To read more visit:

http://www.walletpop.com/blog/2010/01/29/auto-insurance-premiums-tied-to-credit-score/

Read the full story here:

http://online.wsj.com/article/BT-CO-20091111-709421.html

A car’s vehicle identification number (VIN) is the automotive equivalent of human “DNA”.

It sets the vehicle apart from the millions of other vehicles out there. In recent times it has been reflected in 17 digit characters. It displays a car’s uniqueness and heritage and provides a form of “factory to scrap yard” identification. It can be used to track recalls, registrations, warranty claims, thefts and insurance coverage. Each character or digit has a particular purpose.

History of the VIN

Detroit automobile manufacturers began stamping and casting identifying numbers on cars and their parts in the mid 1950’s. The primary purpose of this vehicle identification number (VIN) was to give an accurate description of the vehicle when mass production numbers were starting to scale in very significant numbers. The early VINs came in a range of variations depending on the individual manufacturer at that time.

In the early 1980’s the U.S. National highway Traffic Safety Administration (USDOT) required that all road vehicles must contain a 17 character VIN. This established the standard fixed VIN system which major vehicle manufacturers use currently. The result was a unique “DNA” style number for each individual vehicle rolled off the assembly line.

The Vehicle Identification Number was originally described in ISO Standard 3779 in February 1977 and last revised in 1983. The ISO-VIN was designed to identify motor vehicles, trailers, motorcycles and mopeds and consists of several parts described below.

How to read a VIN

1st to 3rd Character - World Manufacturer Identifier (WMI)

Note than not all the codes have 3 positions. In the case of two position codes, the blank code is not a blank, but usually represents part of the body style or division. If the third position is a “9″, it means that the manufacturer will produce less than 500 units per year.  Here is a  list of some of the more common VIN prefixes.

4th to 8th characters - VDS - Vehicle Descriptor Section. These 5 characters occupy positions 4 through 8 of the VIN and may be used by the manufacturer to identify attributes of the vehicle. Identifies vehicle features such as body style, engine type, model, series, etc.

9th Character - The check digit “character or digit 9″ in the sequence of a vehicle identification number (VIN) built beginning with model year 1981 (when the 17 character digit format was established) can best be described as identifying the VIN accuracy.

A check digit shall be part of each vin (since 1981) and shall appear in position nine (9) of the VIN on the vehicle and on any transfer documents containing the vin prepared by the manufacturer to be given to the first owner for purposes other than resale. Thus, the vins of any two vehicles manufactured within a 30 year period shall not be identical. The check digit means a single number or letter “x” used to verify the accuracy of the transcription of the vehicle identification number.

After all other characters in the VIN have been determined by the manufacturer the check digit is calculated by carrying out a mathematical computation specified. This is based on vin position, sample vin, assigned value code, weight factor and multiply assigned value times weight factors. The values are added and the total is divided by 11. The remainder is the check digit number.

The correct numeric remainder - zero through nine (0-9) will appear. However, if the remainder is 10 the letter “X” is used to designate the check digit value/number.

10th character - Identifies the model year. For example:

• 1988 - (J)
• 1989 - (K)
• 1990 - (L)
• 1991 - (M)
• 1992 - (N)
• 1993 - (P)
• 1994 - (R)
• 1995 - (S)
• 1996 - (T)
• 1997 - (V)
• 1998 - (W)
• 1999 - (X)
• 2000 - (Y)
• 2001 - (1)
• 2002 - (2)
• 2003 - (3)

11th character - Identifies the assembly plant for the vehicle.

12th to 17th characters - VIS - Vehicle Identifier Section. The last 8 characters of the VIN are used for the identification a of specific vehicle. The last four characters shall always be numeric. Identifies the sequence of the vehicle for production as it rolled off the manufacturers assembly line.

Interestingly enough, through comparing June of 2009 to June of 2008, the company Cheap Auto Insurance has stated that insurance rates are at the lowest points they have been during the twelve-month span. Just this summer, there was a documented 6% reduction in the cost of insurance policies compared to the previous month.

While more consumers seek lower rates, RateWatch has observed that car insurance rates are in fact 12% higher in 2009 than they were previously in 2008, but not everywhere. Likewise, states such as Massachusetts have witnessed car insurance rates dropping by 8% in the past year. States such as Alabama, Mississippi, and Ohio have witnessed drastic rate declivities in the past month; however, others, like Nebraska and Delaware, have observed slight increases in their rates.

