Insurance Quotes & Advice

The recent abnormally cold weather in the U.S. just a few weeks removed from summer has many forecasters looking ahead to winter.  Forecaster agree that El Nino will play a large part in the winter season but their forecast’s have been mixed.

The forecast for the Northeast, the world’s largest heating oil market, called for equal chances of above-, near-, or below-normal temperatures and precipitation. Long-term forecasts for the region are difficult because weather there is generally not influenced by El Nino but by other factors.

Weather researchers believe El Nino was a big reason for the relatively mild hurricane season thus far and for that many insurers are happy.  The severity of the upcoming winter season will have an large impact on many different insurance sectors, like auto, property and health.

If the South experiences below average temperatures and above average precipitation, the number of auto accidents could rise significantly with drivers not accustomed to snowy weather.  On the flip side a mild winter in the northeast could see auto and property claims fall below normal seasonal levels.

Needless to say most Americans would prefer a mild winter if given the choice, especially residents in the Northeast.  With the economy barely out of a recession, residents could use the savings on home heating costs this year.

Insurers would also prefer a milder winter to coincide with the mild hurricane season, their capital levels have yet to recover from the beating it took from the financial crisis.

The Federal Trade Commission(FTC) has ordered nine major insurance companies to provide information on their use of credit based scoring in determining home insurance premiums.  The use of credit based scoring has been controversial, many consumer advocacy groups feel that it unfairly profiles certain racial groups.

The orders require information from the nine largest private providers of homeowners insurance, which have roughly 60 percent of the homeowners insurance market in the U.S.: State Farm Mutual Automobile Insurance Company, The Allstate Corporation, Fire Insurance Exchange, Nationwide Mutual Insurance Company, The Travelers Companies, Inc., United Services Automobile Association, Liberty Mutual Holding Company, Inc., The Chubb Corporation, and American Family Mutual Insurance Company.

Credit based scoring has been mainly used by the auto and property insurance sectors.  A number of states have attempted to ban it’s use over the years but insurers have vehemently opposed them.

Florida’s state regulator was one of the leading figures against credit scoring when Congressional hearings were held on the matter back in May.  The last study by the FTC was convened in 2003 and was completed last year,  it found that credit based scoring was an accurate measure to determine risk.

Needless to say that finding was slammed by a number of groups.  There is a lot of evidence that credit scoring may be an accurate measure of risk but there is also a lot of evidence that certain groups are disproportionately affected.

Many parents will be in for a rude shock when they try to purchase auto insurance coverage for their teenager for the first time. That’s because most insurance companies consider this age group as very high risk. Statistics will back up this claim, as drivers under the age of 20 years have higher crash rates than any other age group.

Here are some things you can do to help lower their premiums. Try to encourage your child to do well in school with perhaps the incentive of getting them their own car. Most auto insurance companies will offer a good student discount that can be as high as 25%, if your child has a G.P.A. of 3.0 or higher. Choosing a high deductible can also significantly lower their premiums.

If you drive a very expensive car consider getting your teen a cheap used car as the value of the vehicle they drive is one of the determining factors in how high the premiums will be. Safer is always better and cheaper. Premiums for vehicles classed as sports cars will be much higher than those for safer models.

Most important is that parents instill their child with the responsibility of driving safely. Many states have started instituting a graduated driver’s license system that will place restrictions on young drivers usually until they turn at least 18 years of age.

As laws will vary from state to state it is very important that young drivers are aware of these restrictions and follow them to the letter as not only will they risk having their license revoked but their premiums could rise even higher. So as long as your teen is able to maintain a clean driving record you will find that the premiums will start to fall over time.