New research shows that your income has a direct correlation to how high your insurance premium is.

Your income has been found to determine how much you will pay for insurance.

Sadly, the answer is yes. How much you earn a year has been found in recent studies to directly correlate how much you will pay for insurance. While there are no underwriting factors that use income to determine your insurance premium, the factors that are used can understandably be seen as skewed towards certain income brackets.

Your Income vs. Your Insurance Premium

A study recently done by the Consumer Federation of America found that insurance companies often charge lower-income drivers more for their insurance premium than those that make more money. This study took into account more than 100 pricing studies on auto insurance to arrive at the results.

The study claims that insurance companies use rating factors such as the location a person lives or works in, credit history, age and education as ways to get around the illegal practice of charging drivers based on income level. Lower-income drivers usually have little education, live in locations that are not considered to be safe by the insurance companies and generally have bad credit histories due to the lack of money to pay bills. Because every single rating factor here ends up being rated negatively against them, the insurance deck is actually stacked against a low-income driver.

The study also found that drivers with lower incomes, pay more for just the minimum required insurance than drivers with higher incomes do for much more insurance coverage.

Insurance Companies Defense of Insurance Premiums

When this study was released at the end of January, the insurance companies that responded defended their rating practices. Stating that they do not rate base on income, and the rating methods that they do use are used to determine how high of risk a specific driver is. In other words, it was all just a coincidence that the lower-income drivers paid more.

At the same time, these insurance companies do not share how they figure or calculate how a driver with a college education and a job that pays well, is a better driver than one that only graduated from high school and works at a gas station. There is no way to determine if their rating methods are really income biased or not.

Not Insurance Premium Redlining

We have talked about the illegal practice of redlining, where insurance companies charge higher premiums to minorities in specific locations. This study is not about this type of unfair practice of concentrating on a specific geographic location, it is about income levels. These higher insurance premiums are more spread out geographically, but concentrate instead in specific income brackets.

What Can You do About Your Insurance Premium

If you feel that you are being unfairly charged for your insurance you have two options. One, you can file a complaint with the Insurance Commissioner or Department of Insurance in your state over the unfair insurance premium amount. They will look into the complaint for you, but honestly with the way the insurance companies have it set up, you probably won’t see a resolution. If enough people complain about one company though, it may force an insurance premium rating change.

Two, look for a different insurance company. This action will get you the fastest results as each insurance company has different underwriting standards and rating process. While you may not get the cheap rates that other income brackets may have, you can still do better than where you are. Besides, it is good to go insurance premium shopping every couple of years anyway, to see what other companies are charging.

PEMCO uses the local company angle to sell its insurance coverage.

Summary

Commercial opens with two vehicles approaching a four-way stop at the same time.

Announcer: Politeness is nice.

One driver signals to the other driver to go ahead through the intersection first. The other driver signals back for him to go first.

Announcer: It’s gracious,

Both vehicles start to go through the intersection at the same time and both come to a sudden stop.

Announcer: It’s well-mannered.

First driver once again signals to the other vehicle to go first, this time not looking as cheerful.

Announcer: But, no one ever said it was efficient.

Both vehicles once again try to go through the intersection at the same time and both come to a sudden stop again.

The words “Northwest Profile #4” come on the screen.

Announcer: 4-way stop you go, no you go, no you go guy (word appear on the screen as announcer says them), you’re one of us.

Jogger now approaches the intersection.

Announcer: And you deserve a local insurance company that doesn’t hesitate to put customers first.

Now the two cars and the pedestrian are doing the “you go first” dance and everyone is starting and then stopping again.

The screen goes to an olive green with the PEMCO INSURANCE logo and “We’re a lot like you.” on the screen. Under the sign are the 3 insurance products they write, their phone number and “call your local agent or visit PEMCO.com”.

Announcer: We’re a lot like you; a little different.

Point of the Commercial

PEMCO Insurance is making two points in this commercial. One, they are making the connection with drivers in the Pacific Northwest that they are from here and they know how life is in this part of the country. Because they are from this specific area, they can take care of you better than a company that is headquartered back east and probably thinks the capitol of Washington is Seattle.

Two, the politeness issue isn’t just funny, it’s making a point about the PEMCO Insurance company. In fact, they directly address it at the end of the commercial when the announcer makes the connection that PEMCO is just like the polite driver , but instead of letting the other car go first, they put you the customer first.

What They Want you to Do

They want the drivers in the Pacific Northwest to trust them because they are local. They want these drivers to switch to them from the large national companies for the same reason. PEMCO is actually playing a very strong card here. In the Pacific Northwest there is a large “Buy Local” movement to encourage people to keep their money local and help out the economy in the area that they live in.

My Opinion

I’m not sure if this is what happens in the other parts of the country, but PEMCO hit it right on the head for those of us that live in the Pacific Northwest. I have played the part of both drivers and the pedestrian, stuck in this overly, polite intersection stand-off.

Aside from that, PEMCO has a whole series of “Northwest Profile” commercials to make the point that they are a local company and that they understand what it is like to be a driver here. The commercials are simple, they are different (in other words it doesn’t mention being better than GEICO) and it makes a point.

