Pay-As-You-Drive Personal Auto Insurance – Recent Developments

California private auto was changed forever in 1988 with the passage of Proposition 103. Among other things the regulations provided that insurance companies must accept all good drivers (as defined by them) and rate auto on 3 primary factors: Driving Safety, Annual Mileage, and Years Driving (rather than age of driver).

Later some 40 other factors would have accepted onto a list of other permitted secondary factors, although insurance score is not one of them. Territories were abolished in factor of some statistically-built bands related to accident frequency and other factors. Occasionally, even the number and differentials between bands would be narrowed.

The effect of the original regulation and the consequential changes was to cause or increase subsidies for a variety of policyholders:

  • Drivers with accidents subsidize good drivers
  • Long annual mileage drivers subsidize short annual mileage drivers
  • Urban drivers subsidize rural drivers
  • Nearly everyone subsidizes low experienced male drivers

The existence of these subsidies causes shortages in the marketplace and influences behavior that may not be desirable. For example, if drivers with accidents pay too much overall, this may cause an incentive to under report accidents. Less data is usually not good – the absence of accidents in the database will extremely raise rates for the next lower level of accident-proneness, as the higher risk drivers seem to belong in the lower accident group based on their statistics.

Other effects of forced subsidies are the introduction of new companies that are specialists in the over-priced segment of the market, increases in the number of drivers in the temporary market, and rate increases for truly good risks.

Pay-as-you-drive insurance:

It is the limited number of categories for annual miles driven that catches the attention of regulators and others wanting a more refined rating plan. Number of miles driven looks like a reasonable way to measure exposure and is easily understood by policyholders. Presumably in combination with "where you drive" (territory, that is. Although this is not "where you drive", it's "where you LIVE"), it would seem to cover a driver's exposure very well (see next section for what research shows).

The new proposed regulation is being touted as a "green" provision, encouraging drivers to drive less by having their insurance coverage apply by mile driven. California Insurance Commissioner Steve Poizner has proposed this optional rating mechanism, allowing insurers to offer a voluntary option for consumers who are interested in pay-as-you-drive coverage.

Consumer groups are opposed, saying that there is not enough protections in the law for protecting the privacy of insured's everyday activities. Some tracking mechanisms include "OnStar" satellite and GPS-based meters similar to those used in cell phones.

Quoting from the article:

"The Environmental Defense Fund estimates that if 30% of Californians participate in this voluntary coverage, California could avoid 55 million tons of CO2 between 2009 and 2020, which is the equivalent of taking 10 million cars off the road. This would save 5.5 billion gallons of gasoline and save Californians $ 40 billion dollars in car-related expenses. Additionally, the California Air Resources Board has recommended the adoption of pay as you drive as one of the means to meet future climate change gas reduction targets. "

Hard to ignore potential emissions reductions like these numbers.

b> But the research shows:

The research shows that pay-as-you-drive insurance may not get at the true exposure to auto insurance claims for each insured. For liability coverages, age / gender combination, along with insurance score and geography are the largest claim level predictors. For property damage coverage, the model of the car takes over as the number on predictor (the others then follow). This information is from a research paper The Relationship of Credit-Based Insurance Scores to Private Passenger Automobile Insurance Loss Propensity, Michael Miller, FCAS and Richard Smith, FCAS, Epic Actuaries, June 2003.

Pros / Cons of Pay-As-You-Drive:
Pros:

  • Exposure for insurance tied to miles driven – easy to understand by drivers
  • The amount you pay for insurance would be directly controlled by the driver, rather than on factors such as sex, age, martial status, etc. that the driver has no control over.
  • The current proposal is for an optional credit, giving low mileage drivers a choice.
  • Reduced emissions

Cons:

  • The amount a driver pays should be as closely tied to his / her exposure to loss as possible, to avoid cross-subsidies and comply with Actuarial Standards and Principles.
  • Tracking mileage is difficult and some methods proposed inspire fear of lack of privacy in some consumers and consumer watchdog groups.

My opinion is that there are better, less complicated ways to refine the rating plan options when it comes to annual mileage, and still emissions lower emissions and "green" policies. One obvious one is to simply increase the number of mileage bands in the current plans and offer "green" discounts (and debits) based on the type of vehicle covered. Discounts for Prius's, debits for Hummers.



