5 Ways to Save on Auto Insurance

by Guest on December 21, 2010

DilemmaEveryone likes to save money; however, the ways to save aren’t always obvious. Auto insurance can be costly, but you don’t have to sacrifice an arm and a leg to stay insured. Follow these five tips to save some serious money on your car insurance.

Universal Coverage for…Car Insurance???

by Alexandra McDougald on September 18, 2009

Car WreckA few weeks ago, in the middle of the evening rush hour and during one of Washington, D.C.’s infamous summer rainstorms, I was side swiped.  The fault was completely on the part of the driver that hit me.  After this lovely woman insisted, while screaming at the top of her lungs, that the accident was my fault, we exchanged the necessary information.  I looked down to the portion of the torn piece of paper where she had written her insurance information, and saw that she had listed a company called MAIF as her automobile insurer.  I thought innocently, “huh, never heard of these guys before.”

When I got home I Googled “MAIF,” and was shocked at what came up.  Turns out MAIF stands for the Maryland Auto Insurance Fund, which was, according to the Web site, “created by the Maryland State Legislature in 1972 for the purpose of providing automobile liability insurance for those residents of the State of Maryland who are unable to obtain it elsewhere in the private insurance market.”  What does this mean?  It means the state of Maryland has a government run and subsidized car insurance program for residents who have been priced out of the commercial auto insurance market.  This usually happens due to drivers being involved in multiple car accidents, which causes insurance premiums to increase until they eventually become unaffordable.  I’m not a resident of Maryland, and I’m a liberal who believes in big government, but I’d be pretty teed off if I knew that even one penny of my tax dollars was going directly or indirectly towards a program that seems to have been designed to help insure reckless drivers.  I’m all for universal coverage when it comes to health insurance, but for car insurance – nope not on my dime. 

An Obvious Way to Lower the Cost of Insurance

by Brian Johnson on June 23, 2009

InsuranceAt a time when everyone is looking for a way to make their money stretch further, one solution to curb rising insurance costs is to regulate insurance at the federal, rather than state, level.  Such regulation would require tax payers to pay for one regulatory body (rather than fifty) and would allow the insurance providers themselves to more easily and more cheaply operate at a national level.  Thus the price of insurance  would go down through increased competition.

To better understand this point, we must first acknowledge that for every business, there is inherently a cost associated with operation—whether it be the cost of raw materials, the rent on a storefront, the salary of employees, etc.  For insurance companies, part of their operation cost is related to staying within compliance of state regulation.  As insurance is regulated at a state level, rather than the federal, the various laws that govern the operations of these companies change depending where you are in the country.  It stands to reason then, that the cost of staying in compliance in Georgia, doubles if the company must also stay in compliance in Montana.  A company that offers insurance policies nation-wide must pay an increased overhead so as to simultaneously stay in compliance for all of its customers in all fifty states.  With only one set of regulations, however, any state insurer could make the transition to a regional or national insurer without having to incur additional costs.  Thus a change in regulation would increase the number of providers in the market and would lower the overhead costs for all the insurance companies.  The combination of a lower cost structure and increased competition, would bring in a better price for consumers.

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