State Farm Targets Teen Drivers with New iPhone App

State Farm has released its second iPhone application, this time targeting teen drivers looking for insurance discounts, and it’s already been downloaded more than 9,000 times since its launch last month.

The application, Steer Clear Moblile, uses trip logs, self-assessments and video presentations to engage drivers under the age of 25. They download the safe-driving program to their iTouch or iPhone, but are cautioned about using it while actually driving. The app is one of three ways young drivers can use State Farm’s Steer Clear discount program to save up to 15% on their insurance premiums.

State Farm mobile team business analyst Blake Giles said that the app’s developers are aware that some young drivers are less than comfortable telling their parents they need help improving their driving skills. “We thought we’d take this as an opportunity to take a device we know teens use … and provide some (information) that will hopefully convince them to come to State Farm,” he said. Then he continued, “But if not, that’s OK. It’s a chance to be able to provide suggestions on how to drive safer. We thought everyone could benefit from that.”

State Farm’s first mobile app, released last June, is called Pocket Agent. It’s aimed at a broader audience, and allows customers to check their policy details or file claims from their cell phones. That app has been downloaded roughly 168,000 times.

Before the Steer Clear mobile app was launched, program participants had to download and print safe-driving documents from State Farm‘s website, or contact their insurance agent. The app follows the same tone as its non-mobile counterparts, but adds a driving tips section that is tied to weather conditions, and offers the ability to search for an agent.

Mobile users will still have to check in with an agent, in order to validate their completed self assessments, logs, and videos.

Tennessee House Panel Says No to Penalizing Drivers for Passengers’ Behavior

The Associated Press released a story last Thursday detailing the failure of the most recent Tennessee effort to prevent passengers having open alcohol containers in vehicles. The House State and Local Government Committee voted to send the bill, which was sponsored by Jon Lundberg (R – Bristol), to be studied after the General Assembly adjourns, which essentially means it will receive no further consideration during this session.

Existing state law makes it illegal to drink and drive in Tennessee already, but this bill wants to enhance the current legislation in two ways:

1. It would be a misdemeanor for a driver to have a blood alcohol content over 0.01 if there was an open alcohol container in the vehicle, whether or not the driver was actually drinking.
2. It would make it illegal for passengers to have open containers of alcohol in vehicles.

Rep. Curry Todd (R – Memphis), the committee chair, told the press that he supported Lundberg’s bill but had not been able to find enough votes on the panel. He added, “It’s already illegal to be drunk and drive. We were just trying to work it through.”

Representative Ulysses Jones (D – Memphis) also expressed concern over the bill’s ability to penalize drivers because of passengers’ behavior, saying, “On a charge when you’re just driving and you’re not drinking, I think it’s too heavy handed.”

The current law in Tennessee, which does not ban open alcohol containers in vehicles, is out of compliance with Federal guidelines on such matters, and this has caused part of the state’s share of Federal road money to be diverted to road safety programs, and specifically on DUI enforcement.

Michigan House Votes to Repeal Helmet Law

The Insurance Journal Governor Jennifer Granholm is threatening to veto it, but despite that the Michigan House of Representatives voted to repeal a motorcycle helmet law and re-establish one that allows motorcyclists to ride without helmets as long as they’re 21 years old or older.

The repeal was passed by the Democrat-led House on a 63-46 vote, and the bill now goes to the Republican-led state Senate for their review.

Twice in the past few years, the Democratic Governor Granholm has vetoed similar legislation. One of her spokeswomen said that Granholm supports the current law, which requires helmets to be worn by all bikers regardless of their age.

The Governor has stated that she has concerns about safety, and about what might happen to insurance costs if there were no mandatory helmet laws in her state.

Georgia Senate Says “Click It or Ticket” Should Apply to Pickups, Too

According to the Insurance Journal, earlier this week, the Georgia Senate revived a proposal that would require pickup truck drivers to wear seatbelts. The bill, which was approved with a vote of 45-2 was sponsored by Senator Don Thomas (R. – Dalton), a physician, who says the measure will save both lives and money in his state.

The proposal hasn’t ever managed to make it through the Georgia House, where it will be sent now, but Thomas feels that it will fare better this time, because of that chamber’s new leadership.

If the bill is signed into law, the state of Georgia, currently the only state that still exempts adults from wearing seatbelts in pickup trucks, will become eligible for federal incentive grants. While there are no lobbyists objecting to the bill, lawmakers from rural parts of the state believe it to be “unnecessary regulation.”

Maryland Drivers to See Auto Insurance Rate Hike

The Insurance Journal is reporting that drivers in Maryland are likely to see higher car insurance payments next year, thanks to a bill that the state House of Delegates is backing. On Tuesday, members of the House voted 97 to 36 to increase the required amount of auto liability insurance for motorists in their state.