Source by Kimberley Ward

When the Illegal Immigrant Has a License and Auto Insurance

Of late, there’s been so much focus on the illegal immigrant in the media that we in the insurance industry have decided to have our say, as well.

Here goes.

Of all the fifty US states, there are only twelve that give driving privileges to the undocumented immigrant. In the other states, any undocumented immigrant that drives does so without having been issued a license. Without a license, you can bet your bottom dollar that there is no auto insurance to cover an accident. If a legal driver is the not at fault party of a collision, not only will there be no coverage to pay for damages from the other party, but it’s likely there will be no out-of-pocket money to speak of in compensation as well.

Good reason to invest in uninsured motorist of underinsured motorist insurance, huh?!

In any case, the danger involved in illegal immigrant driving has prompted the few states that do offer some form of driving licenses to the undocumented to actually expand the eligibility. With the invitation from CA, CO, DE, DC, HI, MD, NV, NM, UT, WA and VT to apply for a driving license, the undocumented immigrant who passes the written and driving test has better odds of safe driving and can actually purchase protective auto insurance coverage.

This means of course that in the event of a vehicular accident, the illegal immigrant that lives and drives in one of the areas where the privilege is open to him or her can have the shielding insurance to cover damages.

But the illegal immigrant who passes the driving test required in order to acquire a legal driving license has other more inclusive options that, like any US citizen, can shield him or her more comprehensively.

These include the options of:

Collision Insurance Coverage – this compensates for the cost of damage incurred to the at-fault driver as well

Comprehensive Insurance Coverage – this provides payment for other losses incurred as a result of a stolen automobile, car vandals, or the damage from a natural disaster

Uninsured/Under-Insured Motorist Insurance Coverage – this provides coverage for damages resulting from an accident with a driver that does not have adequate auto insurance

Irrespective of your standing in regard to residency or citizenship, if you are a legal driver it is wise to seek guidance and advice from a qualified insurance professional in relation to insurance coverage options that are applicable to your individual circumstances.



Source by M Wyzanski

The Benefits Of Water Storage Tanks

The installation of water storage tanks assist in the collection of excess rainfall that can be used for various domestic purposes. Purchasing these units requires consideration as to whether the tanks will be located below or above ground offering ease of use and management. The following tips can assist in choosing the containers to store sufficient volumes of liquid.

For water savings and storage options, including an above ground tank can provide residential and commercial properties with many benefits. It is an efficient option offering cost savings for consumers who no longer need to rely on the supply from local authorities for minor watering tasks. The stored volumes are commonly used in the garden, car washing and related tasks allowing for greater savings.

Keeping the system a distance from the surface offers a more efficient storage solution including ease of maintenance. It is easier to install these types of units in comparison to the underground tanks relying on additional construction and expertise from a professional and a reputable installation company. A professional approach can determine the most effective options that are compatible with home and business usage requirements.

Most prefer these tanks to remain on the surface of land as it will not require any form of excavation for installation. This will reduce the costs involved in labor as less time is spent digging and having to create a supported foundation for the location of these types of units. Digging into the soil includes additional safety standards that need to be followed to minimize injuries or damaging the system.

The management of tanks requires a regular clean by rinsing the inside of the container and removing any mold and algae that have formed along the interior. Scheduling emptying of units will make it easier to wash and remove any grit or grime that has accumulated over time. Performing these methods is made more efficient and simple when units are not positioned underground offering ease of drainage.

Underground tanks are more expensive because it is incorporated in building plans in the construction or renovation of homes. Securing these systems below the surface can minimize taking up a significant amount of backyard space for smaller gardens. It is harder to clean and requires the development of a strong and safe foundation to safeguard against damages that can occur over time.

When looking to incorporate a water storage tank, it requires the services of an experienced and reputable installation business. Professionals can advise on which locations will prove best for collection and the size of system most suitable for property requirements. Safe standards are upheld and implemented to protect from deterioration and provide consumers with ease of maintenance.

