Obamacare Not The Only Flawed Insurance: Does Your Auto Insurance Believe It Is Above The Law?

WEST ORANGE, N.J. - Nov. 19, 2013 - PRLog -- Welcome to the esoteric world of Auto Insurance policy ponzi schemes!  Did you know that your auto insurance doesn't care if you are a safe driver?  Did you know that they can arbitrarily raise your rates however and whenever they want?

I recently made this disappointing discovery when it was time to renew my auto insurance coverage.  Turns out many of these auto insurance companies have such a monopoly on the lobby game in Washington, DC that they can ignore government agencies and make their own rules to hike up your rates.

Here's how it works:

Maybe one day you are in a hurry to get to work on time and you happen to exceed the speed limit by 5 miles per hour.  Maybe you cross into a 25 mile per hour zone from a 35 mile per hour zone.  A police officer decides to stop you and issue you a summons.  The summons may add two to three points on your driving record.  However, you say, "this is silly" let me go to court and talk to the prosecutor and maybe I can have this violation reduced to a lesser charge.  You make your court date, talk to the prosecutor, everything goes well.  You leave the court thinking, "I had to pay a hefty fine but it was worth it because I was not assessed points on my driving records with the DMV".  That's great, except your insurance provider has different plans.

The insurance company will evaluate your record with the DMV.  (Actually, insurance companies pay the municipalities to release violation records instantly because they want to be ready to raise your rates for the next billing cycle.)  Thus, as your renewal date approaches your insurance company will send you a renewal estimate that will be greater than what you paid last cycle.  You call your insurance provider and they say, "we looked up your record with DMV and you have two or three points" trying to describe you as "hell on wheels", but you say "that's incorrect, I have no points".  Your insurance provider will not believe you of course, because remember you are "hell on wheels" and you are unreliable, you cannot be trusted.  Therefore, the insurance provider will insist on seeing a driver history abstract.  You know that you are not "hell on wheels" because a judge in a court of law, a prosecutor and the DMV all know that you have no points and you are a responsible driver.  Therefore, you invest your $15.00 and ask for an abstract from your State Driver Motor Vehicle Commission (i.e., DMV).  The abstract shows you have no points, you send it to your insurance provider and they say, "wow, you are right, you are not hell on wheels, we owe you an apology, we will reverse our rate increase and charge you what we charged you last billing cycle. Thank you for the clarification."

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Now you think, well I'm done, my insurance company knows I am not "hell on wheels" they will surely not increase my rate for next billing cycle.  You wait six months and lowe and behold, you receive your next billing cycle estimate.  Your premium has been raised yet again, perhaps even more than the last cycle.  You call the insurance provider and they explain, "you have violations on your driving record and we are allowed to increase your rate", you explain in your calmest demeanor, "this is incorrect, I just asked for an abstract from the DMV a few months ago and you know this is incorrect, it is in your records" and that's when they hit you full force with their bag of bull crap!

Insurance companies will tell you that though you may not have points accumulated with the DMV they consider your violations or as they like to call them ("convictions"), because that just sounds more serious and criminal, you have accumulated points with their insurance point system.  What?  Insurance point system?  You ask the representative on the phone, "is this a joke?"  Believe it or not, your insurance agent will tell you, "we have an internal point system that our underwriters follow to rate your insurance and increase it to a new balance."  You can't believe your ears, after all you indeed (1) do not have points on your driving record with DMV, but insurance companies ignore that and make their own point system, effectively making the DMV a meaningless entity that happens to be run by the State government.  Also, (2) by Statute your violation does not accrue points with the DMV, do you think your insurance company cares?  Of course not, they have their internal point system that indicates that your violation deserves points that somehow, subjectively I might add, determine that you are a risk on the road and you need to pay up buddy, because if there is one way to make the roads in this country safer its to pay higher premiums.

Well that's it in a nutshell.  Your auto insurance company gets to ignore any and all government agencies that indicate you are a safe driver and they get to assess you for any violations that support their business interests.  Forget about what courts say, forget what the prosecutor says in court, forget winning your argument in court that clears you of the violation, oh and most importantly forget about shopping for new insurance.  The new auto insurance company rates will not only be higher because their systems show your old records (remember you haven't corrected their records with an abstract yet) not that it matter much.  Auto insurance companies have figured out a way around that too.  Their underwriters cannot consider your 5 years certified abstract with the DMV until you actually buy and bind the insurance!  Isn't that wonderful?  The only way you get your money back is by correcting the auto insurance company underwriting team only after you pay for what you know you do not owe.  Now you know.

If you would like to join me in a group petition to protest this corrupt, unethical and ponzi scheme-like behavior by your auto insurance company, let me assist you in reporting them to the New Jersey Department of Banking and Insurance at Consumer Inquiry and Response Center ("CIRC") P.O. Box 471 - Trenton, New Jersey 08625-0471 Phone:  (609) 292-7272 Fax: (609) 454-8468.  We can make a change if we all get together and show these auto insurance companies we mean business.