Simply because there is an increased demand for lower insurance rates does not necessarily guarantee that each and every insurance provider will offer them. Companies such as Allstate and StateFarm have already raised their rates for homeowners insurance by about a whopping 15% in the past few months, which help offset losses for issuing cheaper car insurance.

This price increase is not just limited to home insurance. Given that credit is tight for everyone, car insurance companies are also looking for ways that they can save a quick buck. One of the easiest ways to accommodate this challenge is to raise their premiums in the hopes that rival companies will follow their lead. Home owner rates has been a success for insurance companies, and according to industry insiders, car insurance rates will also climb over the next few months. Other market factors have contributed to the rise in rates; including the rising cost of claims payouts and an increase in the number of cases of insurance fraud.

Although rates may be rising in general, it is still possible to find small and private-owned companies that are willing to negotiate prices much more than some of the larger, national corporations.

Given the economic challenges that many consumers are facing, it is unsurprising that, according to the TNS/Google study, the number of customers looking for new car insurance premiums has increased 20% in the past year. Evaluating your purchasing options through an informed perspective can help you save money in the long run, as long as you have taken the initiative to engage in the correct research. To conclude, there is no better time than the present to consider obtaining a better insurance plan.

By Jamie McGee

June 23 (Bloomberg) — Fewer motorists sought to change their insurance company for their vehicles as the U.S. recession spurred a “hunker-down mentality,” according to a J.D. Power and Associates survey.

The proportion of customers seeking a new insurer fell to 28 percent in the 12 months ended in March from 36 percent in the year-earlier period, the marketing company said today in a statement. The study showed a slump in shopping in the fourth quarter and January, and some companies reported a rebound in recent months, Jeremy Bowler, J.D. Power’s senior director of insurance, said in an interview.

“Many customers are employing a hunker-down mentality,” Bowler said in a statement. “Most customers would prefer to hold tight to their current provider, which they already know, rather than risk trying a new provider.”

Auto insurers’ premiums have declined as drivers reduced coverage in response to the recession and profits dropped on investment writedowns. Consumers most often cited price as a reason for their shopping, and more than a third said price was the reason for switching carriers. Ninety percent of customers stay with their current provider, J.D. Power said.

Berkshire Hathaway Inc.’sGeico Corp. and Progressive Corp. have reported gains in shopping volume this year. Progressive added 242,200 auto customers in the first four months of the year, while Buffett told shareholders May 2 that Geico added 505,000 customers.

“Geico is shooting the lights out,” Berkshire Hathaway Chief Executive Officer Warren Buffett said in a Bloomberg Television interview in March. “It’s something in the American psyche, where the guy who didn’t care about saving $100 on his auto insurance policy or some number a year ago, and preferred to not make the change, they’re coming to us now.”

‘Switching Behavior’

Shopping “behavior was up fairly dramatically” in the first quarter, Progressive CEO Glenn Renwick told analysts and investors at a June 11 meeting. “We’re still seeing a fair amount of switching behavior.”

Erie Insurance in Pennsylvania ranked highest in J.D. Power’s customer satisfaction survey of auto insurers for a second consecutive year, scoring 893 points out of 1,000 for its distribution methods, prices and policy offerings. American Family Mutual Insurance Co., based in Madison, Wisconsin, ranked second, followed by Hartford Financial Services Group Inc. and Geico.

American International Group Inc. ranked lowest among 22 companies with a score of 813 and Safeco Corp. was second to last with a score of 825.

Erie and American Family won top scores for local agent distribution. Hartford won a top score for its call center and Geico for its call center and Web site, according to the study.

Shopping rates are based on a survey of 300,000 households, Bowler said. Customer satisfaction is based on responses from more than 13,500 consumers who asked for an auto insurance price quote from at least one competitive insurer from February to March, J.D. Power said.

HIG US CN BRK/A US CN AIG US CN SAF US CN PGR US CN

To contact the reporter on this story: Jamie McGee in New York at Jmcgee8@bloomberg.net
Last Updated: June 23, 2009 17:04 EDT

Many insurance providers are revving up auto insurance rates across Arizona, continuing an upward trend that began last year.