Securing a system to collect rainwater can prove most beneficial serving as an environmentally friendly alternative. A professional installer can advise on the types of units available and which of these offer the most suitable features. Learning about the advantages provided with an above ground water tank for storage can assist in making an informed buying decision with lasting results and an efficient outcome.



Source by Chandni Naresh Wadhwani

Auto Repair Shops Adopt Environmentally Responsible Practices

It's taken a long time to realize that some of the things that we humans did in the past are not the best practices for a healthy environment. Most everyone is now aware that it is important to include environmentally friendly practices in all that we do. This is as true for auto repair shops as it is for our households.

How can an auto repair shop reduce the negative impact on the environment?

Here are some good practices that an auto shop can adopt:

Recycle
Recycling antifreeze, oils, lubricants, air conditioning refrigerant, tires, oil filters are pretty much obvious and often required by law, but what about cardboard, paper, plastics, metal, fluorescent bulbs, glass and other objects so easy to just dump into the garbage bin? It takes a bit of time to sort everything, but if you have a system set up, then it only takes a few minutes every day.

Return Center
In addition to recycling your own shop use the products, make a return center for items such as used automotive lubricating oils, filters, antifreeze, used plastic oil and antifreeze containers and all types of batteries. In our shop we gladly accept liquids up to 20 Liters maximum, in sealed containers during business hours. It just makes good sense and provides convenience to customer who may otherwise have to go out of their way way to get rid of these items.

Recycled Oil
While we do not dispute the method or intention, we are not convinced it is a viable option for sophisticated modern engines like most cars have today. A better alternative is to have the waste oil removed by a government certified hauler to be consumed as fuel in large industrial plants. This gives the oil a new life and it is re-used in a responsible way.

Good Use of Recycled Products
Where it makes sense to use recycled products we do, for example recycled engine antifreeze and coolants where the process is up to standards of the original equipment manufacturer of the vehicle it is going to be used in. This is about two thirds of the coolant we use.

Automobiles
Let's face it, automobiles are mobile hazardous waste generators, even when they are sitting still. We have not found a way yet to achieve a near zero auto carbon footprint but it is our responsibility to reduce that negative impact as much as possible. That responsibility is shared by the car owner as much as it is by the shop that services that car. A car running in top shape does more than just reduce carbon emissions, a car service shop that adopts environmentally friendly practices contributes to a community's well being.



Source by Scott Waddle

Sync Your Travel With Truck GPS

Modern technology has brought many handy devices which made our lives easier and smoother. One such innovation that fits your pocket and becomes a guide, a navigator in any of your commutations is Truck GPS. These devices are alike to the GPS which we see in our smartphones that detect and navigate us through the route. However, the specialty of this system over the other products is its human friendliness and their aptness in routing the travel. The smartphone GPS system can’t render the specific details that this device able to. The device once set would give you every detail of the road you are traveling, the route you are heading towards and maneuvers heading up.

Besides that, the cell phone GPS system might be disturbed if you get a notification or call. Installing a GPS system is a solution to all such hassles. Let’s look at the Pros of a truck GPS system over smartphone GPS,

• Easy to Install: Installing this system is as easy as you download an app on to your smartphone. You need to follow the instructions provided step by step or take a professional help. Request your distributor to send in some professional help along with the delivery of the system.

• Speed Posting: you will be informed about the road you are traveling along with the speed of your car and the speed limit on that route. This will keep you from speeding up beyond the limits and prevent dangers.

• Fleet tracking: If you are into vehicles business, you might need this system to track your fleet of vehicles. This device would enable you to monitor vehicle’s route, speed, idle time and guide the driver to the right way, thus saving on fuel expenses.

• Quality service: With this system as you are tracking almost every action of the driver you can render best quality service to your customers if you are into cabs business.

• Alert notifications: This is a feature that enables you to understand and get notified about every detail of your vehicle under surveillance. You will get notifications about any sort of violations by your driver. Perhaps, it will send you a report or provides you reports on daily, weekly, monthly basis.

• Controlled Fuel costs: You can control or reduce the cost of fuel as the driver and vehicle both are under your eyes.

This will not only prevent uncertainties but ascertain the safety and security of both the driver and the customer. Get your truck GPS and have a safe and sound journey.



Source by Rizvana Manzoor