daily News Business that the premiums under the relevant companies should be paid only to those registered companies, Insurance broking companies and Insurance agents registered with an insurance company.

Asked whether there are any irregularities in the industry due to the current financial crisis taking place globally, she said, there is no impact on the insurance industry so far and the IBSL will keep the public informed through the media on all activities taking place as an annual event so that people would be well aware about how they should act.

On the question whether the demand for the new insurance policies has declined, she said that it is too early to comment as business activities have not picked up yet in the new year.

Donated police car not best incentive

When the Jackson City Council meets this morning, members should reject the idea of donating an old police cruiser as an incentive for local high school students to stay in school and graduate. It's not that we have anything against providing incentives for students to finish high school. But this particular idea is a bad one for a number of reasons.
This idea originated as part of the anti-crime task force report, which urged Jackson-Madison County Schools Superintendent Dr. Nancy Zambito and her staff to come up with incentives to help kids stay in school. The idea was that many habitual criminals are high school dropouts who have trouble finding work.

Under this proposal, the city would donate the 1992 Ford Crown Victoria. Automotive students from South Side would refurbish it, and it would be given away to a graduating senior in a drawing later this year

The proposal projects the wrong image to students. Stay in school, we'll give you an old police car. This particular car has a lot of wear on it - it's got 160,000 rough and tumble police miles. And high performance police cars aren't exactly known for their good gas mileage. Most old police cars are sold for well under $1,000 and for good reason. It's not a very reassuring message to send to students.

Another problem is that it takes control away from parents. Giving a teenager a car is serious business, one parents often worry about and want to be able to control. Then there is a issue of who will pay for car insurance, maintenance and other expenses. The student, maybe, if he or she has a job. Otherwise, those responsibilities could fall to the parents.

If school officials want to encourage students to stay in school there are better ways to do that. Some school systems just pay students for their attendance. Or, perhaps if school officials want to give away a car, they could take the sale proceeds from the police car and solicit additional support from local car dealers and other businesses to purchase a newer, more fuel-efficient car, and also cover some of the insurance and maintenance costs.

Offering incentives to help ensure students graduate from high school is not a bad idea. But this one deserves more thought by school officials. Instead of donating the used police car, the City Council should offer the money from the sale of the car.

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Brown & Brown Insurance Buys New Jersey's Gallagher Associates

Florida-based insurance agency Brown & Brown, Inc. has purchased the assets of Gallagher Associates in Blackwood, New Jersey.
Advertisement
Sponsored by TransUnion

Gallagher Associates, with annualized revenues of approximately $2.0 million, sells property/ casualty insurance in the southern New Jersey, Pennsylvania and Delaware region.

The Gallagher Associates personnel, including John J. "Jack" Gallagher, Jr. and John F. "Jack" Corbett, will continue to operate from the existing location in Blackwood as a freestanding Brown & Brown profit center.

Source: Brown & Brown, Inc.

President-elect Barack Obama eyes a $300 billion tax cut

President-elect Barack Obama and congressional Democrats are working on a plan that would deliver $300 billion worth of tax cuts to individuals and businesses, according to the Wall Street Journal.

The proposed tax cuts, which would make up about 40 percent of the economic stimulus package, may make it easier to attract Republican support for an economic-stimulus package, as many Republicans have said that economic initiatives should rely more heavily on tax cuts rather than spending, according to the Wall Street Journal.

The size of the proposed tax cuts could reach $775 billion over two years, which is a larger amount than many Democrats and Republicans in Congress had anticipated, according to the Wall Street Journal.

If enacted, the Obama tax-cut proposals could total more in two years than either of President Bush's tax cuts did in their first two years, according to the Associated Press.

Bush's 10-year, $1.35 trillion tax cut of 2001 - considered the largest tax cut - was made up of $174 billion of cuts during its first two full years, according to Congress's Joint Committee on Taxation.

Obama had hoped to have Congress enact the recovery plan in time for him to sign his when he takes office in January, but Robert Gibbs, spokesman for Obama, said that was "very, very unlikely."

"We don't anticipate that Congress will have passed, both houses, an economic recovery agreement by the time the inauguration takes place," Gibbs told the Associated Press.

Obama has insisted bold and quick action is crucial to help America bounce back from this recession.

"Economists from across the political spectrum agree that if we don't act swiftly and boldly, we could see a much deeper economic downturn that could lead to double-digit unemployment and the American dream slipping further and further out of reach," he said in his Saturday radio and YouTube address.

Congressional aides briefed on the plan say it likely will include tax cuts of $500 to $1,000 for middle-class individuals and couples, as well as some $200 billion to help revenue-starved states pay for health care programs for the poor and other operating costs. A large portion of the money would go for infrastructure projects, such as road and bridge repairs as well as energy efficiency projects and health care information technology systems.

Crash Course: More drivers are going without insurance in down economy

The Wall Street Journal
More drivers are letting their car insurance lapse because of the sour economy, putting themselves and others at risk.

Several hundred thousand drivers dropped their insurance in the past year as the jobless rate climbed, estimates a study to be released soon by the Insurance Research Council, an industry-funded group.

Online agency Insurance.com says it also is seeing evidence recently of more uninsured motorists. It says that as many as 40 percent of callers following up on online applications had let their previous policies lapse, up from less than 10 percent a couple years ago.

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* Story: What to do after an accident
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Without a net

A slumping economy is putting more uninsured drivers on the road. Here’s how to protect yourself:

• Make sure you have extra coverage that compensates you if you’re hit by an uninsured motorist.

• Set your own liability insurance amount commensurate with your assets. This amount also helps determine the limit of your uninsured motorist coverage.

The trend is bad news for everybody on the road. If you’re hit by an uninsured motorist, you may have to sue to recover costs, and many uninsured motorists have few assets. You can protect yourself by carrying uninsured-motorist coverage — almost half of states require the added coverage — but this may boost your premium.

Even in good times, many Americans drive without insurance. The Insurance Research Council’s previous study, released in 2006, found that nearly 15 percent of drivers nationally were uninsured in 2004, up from about 13 percent in 1999. In some states, including Mississippi, California and Arizona, roughly a quarter of drivers weren’t insured.

Preliminary data from the council’s forthcoming study “indicate that a single percentage point increase in the unemployment rate is associated with a half-point increase in the percentage of uninsured drivers,” said David Corum, council vice president. The nation’s jobless rate was up two percentage points to 6.7 percent in November from a year earlier. The group estimates the number of uninsured motorists based on data from insurance claims.

Possibly adding to the problem is the fact that auto-insurance rates are rising again after a couple of years of flat or declining premiums. Premiums nationally rose 3.8 percent in November from a year ago, according to the Labor Department’s consumer price index.

Agents say a growing number of customers are stripping down their auto-insurance policies, taking the absolute minimum level of liability coverage legally required to drive in their state.

“A good proportion of people on the road are either uninsured or underinsured, and so you have to protect yourself,” said Robert Hartwig, president of the Insurance Information Institute, a nonprofit group. “Your odds of being in an accident with an uninsured driver are substantial.”

Motorists driving without insurance also face risks. In a wreck, they could lose whatever assets they own in a court judgment. Also, driving without insurance is illegal in 48 states and the District of Columbia. The only states that don’t require insurance are New Hampshire and Wisconsin; these states require drivers to show proof of the financial ability to pay damages for liability.

Motorists who allow their policies to lapse for any reason also often must pay an initial 25 percent to 50 percent surcharge for a new policy. Insurance companies charge them more because they consider them irresponsible: Unlicensed and uninsured drivers are disproportionately involved in fatal accidents.