Question for people with knowledge of car insurance

[Monoxide]

Posting here because google has failed me. Here's the quick of it:

My Mother is 52, she is medically disabled and receiving social security disability each month. (She had a heart attack back in 2011, at which point it was discovered she had kidney failure issues and other medical problems, leading to her retirement).

She's currently going through a divorce, and due to that she had to trade in her car for a less expensive one. For whatever reason, when she dropped her husband from her claim, her insurance went up. She's currently paying $185/month for her car payment, but the issue is she's paying $240/month for her car insurance.

Here is my question for anyone who has real knowledge of this:

One of the things on her policy is that she has to pay for loss of income. Here's the thing though, if she's in a car accident, she still receives her disability check every month. At no point in time will her insurance company *ever* pay out for loss of income, because she can't lose her income. So why does she have to pay for this part of the policy? When she spoke with the insurance company this morning they said it was part of the state law (We live in Michigan).

I don't know, it just doesn't sound right to me. She's being forced to pay for something that is not unlikely, but impossible. Why is that? Can anyone shed some light on it? Thank you.

[Tradewind]

That sounds fucky, I'd start shopping around. Insurer's are more likely to negotiate if they're about to lose business. Get some new quotes.

$240 a month is more than I pay at 32 :\

[Monoxide]

Yeah it's insane, she looked at a policy from AAA, and it was would've been $400/month for a 1 year policy. All-State also wants close to $400/month, but that's on a 6 month policy.

I don't know what to tell her. She's considering turning her car back in and just once a month renting a car for a week from Enterprise. She could do all her doctor appointments/shopping during that week.

It's fucked up, I feel so bad for her that she has to even consider doing this. sigh

[glo]

With the rates you're quoting, she either has horrible credit, a horrible driving record with numerous accidents caused by her or both. I'm leaning towards the bad credit rating since it only went up after the husband was no longer on the policy.

[Monoxide]

She has a good driving record, but her credit score is around 620. Her husband had 0 credit when he left, so that shouldn't have affected it, should it?

[TZucchini]

I'm an insurance broker IRL. I can probably shed some light on this situation.

Michigan is a "no fault" state, meaning that both parties involved in an auto accident are entitled to valuable economic benefits from their insurance companies, no matter who caused the crash. No fault coverage is indeed mandatory. The insurance company was telling the truth.

However, that doesn't explain the increase. No fault coverage was carried before she switched cars, and there are many other benefits she could take advantage of outside of her lost wages.

The best thing to do is to call other insurance companies for quotes. Geico, Progressive, State Farm, etc.

On a side note, has she been in several accidents? Any moving violations? DUI's? Is she actually able to drive, being that she's medically disabled? These could all factor into the price.

[theostrichsays]

Well nevermind Pre-911 answered with a much more insight then I could provide.

[the game]

Who does she currently have insurance through?

[gaymer77]

Well one reason for the increase in premium is that she's no longer married. Insurance companies give lower rates to married couples. As far as the "loss of income" statute, that may very well be correct because different states have different riders on policies that are required. As others have said, I would strongly suggest getting more quotes. You might want to go with a lesser known insurance company for a better rate. Or try Esurance or Progressive. I know State Farm, AAA, and All-State tend to be on the higher side for premiums.

[Reeve]

Posting here because google has failed me. Here's the quick of it:

My Mother is 52, she is medically disabled and receiving social security disability each month. (She had a heart attack back in 2011, at which point it was discovered she had kidney failure issues and other medical problems, leading to her retirement).

She's currently going through a divorce, and due to that she had to trade in her car for a less expensive one. For whatever reason, when she dropped her husband from her claim, her insurance went up. She's currently paying $185/month for her car payment, but the issue is she's paying $240/month for her car insurance.

Here is my question for anyone who has real knowledge of this:

One of the things on her policy is that she has to pay for loss of income. Here's the thing though, if she's in a car accident, she still receives her disability check every month. At no point in time will her insurance company *ever* pay out for loss of income, because she can't lose her income. So why does she have to pay for this part of the policy? When she spoke with the insurance company this morning they said it was part of the state law (We live in Michigan).

I don't know, it just doesn't sound right to me. She's being forced to pay for something that is not unlikely, but impossible. Why is that? Can anyone shed some light on it? Thank you.

I'd suggest she take a look at the law to see if there are exceptions for people who are unemployed. If not, she has to pay it. You may be able to help her get a multicar/multiline discount if you can add her policy to your own, though, which should bring down the cost somewhat. $240 seems very high for a 51 year old. I'm 31, for example, with a few accidents on my record, and I believe I pay around $150/month. Possibly she's got far more coverage than she needs. Is the $240/month for comprehensive? Maybe she could drop to liability only?

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That sounds fucky, I'd start shopping around. Insurer's are more likely to negotiate if they're about to lose business. Get some new quotes.

$240 a month is more than I pay at 32 :\

I haven't had much luck with insurers being willing to negotiate. I told them I was going to look elsewhere after being a 13 year customer, and my company just said, "OK, seeya."

[Cerus]

Myself 34 and my wife 35 with a child pay about $180 a month through State Farm for full coverage on two newer vehicles. No accidents etc.

I definitely suggest shopping around.

[Tradewind]

I haven't had much luck with insurers being willing to negotiate. I told them I was going to look elsewhere after being a 13 year customer, and my company just said, "OK, seeya."

I'd only really suggest it in this case because she is clearly being shafted. There's gotta be a better deal somewhere.