If the state Senate, which is currently considering the bill, approves the changes, Maryland drivers would have to carry:

• $30,000 in automotive liability insurance for bodily harm to an individual

and

• $60,000 in liability insurance for accidents where more than one person is injured

These numbers are increased from the current minimums of $20,000 and $40,000, respectively.

A fiscal note attached to the bill states that the collection of taxes on the increased insurance premiums would significantly boost the state coffers.

If the Maryland Senate approves the bill, the rate increase would go into effect in January, 20111.

Colorado Median Insurance Rate Decreases while National Median Increases

InsuranceWeb is reporting a favorable change to auto insurance premiums in Colorado: according to their sources, the medium six month car insurance rate in the that state has decreased to $816, which represents a three percent drop over the last six months.

As with most states, there are different insurance trends for different segments of the Colorado population. These include:

• Colorado men pay roughly 8% more than Colorado women.
• Colorado drivers under the age of 19 pay rates over 100% higher than those between the ages of 60 and 74.

The rate decrease in Colorado is especially significant in light of the national median rate increase of roughly the same amount – 3% – over the same six-month period.

Colorado is currently #24 in the “affordability factor” ranking of state insurance premium averages. In other words, a household in that state where earned income is the median annual income of $47,158, and the insurance premium paid is also the median $816 is paying roughly 3.5% of it’s gross income for auto insurance. Using this formula, Massachusetts is the most affordable, with a factor of 2.0%, while Louisiana, where the median amount of gross income spent on car insurance is 7.6 percent, is the most expensive.

North Dakota Dead Last – In Auto Insurance Premiums

The Grand Forks Herald is reporting that the state of North Dakota has the country’s lowest auto insurance rates, as talled in a December report from the National Association of Insurance Commissioners. In the most recent year for which data has been compiled, 2007, for example, North Dakota motorists payed roughly $512/year in car insurance premiums, as opposed to the national average of about $795, and less than half of the average annual premium paid by drivers in New Jersy, who cough up about $1,100/year to keep their cars legal.

NoDak neighbors Iowa and South Dakota had the second- and third-lowest average insurance costs, at about $518 and $534, respectively. Other states near North Dakota had insurance premium averages that fell near the middle of the list – with the average around $666 in Montana (#19) and $721 in Minnesota (#24).

Who has the highest average insurance premiums? That honor goes to Washington, D.C., where drivers pay about $1,140/year for automobile insurance coverage.

The figures used in the list are based on the assumption that all insured vehicles carry liability coverage, but are not necessarily covered by collision or comprehensive policies, but even when using the “state combined average premium,” which takes all three coverage types into account, North Dakota still comes out at the bottom end of the payment scale, at the third-lowest average premium, with drivers paying about $658, with Wisconsin and Iowa coming in ahead of – or is that behind? – it, paying $643 and $658 respectively.

And at the top? Yep, once again it’s Washington, D.C. with average annual payments of roughly $1,289.

Court Decision, Texting Statistics Foretell Rate Increases to Come

The Insurance Journal is reporting on a story about a student at Texas A&M University has been slapped with damages totaling $22 million for causing a deadly wreck while texting behind the wheel. Reed Vestal’s vehicle crossed the center line and hit Megan Small of Houston head on in the accident, which occurred in November 2007.

Investigators discovered that Vestal sent and received 15 texts in the 45 minutes before the wreck occurred and made seven voice calls. Vestal, who declared bankruptcy before the civil trial concluded, did not comment on the verdict.

One can’t imagine what he might have to say. Twenty-two actions with one cell phone in 45 minutes behind the wheel? Vestal was doing something other than driving every two minutes during that time.

According to a survey conducted by Nationwide Insurance, eight in ten drivers actually support some degree of restriction on the use of cell phones in moving vehicles. Surprisingly, however, the majority favor limiting any kind of cell phone use at all behind the wheel.

• 80% support a ban on texting only
• 80% support a ban on emailing
• 67% support restrictions on phone calls

Three in four of those surveyed say that any legislation enacted should apply to all drivers and not just to specific groups.

Researchers at the University of Utah say that distracted driving slows a driver’s reaction time down as much as having a blood alcohol concentration of .08 percent. Drivers using cell phones are four times more likely to have a crash, and 10% of drivers age 16-24 are on their phone at any one time.

The insurance implications of both the decision in the Vestal trial and the Nationwide study are clear. Younger drivers and the parents who are most likely paying their auto premiums are going to be looking at even higher rates. The insurance industry is already feeling the affects of rising insurance fraud during the recession and distracted driving is becoming a hot button issue. Brace your pocketbook parents, the hurt is coming.

