Time for an update on new developments on auto insurance:

• Premiums likely to rise in most states in 2016 (from MoneyWatch):”The lowest gas prices in years could wind up helping to drive up car insurance payments for U.S. motorists. As Americans put more miles on their cars last year, motor vehicle deaths rose 8 percent, and as a result, car insurance premiums are likely to rise in 2016.

  The National Safety Council (NSC) estimates that 38,300 people were killed on U.S. roads in 2015, and 4.4 million were seriously injured. “2015 likely was the deadliest driving year since 2008,” said the NSC, a nonprofit, nongovernmental organization that promotes health and safety in the U.S..”

• Renters pay more for car insurance than homeowners (Consumerist):

“The Consumer Federation of America recently tested auto insurance rates from the nation’s largest providers in ten different cities from coast to coast, and found that some renters are paying upwards of 47% more for basic liability coverage than homeowners.”

• What will happen to auto insurance as autonomous vehicles hit the highways (Christian Science Monitor)?

“Self-driving cars, such as the fleet Google has been operating for several years, are still mostly a curiosity. But it seems inevitable that they will become a significant part of the nation’s transportation infrastructure in the near future.

And that could mean a huge downsizing of the auto insurance industry, as the frequency of accidents declines and liability shifts from the driver to the vehicle’s software or automaker. It could also greatly reduce what we pay for car insurance.”

• Insurance companies using “Big Data” to measure driver performance and set premiums (Indy Business Journal):

“For decades, auto insurance rates have hinged on rough measures of a person’s driving habits, such as accidents or speeding tickets. But the future will see auto insurers peeking in on every slam of the brakes and pump of the gas pedal.

Two dozen auto insurers in Indiana already have launched at least small-scale usage-based insurance programs, according to the Indiana Department of Insurance. Liberty Mutual Insurance is piloting a program in Indiana and Michigan that uses a smartphone app to record specific driving habits, such as hard stops, fast acceleration, nighttime driving and total miles driven. Customers that score well on those measures can earn discounts of up to 30 percent.”

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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