Oklahoma
Residents Only
Why
Is Your Auto Insurance Cost So HIGH?
Fraud......Its
a Full Time Job!
Honest, careful drivers
pay an estimated $200 per year more in auto insurance premiums to cover the
cost of fraud.
In Chicago, three generations of the same family
pled guilty to staging dozens of car accidents, faking injuries, and filing
bogus insurance claims. They deliberately drove their cars into poles
and faked facial injuries on the scene with syringes of blood. Before
they were caught and charged, they defrauded insurance companies of more than
$750,000.
In Connecticut a plumber and his wife (a school
psychologist) had a five-year-old son and a fine suburban home. They
also had multiple insurance policies they used to defraud 19 companies in the
largest insurance fraud scheme in the state's history.
In Texas, one organized auto fraud ring met at local
restaurants and paid people $50 to $100 each to crash cars into each other at
remote locations. From there, the damaged vehicles were moved to more
public spots on the side of the road and positioned as though accidents had
occurred. The police were called, accident reports were filed followed
by legal and medical claims from hundreds of people suffering similar injuries
and symptoms.
These crooks don't use guns, their weapons are lies and
deceptions. They claim they aren't hurting anyone but the insurance
companies. That couldn't be further from the truth. The insurance
industry loses over $20 billion dollars every year to fraudulent claims.
Theft
The
Value of cars stolen each year now totals $7.6 billion!
In Snohomish County Washington, just north of Seattle, a
Jeep Grand Cherokee is stolen from the driveway of a private residence. The
Grand Cherokee is driven directly to the waterfront, up a ramp and inside a
waiting shipping container where it's quickly surrounded with food. The
container is sealed and marked 'Food and Relief Supplies." Its
destination is one of the former Iron Curtain countries.
Just as the container is to be loaded on a freighter; an
alert customs agent discovers the cargo inside.
The owners of the vehicle are immediately contacted by
their insurance company who was contacted after an alert officer ran the
stolen car's license plate numbers. They didn't even know it was missing.
When stolen vehicles aren't shipped overseas, they're
driven to chop shops, disassembled and sold by the piece to disreputable auto
repair and body shops. In the past, vehicles were stolen for joy rides
and were damaged, smashed and partially stripped. Now they're taken
apart professionally, rebuilt and resold.
The VIN
Switch (Vehicle Identification Numbers)
Many legitimate professionals regularly purchase repairable
wrecked vehicles from insurance salvage pools to be restored and sold. VIN-switch
criminals operate from auto repair garages and body shops that look legal.
However; wrecked vehicles are not repaired there. Instead, a similar make and
model vehicle is stolen and the VIN plate is switched from the salvaged to the
stolen vehicle. The dishonest operator alleges the wrecked vehicle has been
repaired and is available for sale.
Amazing but True!
Most skilled chop shop operators can surgically strip a car in
less than 30 minutes. They can make two to four times a vehicle's actual worth
by selling the parts separately. Theft accounts for approximately 25% of all
insurance claims that don't include collision.
Litigation
Our society is
lawsuit happy.
In San Francisco, a taxi driver chasing a mugger with his cab
eventually pinned the mugger against a wall with his bumper. The mugger sued
the cab driver because his leg had been fractured. He was awarded $24,595.
Even though the award was later overturned, the cab company spent $68,000
defending the case. Experts report that bodily injury is claimed in one
out of three auto accidents. In Los Angeles County 99 out of every 100
accidents lead to bodily injury claims.
Our society
has become more litigious or "lawsuit happy" than ever before.
While many of these lawsuits are legitimate; many more are based on
exaggerated claims and inflated costs which feed a legal system feeding itself
on the tragic consequences of accidents. Many people believe insurance
companies have "deep pockets" - bottomless pits of money to draw
from. That couldn't be further from the truth. Auto accidents and the
litigation stemming from them are paid by each and every one of us in higher
auto insurance costs.
The impact of
lawsuits on bodily injury claims is enormous.
Today more bodily injury claim dollars are spent on legal costs
than on medical care. And until the trend of using the courts instead of the
claims process to settle injury disputes is reversed, bodily injury claim
costs will continue to increase... which in turn, increases insurance costs.
· According to one study,
while $26 of $100 goes for medical expenses in bodily injury claims, another
$26 goes to plaintiff and defense lawyers.
· Still another $29 goes to
pay jury awarded "pain and suffering" verdicts.
The United States leads the
world in the costs of litigation. Lawsuits consume 2.2% of our gross domestic
product
The U.S. tort system
cost $132 billion in 1992, including insured and self-insured costs. Between
1933 and 1991, U.S. tort costs rose by a factor of almost 400. By contrast,
U.S. economic output (GNP) grew only one hundred fold over the same period.
Thus, tort costs have grown almost four times faster than the U.S. economy
over the past 58 years. 1992. - The Health
Care Liability Alliance (HCLA)
There are
more lawyers in West Los Angeles than in all of Japan.
Speed and
Road Rage
Slow down!
Higher speeds mean more traffic
accidents
It sounds simple enough. If accident rates decline, lower
insurance rates will follow. So how do we reduce accidents and lower our auto
insurance premiums? One way is to reduce our speeds. The faster a vehicle is
traveling, the more violent the collision. The more violent the collision, the
greater the physical damage and bodily injuries can be. When federal speed
limits were lifted in 96 each state became responsible for setting its own
limits. Many states have increased their limits. Some people believe increased
speed limits reflect more closely the actual speeds people are already
driving. Many believe legal speed limits do little to change the speeds at
which people actually travel. And many people believe increased speed limits
increase injuries and deaths. Some studies already prove it. A recent study
from the Insurance Institute for Highway Safety shows, in the 12 states that
raised their speed limits in 1996, there were 500 more deaths from auto
accidents during the last nine months of 1996, compared with the same period
in 1995. The overall increase in highway fatalities for the twelve
states during that period is ported to be approximately 12%. And the same
study concludes fatalities will continue to rise in the 27 other states that
have decided to increase speed limits.