GEICO, CCAR partner with new GreenLink Shop Initiative

In a press release distributed this morning, The Coordinating Committee For Automotive Repair (CCAR) announced a partnership with GEICO in order to promote the “GreenLink Shop” designation for the insurance company’s Auto Repair Xpress (ARX) facilities across the country. This status, which is an extension of CCAR’s CCAR-Greenlink Environmental Compliance Assistance Center and S/P2 (Safety and Pollution Program) E-learning program is meant to increase consumer faith in the environmental and safety awareness and stewardship of local auto repair shops.

In his statement, William DeGrocco, GEICO assistant vice president told the press, “GEICO is proud to be partnering with CCAR on this important initiative. We have always promoted environmental awareness, and I am pleased that we will now have the ability through the GreenLink Shop program to recognize our ARX repair shops that meet and maintain this high level of environmental and safety standards.”

CCAR president and chief operating officer Daren Fristoe also spoke about the new partnership, saying, “GEICO has long demonstrated its commitment to the best environmental and safety practices in auto repair. We are proud to be working with GEICO in our GreenLink Shop initiative to recognize shops for their commitment to workplace safety and environmental stewardship. Companies in this program distinguish themselves both in the marketplace and in their community outreach.”

In order to receive the GreenLink Ship designation, an automotive repair facility must maintain rigorous standards of excellence in environmental, health, and safety (EHS) practices in four different categories: business operations, employee training, environmental management, and and safety compliance. There are separate criteria for collision repair shops and auto mechanical service shops, but CCAR’s initiative recognizes both.

Toyota Accused of Racketeering; Could Mean Triple Damages

As if the insurance claims and safety investigations aren’t enough, Reuters is reporting that Toyota is facing legal woes. Specifically, attorneys already seeking civil damages against the automaker because of diminished resale values on recalled models are now expanding their cases to also include racketeering charges. The use of federal racketeering laws to broaden existent consumer class-action complaints, which currently include more than eighty separate suits in at least forty states, exposes Toyota Motor Corp, U.S. to even greater potential liability than it was already facing.

Under the Racketeer Influenced and Corrupt Organization Act, commercial enterprises may be found liable for triple the damages for any harm caused by their fraudulent activities. This means, that litigation originally sticking Toyota for a bit over $2 billion in damages could now end up costing the Japanese-owned company more than $10 billion in payments to consumers, according to Tim Howard, lead counsel for a team of law firms which is handling roughly half of the cases.

When interviewed, Howard said that each of the amended lawsuits is, “…a much more robust and thorough complaint than the first rounds because of how the evidence has evolved since then.”

Reuters could not reach any one at Toyota for comment before going to press today, but this is unsurprising, as the automaker has consistently withheld comment on pending litigation.

Support for the revised complaints is based on a number of documents, and on congressional testimony by Toyota executives, to make the case that the automaker was aware of “unintended acceleration problems” for several years, even as it continued to promote cars demonstrating the issue as reliable and safe. Examples of the documentation include a 2002 technical service bulletin cited in one of the Florida lawsuits. The bulletin, written for the 2007 Toyota Camry, provides the solution for recalibrating the Enginge Control Model. This bulletin would seem to be in contradiction of Toyota’s insistence that electronics have nothing to do with the acceleration issue, and is related only to the gas pedal being trapped by improperly fitting floor mats, or sticky pedals.

Only the pedal issues were ever singled out for correction in recalls of more than eight million Toyota vehicles, to date, the largest such recall ever taken by the company.

The lawsuits assert that because Toyota allegedly concealed vehicle defects while advertising them as safe, the automaker has engaged in criminal fraud, which qualifies as “racketeering activity.”

According to Howard, as of Tuesday his group of law firms had updated existing consumer lawsuits in eight states, with amended filings in twelve more states planned by the end of the week. Those cases will be consolidated into a single class action lawsuit with other cases from around the country, sometime in the next couple of months, after a hearing in the U.S. District Court in San Diego, set for Thursday, March 25th.

Lawsuits against Toyota have become increasingly numerous in the weeks since the recalls began for a problem linked to more than 50 crash deaths in Lexus and Toyota vehicles under investigation over the last ten years. The cases related to injuries and deaths are the most obvious cases, but there was also a class-action suit filed last month in Los Angeles on behalf of U.S. shareholders. That suit accused the automaker of misleading investors.

Reuters says, “The consumer class actions are based on the premise that the resale value of Toyotas has dropped substantially as a result of the company’s safety crisis.”

Toyota has always had one of the industry’s highest resale values for its vehicles, but according to Howard, the major automobile valuation services have downgraded that value because of these acceleration issues.