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It seems that the traditional discrimination between male and female drivers will end very soon thanks to the European Court of Justice, which has approved the ban on price discrimination and set a three year period for the insurance companies to comply. This is certainly good news for male drivers, especially the younger ones, who are traditionally charged with higher premiums, and also means that female drivers will be subjected to higher premiums as a logical move by the insurance providers to split even the costs in order to comply with the new rules. (more…)

It’s a sad fact of life but machines work for less than human beings. In the good old days, every machine needed a human to watch over it and make sure it did not mess up. Now all you do is plug in these new generations of clever computerised things and they can work for days and weeks without ever having to step outside to enjoy a cigarette. It’s enough to make Karl Marx turn over in his grave as the workers of the world have slowly been losing the power to sell their labour. But inside every silver lining is a pig’s ear, or something. If a business can operate with fewer human beings, it’s making big savings that can be passed on to us, the customers. If you’re still able to find work and can afford to insure your car, this is a good thing. If you’re one of the replaced humans and now find yourself on the scrap heap of life, this is bitter medicine.

Automation brings reduced premium rates at two different levels depending on where the savings in labour are made. If the insurer has to employ a call centre full of people (hopefully not offshore to maintain what employment opportunities remain for local people), this is a moderately expensive operation. But if all the selling of policies is effectively automated, all the savings in labour costs can be passed on to you as discounts. For example, the Co-operative offers an 11% discount for buying online. When you add this to other features like a no-claims bonus rising to 70%, it makes them one of the cheapest companies in the insurance business.

But, the most interesting company is Swiftcover. Although set up as an independent, this is now a subsidiary of the Axa Group, selling out in 2007. It’s advertised as the first company relying 100% on the internet to sell its policies and deal with claims. To a greater or lesser extent, all the other major companies have a mixed strategy depending on face-to-face sales through High Street offices, the telephone, the internet and indirect sales through agents and brokers. Through Swiftcover’s website, you can buy a policy online and print out your cover note. If there are any changes to be made to the policy, this is done online. In the unhappy event of having to make a claim, you have a choice of an online process or a telephone call. This is a prize-winning company for its innovation and the cost-savings it offers. Although it now employs some 250 people in England for dealing with more than half-a-million policyholders, this is a fraction of the workforce in other major insurers. (more…)

There’s something about speed. It’s fascinating as a driver to feel in control of a powerful lump of machinery as it hurtles across the landscape. The tire noise rises. If you have one of these sporty vehicles with a modified muffler to let you hear the power of the engine, you press a little harder with your right foot. Cars today are manufactured with safety in mind. It used to be dangerous to do more than eighty mph. The brakes were poor, the suspension was worse. Go round a bend too fast and a rollover was common. Today, even a family saloon can do eighty mph and not feel under strain. That leaves many with a curiosity bump. What’s it like to be doing one-hundred or more? Well it turns out an increasing number of drivers want to find out. Not that it’s in any way typical but the Texas Highway Patrol reports writing up 3,726 for speeding where the vehicle was traveling at more than one-hundred mph. Obviously Texan drivers think they live in a big country and stand a good chance of avoiding detection.

So how do the law enforcers react and what happens to your insurance? For these purposes, let’s assume you are caught doing more than forty mph than the limit allows and/or traveling more than one-hundred mph. The majority of states automatically treat anyone doing more than one-hundred mph as reckless. This brings you into the fine fine zone where your wallet is going to be hit for more than $1,000 in penalties and administrative charges. Obviously, there are no fixed rules about the scale of the fine. It will go up if you ignore school and construction zones. Similarly, the higher your speed in the relation to the speed limit, the higher the fine. Some states have a super-speeder tariff. But the real crunch comes if you’re charged with a misdemeanor or a reckless driving citation. In most states this features an automatic suspension of your license and points on your record. Acquire too many points and your license disappears for a year and more. This assumes the courts don’t decide to throw you in jail. This will be a certainty if you’ve been drinking or have drugs in your body. Otherwise you’d better hope the judge is in a good mood. (more…)

No matter which part of the country you look at, there’s been a steady increase in the premium rates businesses are expected to pay for their group health plans. The blame for these increases is spread around fairly evenly. Washington is at fault because, in passing the Affordable Care Act, it failed to introduce any effective measures to control the cost of health care. The result has been an explosion in price of both drugs and the delivery of treatment in hospitals and clinics. Since none of the manufacturers or healthcare providers are sure what will happen in the future, they are adding extra margins to their prices now so that, if there are controls introduced in years to come, they will have a good cushion to play with.

In addition to the price increases, insurers have been increasing the deductible so that, in many cases, claimants are now having to pay $2,000 or more before the insurer parts with a cent. The final insult has been the proposed rate increases. For example, Aetna Health requested the NY Insurance Commissioner for increases of between 27 and 33% in 2010. Although the Commissioner reduced the requested increases by 10%, this is a startling hike when the general level of commercial activity is so low. With small businesses struggling to make a profit, they cannot simply increase their own prices. This is forcing some very tough choices. To pay for health insurance, small business are postponing investment or the owners are using their personal savings to subsidize their employees. Such are the needs of the day when so many owners think of their employees as part of the family.