Overall, even though it isn’t my favorite commercial; I would still give this PEMCO Insurance commercial a thumbs up.

Don’t get stung for not having Utah car insurance in the Beehive State.

Utah car insurance is pioneering the way by not following the methods of other states when setting liability limits.

Utah car insurance requirements are definitely different when compared to other states. Not because of what they require, but because of the amount they require one certain coverage. The amount that they require for the total bodily injury under the liability coverage is more than double from what is required for one person. This stands out because most of the other states just double the single amount.

Regardless of how different it is though, don’t get caught without it or you will end up paying a lot more than if you were to just stay insured.

Limits Required for Utah Car Insurance

Required liability coverage for Utah car insurance:

• $15,000 for another person’s property damage

• $25,000 for injuries caused to another party not in your vehicle

• $65,000 total paid out for all injuries to other parties not in your vehicle

Required coverage for you under Utah car insurance law:

• $3,000 in personal injury protection coverage to pay for your own medical expenses resulting from a car accident

Utah Car Insurance Enforced with Insure-Rite

One state after another is turning to electronic monitoring of insurance compliance. One way or another these computer systems keep track of the car registrations in the state and then take action when there is no insurance currently active on that registered vehicle.

In Utah they use a system called Insure-Rite. This system matches up the vehicles registered in the Utah DMV computer with the information that it gathers from the insurance companies that sell insurance in Utah. When the system finds a car that is registered, but has no insurance on it, the system automatically generates a letter. This letter goes to the registered vehicle owner asking them why they have no insurance. They have the chance to respond on the letter as to why there is no insurance or provide proof that it is a system error and that they are in fact insured.

Penalties for No Utah Car Insurance

If you are caught without Utah car insurance on a registered vehicle, it is going to hurt. Driving without Utah car insurance is a Class B misdemeanor. The first time you get caught your fine will be no less than $400. If you just didn’t get the message and get caught again, your fine jumps to $1000 for each time after that.

These fines are just the start, you will also lose your driver’s license and your car registration will be suspended.

Getting Your Utah Car Insurance Back on Track

When you decide you are ready to drive again after getting caught without insurance the first time. Your license will have to be reinstated along with your vehicle registration. To reinstate your registration, you will have to purchase Utah car insurance with an SR-22 form on it. This means that your insurance is going to be much more expensive than before.

After you provide your proof of Utah car insurance and pay your $100 reinstatement fee, you will be allowed to re-register your vehicle.

A U.S. car insurance policy is only valid if you are visiting Canada.

If you are living in Canada, the Canadian government requires that you carry Canadian car insurance. It is understandable that as a student you may still be a United States citizen and only in the country temporarily, but you are still living there.

The only time that the Canadian government will accept United States car insurance as proof of proper insurance coverage is if the driver is in the country as a tourist. Even then they still have to have a special card on hand issued by their U.S. car insurance company as proof of insurance extending into Canada.

If you find your car insurance dropped, there is really little you can do to retaliate.

Rejection is hard to take, even if it is in the form of your insurance company cancelling your policy. You wonder what you did wrong, how you could have made it work out, and then you get mad that they don’t want you.

Seriously? This is an insurance company we are talking about, not a boyfriend or a girlfriend. Insurance companies are everywhere and there is usually another company willing to take your money if you find your car insurance dropped by another.

I know that it still makes you mad that they are dropping you and you want to get back at them. Honestly, once you have had your car insurance dropped, there is nothing you can do to make the insurance company change their mind.

However, here are some ways to prevent having your car insurance dropped in the first place.

Car Insurance Dropped Right at Beginning

You walk out of your new insurance agent’s office with your new insurance policy in hand and very proud of yourself for the great deal you just got on your new insurance. That is until a couple weeks later when you receive a letter in the mail that your new policy has been cancelled.

What happened?

The primary reason for an insurance policy to be cancelled soon after it is initially issued is that all of the information was not given when the policy was written. This means that you either lied about previous accidents and tickets or they were forgotten. Either way, this additional information can disqualify you from being eligible for insurance with a particular company. At the very least, if you don’t find your car insurance dropped, you will see a large increase in your premium.

A lot of people with accidents and tickets think that if they don’t disclose the information that it will never be found out. However, the insurance company pulls a DMV record and C.L.U.E. report on every single person it insures, so even if you don’t disclose it, they will still find out about it.

It’s always best to be open right from the start to prevent finding your new car insurance dropped.

Car Insurance Dropped at Renewal

When you have received a letter from your insurance company that you will find your car insurance dropped at renewal, this is called a nonrenewal. It means that something happened during your last insurance term that makes the insurance company no longer want to insure you. The biggest reason behind a nonrenewal being issued is an accident or traffic violation happening during the last insurance term.

You can also see your car insurance dropped at renewal for the following reasons:

• Change in insurance company ownership, leading to a change in underwriting criteria.

• Change to the insurance company’s finances that have led to stricter underwriting criteria.

• Drivers being added to your insurance policy that make your policy a higher risk than the insurance company is willing to take.

• Getting older and no longer fitting the company’s definition of an acceptable risk.

• Changing vehicles to one that the insurance company does not insure, such as a high, price sports car.