How to avoid becoming a
Road Rage Victim.
1.
Avoid eye contact or any verbal exchange.
2. Don't react to provoking gestures or insulting words.
3. Entertain the idea that an aggressive act was
unintentional.
4. Get away from an aggressive driver, drop back in
traffic,
change lanes.
5. If you decide to leave the highway head to a public
place
like a restaurant.
6. Call for help.
Cost of
Auto Parts
The increase in cost of
auto parts increases your insurance costs.
If you bought all the parts to make a car, the cost would be more than twice
as much as you would pay for the assembled automobile off the dealer's lot.
As cars have become much more complex machines, there are more parts to be
damaged, more parts to need fixing, more complex parts and more complicated
repair procedures and equipment needed.
The collision repair industry has experienced an annual increase in costs
since 1984 of about 6% each year. And in the last three years, the increasing
complexity of repair jobs is reflected in the growing number of labor hours
and parts per estimate. We all pay for the increased cost of auto parts
with increased insurance premiums. Controlling collision repair costs is
not an easy task. Insurance companies and repair facilities are focusing
more energy on training, to ensure the best and most effective repairs are
taking place. Using "after-market" parts also reduces costs.
So can better "repair versus replace" decisions.
As
vehicle complexity increases, so does the amount of service information
required to maintain and repair them. In 1967, repair manuals for all vehicles
on the road were estimated at a total count of 5,000 pages. By 1991 the total
count was a million pages.
Driving
under the influence
Every 32 minutes, someone
dies in an alcohol-related crash.
Most of us don't think about drunk driving until it slams into
our lives. One drunk driver can destroy lives, families and generations
in a fraction of a second. People who drive under the influence of
alcohol or drugs significantly drive up insurance rates because of the toll
they take on our cars, our bodies and our lives. For example: The
Western Insurance Information Service (WIS) offers this fairly typical
scenario- You and a passenger drive home from a party where you had a few
drinks. You wander over the center line and collide head-on with a car
carrying a family of three. You receive a disabling injury, your passenger is
killed, and the family of three has serious injuries but survives. Based on
National Safety Council estimates of average accident costs, you have caused a
total of $2,700,000 in losses.
Drunk drivers on the increase?
Among adults aged 24-34 and among all women, the number of drivers with a
blood-alcohol content of at least 0.1% increased slightly between 1986 and
1996. The rise followed a steep decrease for both groups between 1973 and
1976.
For every age between 5 and 27,
traffic crashes are the leading cause of death - and almost half those crashes
are alcohol related.
Medical Cost
Today medical
services and capabilities are greater than ever before in history. When
we're injured in a car accident, we have a better chance of surviving
injuries, mending bodies, restoring health. We've also paid the price
for those advances because they can be very costly. When someone is
injured in an accident, insurance coverage can be crucial to help pay for
hospital care, surgery and rehabilitation.
Today, married couples with children pay 5.5% above
inflation and single parent families will pay as much as 10% above inflation
for their health care costs.
According to Best's Insurance Management Reports, over an 8-year
period, while the cost of living rose 36.4%, the cost of physician
services rose 76.8% and hospital room rates climbed 102.4%. And the
Congressional Budget Office reports that the next decade is likely to see as
large an increase in health spending as in the last 25 years. In 1960,
the United States spent $60 billion on health care, in 1980, $230 billion, and
in 1990, $606 billion was spent on health care. By the year 2000, experts
predict the amount will triple.
In 1991, corporate health care
costs were 45% of net profit We spend twice as much per person as Germany for
health costs, and 2.3 times as much per person as Japan.
More
Cars and Trucks
More cars and trucks
Over the years, more and more cars are claiming space on
our nation's roads. Highway traffic is up 35% since 1987, yet new road
construction has increased by only 1%. In addition, the overall funding
for traffic control has increased considerably since 1987. What this
means is there are more cars on our roads than ever before. And law
enforcement resources have not increased enough to manage those extra cars.
More drivers mean more collisions and higher costs
The National Highway Traffic Safety Administration
estimates excessive sleepiness contributes to over 200,000 traffic accidents a
year.According to Helmut Schmidt of Ohio Sleep Medicine Institute, drowsiness
causes more accidents than drunk driving. Because there's no blood test
for fatigue, its difficult to get precise figures as to the degree that sleep
deprivation contributes to accidents- however, various studies have concluded
that alcohol and lack of sleep are contributing factors in 40-50% of all fatal
accidents.
More teenage drivers mean more collisions
The teen population is expected to increase 25% in the next
ten years- and traffic crashes are the number one cause of death among
teenagers. Teen collisions outnumber adults at a rate of four to one.
65% of teenage passenger deaths occur when another teenager is driving. And
41% of teenage fatal crashes take place between 9 p.m. and 6 a.m. That's
why many states and organizations are focusing on teen drivers. Among the AAA
(American Automobile Association) recommendations for teen drivers:
- Raise the minimum age of a
learner's permit to 16
- Require a 6-month basic
driving course
- Provide an intermediate
license until a full license is issued at the minimum age of 18
- Limit the number of
teenagers a new driver can transport in one vehicle.
The Insurance Information
Institute estimates 31.8 million motor vehicle accidents in 1992, with a total
cost of $98.1 billion.
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