Yet it’s at this point we come to a slightly strange phenomenon. You can say what you like about President Obama and the Affordable Care Act (and most probably say some unprintable things) but the man and his team are not without foresight. Included in the Act is a Small Business Health Care Tax Credit. Washington foresaw the possibility of short-term premium rate increases, so it decided to offer help to all small businesses that continued or introduced health insurance for their employees. The Treasury has just published a report showing only a fraction of small businesses have claimed their credit. When the Act was going through the House, the Congressional Budget Office estimated the initial demand for credits would cost the government some $2 billion in the first year of operation. Yet, of the more than four million small business that are eligible, less than one-quarter-million have applied for the credit. (more…)

Having a car involves many responsibilities, some of which may be not as pleasant as driving a car and involve additional costs. Yes, we are talking about vehicle insurance. It’s definitely one of the most irritating aspects of owning a car and a cash-consuming one. Ask any driver and he will tell you that his or her insurance could be less expensive, since it takes a good bite off the family budget. If you are in the same situations as millions of drivers in the country and want your car to be not as expensive to insure as it is now the following money saving tips will definitely help you optimize your costs effectively:

Modify your policy

Vehicle insurance comes in many forms and delivers many options to choose from. When there are many different coverage options included into your policy it becomes very expensive. So your aim when optimizing your insurance costs is to strip off all the unnecessary coverage features and leave only those that are really needed. In fact, the only type of coverage that is legally required is the third party liability whereas all others are optional. Sure, it doesn’t mean that you have to strip down your policy to the bare minimums. But make sure to take some time and think about the things you really need with your policy and things you can leave behind. This will certainly cut your insurance costs effectively.

Adjust the deductible

As you may already know, deductible is the amount of money to be paid by you before the coverage actually starts to apply. It is used to prevent insurance claims due to minor damage to your car. And the higher you set the amount of deductible the lower is the premium. You can set the deductible up to $1000, however make sure that you can actually afford such an amount. Otherwise it doesn’t make any sense decreasing the premium and not being able to get any coverage when needed since you can’t meet the deductible. (more…)

The world would be a better place if everyone was trustworthy and honest. Sadly, human nature seems to have come with a selfish gene. We want what we haven’t got. We don’t want to pay for what we need. There was a recent piece of research which staged accidents at intersections involving a bus. The point of the study was to discover how many of the innocent people on the sidewalks would run on to the bus and claim to have been injured. Needless to say, the results did not show city dwellers in a good light. So, when people were first working through the basic statistics of assessing risks, it was obvious there was less risk if people drove only a few miles a week. But if they were commuting long distances on busy interstates, the risk of accidents grew high. The insurers reasoned it would be good to pitch the premium rates to reflect the risks. Except how could they trust the drivers to make an honest declaration of how many miles a week they drove? The answer, sadly, was that no one was trustworthy if allowed to self-certify mileage. When insurers ran a trial, asking drivers to bring in their vehicles for their odometer readings to be taken, everyone quickly learned how to wind back the count of miles.

Well, now technology has arrived that eliminates the risk of cheating – until someone learns how to hack the black boxes, that is. For now, insurers like Progressive are selling a basic policy plus monitoring equipment to plug into your vehicle. The insurer can then monitor when, where and how far you drive. Some insurers are even fitting a GPS transmitter. This is useful if your vehicle is stolen or you report a breakdown and a tow truck has to find you.

Many consider this new technology an invasion of their privacy. The question you have to answer is whether you want the discounts. As a low mileage driver, you pay a monthly premium based on how far you drive and whether you avoid driving at peak times. Before you answer, note some insurers also collect data from your vehicle showing how often you break suddenly, whether you swerve from side to side, and other features of your driving style. Should you have an accident and make a claim, the insurer has a record of how you were driving at the time. If you claimed you hit the other car because you were swerving violently to avoid a moose, the recording may show a slightly different story (ignoring the problem of explaining how there came to be a moose loose in your part of town).

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When an airplane crashes, we’ve all been brainwashed into watching the search for the black box. That’s the onboard recording device that captures what the pilots were saying as the plane fell from the sky as well as storing all the technical information from the instruments. We’re told it’s vital to be able to explain why each aircraft crashes. After all, the larger planes carry many passengers and, if one were to crash into a city center, it could do a lot of damage. We all have an interest in reducing the risk of air accidents. That’s why we’re hooked as television cameras record submarines going down to search the seabed to recover these vital boxes and as many bits of the plane as possible. Remarkably, experts rebuild as much of the plane as possible to see more clearly what damage was sustained before the plane hit the ground or fell into the sea.

Have you heard of event data recorders (EDR)? These are the little black boxes for the vehicles we drive on our roads. In 2008, a report published by the National Highway Traffic Safety Administration (NHTSA) admitted between 65 and 90% of vehicles were already fitted with EDRs. The reason for the big range in the estimate is easy to explain. Almost every new vehicle rolling off the assembly line has an EDR fitted. It’s been a standard component for many years. But it’s not entirely clear how many older vehicles are still driving around without one of these recording devices inside. All we can say is that, as we slowly throw the old vehicles away, we’ll slowly move up to 100% installation. How can you tell whether your vehicle has an EDR? Curiously, until 2011, manufacturers did not have to tell you. Now, if you look in the driver’s manual, you’ll find confirmation.

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