According to the Arizona Department of Insurance, 77.46 percent of insurers that have reported auto insurance rate changes this year either have or are increasing their rates. The highest percentage increases are Colorado Casualty Insurance Co., a Liberty Mutual Group company, up 30.20 percent, and Garrison Property and Casualty Insurance Co., a USAA company, up 30.10 percent.

Insurers have all year to report any changes they make to their auto insurance rates, said Erin Klug, department spokeswoman.

“There’s no requirement that they change their rates at any particular time,” she said.

In 2008, an overall average increase of 3.72 percent was reported among insurers filing rate changes that year, according to the department. That’s up from a .32 percent decrease in 2007.

“There is a small uptick … in insurance rates that appears to be happening at this time,” said Ron Williams, executive director of the Arizona Insurance Council. “It’s balanced by the fact that in 2006, the 20 largest insurers in the state dropped their auto insurance rates by 5 percent.

“We have times when the competitive nature of the insurance business here in Arizona allows for rate decreases, and then we have these times where losses and costs that insurance companies incur result in higher rates.”

Colorado Casualty has been paying out more in claims than it has been receiving in premiums, said spokesman Paul Hollie. Colorado Casualty insures commercial vehicles, he said.

“(Premiums in Arizona are) underpriced for the risk that the insurance company takes, so from time to time you have to make adjustments based on market,” he said. “Additionally, Colorado Casualty is still very competitive in that marketplace. Some customers, depending on where they are in the spectrum, will actually see a rate decrease.”

Clay Allen, USAA spokesman, said USAA companies, including Garrison Property and Casualty, had a combined auto insurance rate increase of 9.9 percent this year in Arizona. Garrison is a newer USAA company that began providing insurance in Arizona three years ago, he said.

“After a few years of loss experience in claims, we determined that those original Garrison auto insurance rates were inadequate, and that’s why we filed the rate increase,” he said. “Overall, Garrison and our other companies, we’re seeing our auto loss trends steadily increase, and those are being driven by a growing number of claims and higher repair and related medical expenses associated with those claims.”

USAA provides coverage to military-related personnel, including active duty and reserve, retired or direct family of a military member.

None of the three largest auto insurers in Arizona - State Farm Mutual Auto Insurance Co., Farmers Insurance Co. of Arizona and American Family Mutual Insurance Co. - reported increases. In 2008, those companies had 30.3 percent of policyholders across Arizona.

State Farm hasn’t filed any rate change, while Farmers reported a .4 percent decrease and American Family reported a 3.1 percent decrease.

State Farm’s auto insurance products are appropriately priced to risk, said spokeswoman Cheryl Willis-Blakes.

Arizona’s highly competitive insurance market means consumers have plenty of choices if they feel their rates are too high, Klug said. The department’s Web site includes an auto insurance premium comparison guide, at www.id.state.az.us/autopremium.html.

Policyholders should examine their policies at least once a year to see if they could be paying less, Williams said.

“The insurance companies really do vie for our business, so consumers are encouraged to do some comparison shopping,” he said.

Current Car Insurance Rates Climb

Today’s car insurance rates are hitting drivers with already shallow pockets hard. Across the nation rates are on the rise. Despite the fact a driver’s recent record may be clean, rewards in the form of lower car insurance rates are few and far between. Many are seeing their rates even without the event of a ticket or at-fault accident.

Car insurance companies claim the payments they’re paying out are also on the rise. Like so many sectors of the economy, tough times mean higher prices. That is exactly what drivers and insurers alike are being faced with.

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Car insurance adjustments add to cost of using car scrappage scheme

By Diane Ray. Published on June 19, 2009 This post currently has no comments.

Whilst the car scrappage scheme seems to be having some impact on new car production, many car insurance companies are cashing in and charging high mid-term adjustment fees, hitting those scrapping and swapping their car.

Car insuranceThe SMMT (Society of Motor Trade Manufacturers and Traders) has today announced that car production is down again but the drop in May was the smallest of the year so far.

So whilst the outlook remains difficult there is some sign that the car scrappage scheme is lifting the volume of new car sales.

However, those participating in the car scrappage scheme are, according to uSwitch.com, largely incurring significant ‘admin’ fees for making changes to their car insurance policies as they move their insurance from the old to the new car.

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