[Reeve]

I'd only really suggest it in this case because she is clearly being shafted. There's gotta be a better deal somewhere.

I was clearly being shafted too. When I switched coverage, I went from $230/month to $150 immediately, for the same coverage. The $230/month place was unwilling to negotiate.

[lockedout]

One of the things on her policy is that she has to pay for loss of income. Here's the thing though, if she's in a car accident, she still receives her disability check every month. At no point in time will her insurance company *ever* pay out for loss of income, because she can't lose her income. So why does she have to pay for this part of the policy?

Every state is different. I think you're paying for loss of income for the other person/people in the car accident not for herself. It's possible she was never listed as a driver on her husbands policy. Some posters mentioned credit rating, it is a small factor in the price and wouldn't cause such a dramatic rise in price.

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Myself 34 and my wife 35 with a child pay about $180 a month through State Farm for full coverage on two newer vehicles. No accidents etc.

I definitely suggest shopping around.

Each state is different, come to Jersey and be astonished at your insurance prices.

One thing to take note of, people on disability/SSI are able to get some type of insurance through them. For instance here in NJ they have a program where drivers pay 1 dollar a day.

I never had insurance in my name so when I had to put both cars in my name registered and insured they wanted 560 a month...this is from Geico state farm progressive etc. I found a company that only does insurance in NJ and PA called The cure, it's possible your state has a similar type of insurance company. This company doesn't take level of school completed or use a credit report when determining your rates they also forgive 2 insurance points off the bat.

[TZucchini]

Every state is different. I think you're paying for loss of income for the other person/people in the car accident not for herself.

The loss of income is indeed for herself. It's "Personal Injury Protection," also known as "no-fault" coverage. It's mandatory in several states, including your own.

[Monoxide]

Just to answer some things brought up in the replies:

The last accident she was in was...25 years ago? Maybe longer?

She has had a couple traffic violations, but they've always been things like "I forgot it was garbage day and I parked in the street". From memory, she's had a few parking tickets, but again those were years ago. She has not gotten any tickets that would put points on her record in 10+ years.

She has never had a DUI.

As to the question if she's actually able to drive, yes she is. She just went for a license renewal, as her birthday was about a week ago. She had no problem passing the eye exams and everything else, so she's perfectly fit to drive.

As far as her husband is concerned, it was not a case of her not being listed on his policy. Prior to them meeting/getting married, she had her own car, her own policy, etc. HE was added to her policy over the course of their marriage.

Let me just break down how this happened, maybe it'll help with this. Her soon to be ex-husband is a huge piece of shit. Basically he decided he was going to leave her two years ago, but said nothing. He had no credit, so when she got her disability back-pay, he convinced her to buy a new car rather than just get whatever fixes they needed for her old car. His reason for doing this became clear though. With the new car, his name was on it (it wasn't on the old car). This allowed him to build up his credit score, because he had literally no credit prior to this. After exactly 1 year of making payments on the new car (2012 Chevy Cruise), he told her he was leaving her. This 1 year of making on time payments for a new car gave him a great credit score, as compared to no credit. This was his plan (I can't put into words how much of a piece of shit he is, but that's not for this discussion).

Due to the fact that he abruptly left her (Like, he went from not expressing any discontent to "I'm leaving" in a matter of 1 week), she was unable to afford the 2012 Chevy Cruise along with her other expenses due to the loss of his income (he is on disability too, and was the entire time they were together due to an injury the he suffered over a decade ago).

Because of that she traded in the 2012 Chevy Cruise, which at the time her car payment for that was $190 and her insurance was $180, which she traded in for a 2008 Chevy Cobalt, which as I stated is now a monthly payment of $185 for the car and $240 for the car insurance.

With both cars she had All-State (her current insurance provider).

So how does this happen? Why has it gone up? Hopefully someone can shed some more light on it now that I've provided extra information.

[lockedout]

The loss of income is indeed for herself. It's "Personal Injury Protection," also known as "no-fault" coverage. It's mandatory in several states, including your own.

AHH yes PIP, the way he worded it threw me off. Having sued for 3 accidents I was in, I was aware of PIP.

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Because of that she traded in the 2012 Chevy Cruise, which at the time her car payment for that was $190 and her insurance was $180, which she traded in for a 2008 Chevy Cobalt, which as I stated is now a monthly payment of $185 for the car and $240 for the car insurance.

With both cars she had All-State (her current insurance provider).

So how does this happen? Why has it gone up? Hopefully someone can shed some more light on it now that I've provided extra information.

She traded in her car to save 5 bucks a month? I am under the impression that there are either things you don't know regarding this or things she is not telling you.

[Monoxide]

She couldn't get the Cruise put in just her name because they wouldn't finance her without her soon to be ex-husband's income on it as well. She had no choice but to trade it in. I'll ask her more about this and reply when I have more information.

[Captain N]

Give up All State and don't go anywhere near State Farm. I carried State Farm for 20 years - Had 1 accident in that time frame and I was paying $150 a month for Full Coverage Insurance. When I decided to look elsewhere Allstate was charging around the same price. My wife found a program through Metlife and now we pay $150 a month for full coverage on both of our cars combined....My brother has also had amazing luck with Farmers and he's been in several accidents (3 which involved the car being totaled) and he pays something like $90 a month.

[Stop Pretending]

State Farm is a fucking sham, avoid at all costs. They jack up their rates so their brokers can have fancy little offices all over town. I switched from them a few years ago, and my insurance dropped a little over $300 a month, for the same exact coverage.