Insurance Helper Blog




Driverless Cars And Your Auto Insurance

Driverless cars are coming.  When, we don’t know for sure but there is no doubt that at some point in the future, most all vehicles on the road will drive themselves and we humans will all become passengers on our highways.  There will be some huge benefits from this change once we have migrated fully to the driverless car.  Traffic jams should occur less frequently, accident rates will go down, fuel economy will increase, auto insurance rates will go so low as to nearly disappear, and you can say goodbye to that annoying creature known as the back seat driver.  But before we can get to this point, our society will have to solve some very sticky legal liability issues.

It is very possible that the technology hurdles that need to be jumped in order for our highways to incorporate driverless cars will be a distant memory before we have solved the liability issues on our roadways.  This legal maize may be the chokepoint that delays the future of the driverless highways in America.  This is because when you remove the driver from the equation regarding the cause of an accident, you open the door to so many different parties that the uncertain liability exposure could stop the very driverless industry in its tracks.  Do you blame the technology designer, the parts manufacturer, the highway system, the auto manufacturer or the car owner or someone else?

At this time, several states are working through these difficult issues independently.  Arizona has considered and weighed bills regarding driverless car liability but at this time has put no laws on the books.  Last year, California passed a law that directed its State Department of Motor Vehicles to come up with rules by 2015.  Florida passed a similar law giving its DMV until 2014 to come up with rules.

The state that has gone the furthest so far in this process is Nevada, which developed a 22 page section of rules that govern driverless vehicles and which licensed Google, Audi and auto parts maker Continental AG to test them on public roads.  So far, Nevada doesn’t allow self-driving cars for anything but testing.  These vehicles must first go through 10,000 hours on closed tracks and the tester has to put up a $1 million bond to cover any potential liability.

Of course it is difficult to make rules about driverless cars and their potential liability when in fact we don’t have them on the road yet.  It becomes a bit of a chicken and egg question as there are many issues that will need to be addressed which we don’t understand yet simply because we don’t have the cars now to help us determine exactly what those future issues might be.  But the heavy hand of the auto manufacturers is already deep in the process.  Their fear is that if they are stuck with all liabilities from any and all accidents, then the driverless car revolution will never happen.  The Alliance of Automobile Manufacturers was able to work in a provision in the Florida bill which exempts the auto manufacturer from liability if injuries result from a modification of a self-driving vehicle.

In truth, there is great risk in having our states develop a patchwork of different laws.  In the end, one overreaching federal law will probably better serve us so that manufacturers and driverless car owners as well as insurance companies can all know that they are working with the same sets of rules in every state.  At this time the federal government has been relatively quiet on this topic but with the states beginning to show activity, it is probably only a matter of time before this becomes a national issue that the federal government will address.

Driverless cars should ultimately mean lower car insurance rates for most all consumers.  But until that time comes, you need all the help that you can get.  Give us a call, toll free, at 877-687-7557 if you would like help in reducing your auto insurance costs.


EFT And Your Insurance Policies – So Much More Than Simple Convenience

Today’s news had an article stating that very soon, the Social Security Administration will no longer pay benefits by check.  93% of payments now are handled by Electronic Funds Transfer, or EFT and now the federal government is working on getting that last 7% weaned off of their paper checks.   The same sort of change has been taking place in the insurance industry with less and less people paying their monthly insurance bills by check.  But there are more benefits to you of signing up for EFT payments than you might realize at first glance.

Let’s start with what the insurance company can offer you if they don’t have to send out a paper bill and then process your paper check each month.  To begin with, they will save money.  Back to my original example, the federal government says they can save over $100 million per year by getting social security recipients off of the paper check system.  Those savings apply to insurance companies as well.  A few of them will give you some of these savings back.  Auto Owners Insurance will apply a $5 credit to your policy if you sign up for paperless processing with them.   Most insurance companies will also waive the monthly installment fee on your policy if you sign up for EFT.  With some companies charging as much as $5 per installment per policy, this can add up pretty quickly.

Another relatively overlooked advantage of EFT insurance bill payment is the cancellation protection that it gives you.  Consider if you are out of town when your monthly bill comes in or it gets lost in the mail and you fail to pay it.  At the worst, you might have an uncovered loss that could destroy you financially.  But on the other end of the spectrum, you might have to pay fees to reinstate your policy or you might owe fees to your license tag agency for a lapse in coverage on your auto insurance while you still had the tags in your possession.   With EFT, you don’t risk a cancellation of your policy for nonpayment of premium, unless of course you don’t keep enough money in your account to cover the EFT deduction.

And this brings me to the most common objection that I hear from customers who are considering EFT for their insurance policy.  They are uncomfortable with the idea of a big insurance company reaching into their bank account and withdrawing funds each month to pay premiums.  While I understand the basic privacy issues that generate these concerns, I believe that they are mostly without merit.  EFT charge errors are extremely rare and in our experience, insurance companies are quick to correct their errors and pay any bank charges that they may have caused.  Face it, you are going to have to pay the insurance payment anyway, so you will need the money in your bank account either way.  But with EFT you can also get one additional benefit.  Most insurance companies will let you choose which day of the month the money will be withdrawn.  So, if you get paid on the 1st and the 15th of the month for instance, you might want to choose the 19th as the withdrawal date so that you are confident that you have money in your account each month to cover the EFT withdrawal.

There is one more iteration of this concept that I have found adds another benefit.  Many insurance companies will simply charge your credit card each month for your monthly premium instead of withdrawing from your bank account.  This has two additional advantages.  First of all, you won’t need to worry about keeping enough money in your checking account to cover the charge as you will be able to just pay it off when the credit card payment is due.  In addition, if you have air miles or some other perk on your credit card, you can now apply your insurance expenses to those perks and increase the benefits for yourself.

If you have any questions about how EFT or automatic credit card payments might be useful to you with your insurance policies, please give us a call, toll free, at 877-687-7557.  We would love to help you understand this better.