In the early days when gun-toting bandits were likely to rob the stagecoach or attack a bank, it was every man and woman for him or herself. Although insurance as we know it today had developed in London early in the seventeenth century, the idea was not widely accepted in most of America until much later. Individual companies were established in the mid-eighteenth century, but it’s not until the 1850s that states began to regulate the industry and appointed Insurance Commissioners. From then on, progress has been rapid. The idea is essentially simple. The insurer estimates the total amount of claims it’s likely to have to pay in a given year and divides that sum among all those wanting insurance. Everyone pays into the fund. That money is invested and slowly grows over the year. As claims come in, money is paid out. If there’s more than enough money to pay the actual claims, the insurer makes a profit. Should the insurer make a loss, all the insured pay more the next year. Because the losses are shared between a large number of people, each person pays a small amount to buy peace of mind.
Whatever the car insurance companies agree with the policyholders has to be consistent with the local laws. Until fairly recently, all the laws focused on financial responsibility. All the companies had to have a minimum amount of capital as a buffer against claims. That way, if they were hit by an unexpected run of claims, they would not fall into bankruptcy. For the policyholders, the relevant laws were self-preservation and tort. As a matter of practicality, if you own property and it’s destroyed in a fire or some other natural disaster, you want to replace it. With insurance, this is usually practical. The law of tort make you liable to pay compensation if you damage goods belonging to someone else, or injure them. If we were cynical, we could say you can ignore this liability if you injure someone poor. But injure a rich man who can afford an attorney to sue you and you realize the advantage of having liability insurance.
Because the majority of states thought all drivers should be responsible, they imposed a mandate. Now apart from drivers in New Hampshire, everyone who sits behind the wheel of a vehicle on a public road must carry a minimum amount of liability insurance. Because of the mandate, this is relatively affordable online car insurance. To check out exactly how much you will have to pay, get free car insurance quotes from as many insurers as possible. In most states, this is the cheapest form of insurance. It would be even lower if the law enforcement effort was greater. As it is, as many as 20% of drivers are uninsured in each state. Because the number of policyholders sharing the loss is smaller than it should be, every car insurance quote is higher. This is an unfortunate situation.
Over the decades, there’s something rather magnificent about the continuing enthusiasm with which men proclaim they are better than women. No matter what the activity, there’s a kind of aggressive pride in operation. As if, just by claiming superiority, it must always be true. This may work in all the cases where there are no direct comparisons or competitions, and/or the outcome depends on physical strength, but once the statisticians get to work, they often find women outperform men. Ask anyone who works in the insurance industry, and you will consistently hear the answer that women drive more safely than men, make fewer claims, and their claims involve smaller amounts of money. This explains why a recent survey shows insurers quoting men auto insurance premium rates on average 23% higher than women.
The survey was carried out in seven states and collected some 5,000 quotes from the regulatory authorities. This makes the survey interesting. The more usual method is for the researchers to send out requests for auto insurance quotes through the online search engines. The analysis of records held by the Insurance Commissioners offers a different view of the same process. Obviously, the regulators monitor the way the market works in their states. This means a variety of different methods are adopted to collect quotes. However, the methods all depend on standardized profiles. The proposers are all aged [insert age], have no serious accidents on their records, have middle-income jobs, and so on. When all the data was identical except for the gender, insurers quoted higher premium rates for men 63% of the time, the quotes were the same 27% of the time, and women were quoted higher rates 10% of the time. If the survey was narrowed to drivers under 25 years, men were asked to pay an average of $675 a year more.
At this point, we should point to Europe. As from December 21, 2012 insurers must exclude all gender-elements to the pricing of risk. This is producing a dramatic equalization of the premium rates. It’s rather curious there’s no sign of men complaining about being the victims of sex discrimination in America. The laws are not dissimilar. A federal court could potentially find the US insurance industry had been unlawfully assessing premium rates and order them to change, perhaps even pay compensation. But there’s no enthusiasm for such a case. It seems American men do not object to being treated as second class drivers when it comes to the amount they pay. From this you will understand it makes no difference whether you get one or one-hundred auto insurance quotes. The pattern of discrimination has deep roots. So the only point to shopping around as a man, is to find the least bad auto insurance quote (as compared to women). It’s actually quite ironic that even if a man proves himself the equal of a woman in terms of safety record, he will still have to pay more to insure the same make and model.
You may read in the newspapers or online that our economy is turning round. There are apparently more jobs. The housing market is recovering. Everything that was wrong during the recession is now set right and it’s all plain sailing from now on. Well there’s just one problem with all this. The economists who produce all this encouraging news don’t live on Main Street. It’s all theory for them. The practical reality is large numbers of people have given up looking for work and are only in their homes because the mortgage lenders have held back on the foreclosures. In such a climate, you need to stay cautious and ensure you always get the best value for money going. For insurance, this means shopping around to find the lowest rates for the cover that works best for you. Here are some tips.
If you take a sample of one or two insurers, you will either be the luckiest person on the planet or find poor value. Only when you get a full cross section of the premium rates on offer can you see the range of choice and pick the policy that’s going to give you the best value. This means getting quotes from the maximum number of insurers selling policies in your state and covering a broad range of different options, e.g. on different makes and models, the amount of the deductible, and so on.
Choosing the right make and model
Although you don’t change your vehicle that often, it’s always important to buy the right vehicle. This means looking carefully at the safety ratings produced by the National Highway Safety Traffic Administration. The general rule is the safer the vehicle, the lower the premium. Remember this applies equally whether you are buying new or secondhand. Every year, your local state’s Insurance Commissioner will issue premium rate guidelines for each make and model. Combine this information with that from the NHSTA and ensure you get the lowest rates.
Buy only the cover you need
If you have an auto loan, the lender will dictate which policy to buy and the minimum insurance values. Once you have paid off the loan, you can make the decisions. Think carefully about the value of your vehicle and how much it would cost to replace if it was totaled. For vehicles with low replacement values, it may make sense only to carry liability cover. If you have assets to protect, go for generous safeguards. With today’s medical expenses being so high, it makes sense to have large sums available if you are unlucky and cause serious injury to someone. Get Auto insurance quotes for big numbers. But if you live in rented accommodation and have no assets, there’s no need for you to carry anything more than the mandatory minimum.
There are good discounts on your Auto insurance quotes if you insure multiple vehicles with the same company or buy both home and auto insurance cover.