Good news and bad news. First, the bad news; the high gas prices have hurt our bank accounts and forced all of to rethink how much we drive.

The good news is that the less we drive, the less risk we are to an insurance company and insurance companies offer discount to those who drive less.

Today I have posted an article by M.P. McQueen about the discounts offered by insurance companies, including the one I represent.

For more questions about how this is effecting us in Ferndale, Royal Oak, Pleasant Ridge, Hazel Park, Berkley and the surrounding areas please contact me through this blog site. Thank you.  Marty O’Neill, Insurance Agent

By M.P. McQueen

Car owners who are changing their driving habits because of soaring gas prices may be able to save a few dollars on auto insurance.

Major car insurers including State Farm Mutual Insurance Cos., Travelers Cos. and Farmers Insurance Group say that drivers who log less than about 7,500 miles a year may be eligible for “low mileage” programs that reduce premiums an average of about 10% to 12%. State Farm’s program earns drivers discounts ranging from 12% to 18%, says spokesman Dick Luedke.

Car owners who drive more than that but less than they used to — perhaps because they have started using public transportation or walking to work — may also save on premiums, according to a study by the Consumer Federation of America. The group released a study Tuesday showing consumers could save 5% to 15%, amounting to $47 to $142 a year based on 2005 rates, when the average U.S. premium was $949, by cutting their mileage enough to drop into a different ratings category, say, from “drive to work” to “pleasure driving,” says J. Robert Hunter, insurance director for the Consumer Federation of America.

“Most insurance companies have a scale, and you pay more based on how much you drive. Each time you drive more, they charge you more,” Mr. Hunter says. Depending on ratings factors allowed by state regulators, the savings can be even greater, he says.

In California, for example, companies charge motorists based mainly on their driving history and miles driven, so driving more or fewer miles significantly affects the premium drivers there pay. Consumers should inform their agents of any big changes in their driving habits, says Mr. Hunter.

A few insurers in some states also give discounts to drivers who enroll in programs that use an installed monitoring device to track driving habits. The insurers charge drivers according to when, how, and how many miles they drive, so that those who log fewer miles pay less.

Progressive Group of Insurance Cos. pioneered its “MyRate” program, formerly known as “TripSense,” in Minnesota, Oregon and Michigan several years ago, and anticipates rolling it out in six more states in the next few months, pending regulatory approval. In those states, drivers get a 25% discount off regular rates for participating. The discount is expected to be even larger in the expanded program, says Richard Hutchinson, usage-based insurance general manager. Progressive also offers a low-mileage discount in four states. Since July 2007, GMAC Insurance from General Motors Corp. has offered eligible On-Star subscribers who drive less than 15,000 miles savings of up to 54% on their premiums, including an automatic 11% discount. The program is available in 34 states.

Several insurers, including Travelers and Farmers Insurance Group, a unit of Zurich Financial Services, also have rolled out discounts for drivers who switch to hybrid and other gas-saving vehicles. Since 2005, Travelers recently started offering a 10% discount on most coverages for owners of hybrid or other gas-saving cars in 44 states. The company says that hybrid-car owners are generally good risks. Farmers also offers an average 5% discount nationally on all major coverages including liability and property damage, says spokesman Jerry Davies.

As frequent readers know, I am very dedicated to promoting auto safety and keeping auto insurance rates low. Today I have posted an article from the National Institute for Highway Safety. It is about teen drivers and their phones. I hope you find it helpful–Marty O’Neill, Insurance Agent.

Arlington, VA — Teenage drivers’ cellphone use edged higher in North Carolina after the state enacted a cellphone ban for young drivers, a new Institute study finds. This is the case even though young drivers and their parents said they strongly support the restrictions. Parents and teens alike believe the ban on hand-held and hands-free phone use isn’t being enforced. Researchers concluded that North Carolina’s law isn’t reducing teen drivers’ cellphone use.

The two-part study coupled researchers’ observations of teenage drivers with telephone surveys of teens and their parents in the first evaluation of a cellphone law for young drivers. North Carolina’s ban for drivers younger than age 18 is part of the state’s graduated licensing system.

Just 1-2 months prior to the ban’s Dec. 1, 2006, start, 11 percent of teen drivers were observed using cellphones as theyleft school in the afternoon. About 5 months after the ban took effect, almost 12 percent of teen drivers were observed using phones. Most drivers were using hand-helds. Nine percent were holding phones to their ears, while fewer than 1 percent were using hands-free devices. About 2 percent were observed dialing or texting. Cellphone use remained steady at about 13 percent at comparison sites in South Carolina, where teen driver cellphone use isn’t restricted.

“Most young drivers comply with graduated licensing restrictions such as limits on nighttime driving and passengers, even when enforcement is low,” says Anne McCartt, Institute senior vice president for research and an author of the study. “The hope in North Carolina was that the same would hold true for cellphone use, but this wasn’t the case. Teen drivers’ cellphone use actually increased a little. Parents play a big role in compliance with graduated licensing rules. Limiting phone use may be tougher for them since many want their teens to carry phones.”

Parents and teens support cellphone ban: When surveyed after the cellphone restrictions took effect, teenage drivers were more likely than parents to say they knew about the ban. Only 39 percent of parents said they were aware of the cellphone law, compared with 64 percent of teen drivers. Support for the ban was greater among parents (95 percent) than teens (74 percent). Eighty-eight percent of parents said that they restrict their teenage drivers’ cellphone use, though only 66 percent of teenagers reported such parental limits. About half of the teenagers surveyed after the law took effect admitted they had used their phones, if they had driven, on the day prior to the interview.

Restrictions are rarely enforced: Most parents and teen drivers agreed that police officers weren’t looking for cellphone violators. Seventy-one percent of teens and 60 percent of parents reported that enforcement was rare or nonexistent. Only 22 percent of teenagers and 13 percent of parents surveyed believed the law was being enforced fairly often or a lot.

“Cellphone bans for teen drivers are difficult to enforce,” McCartt notes. “Drivers with phones to their ears aren’t hard to spot, but it’s nearly impossible for police officers to see hands-free devices or correctly guess how old drivers are.” Absent some better way to enforce them, “cellphone bans for teenage drivers aren’t effective, based on what we saw in North Carolina,” McCartt adds.

In both North Carolina and South Carolina, observed cellphone use was significantly higher among girls than among boys and higher when teens drove alone in vehicles rather than with friends. For example, 13 percent of female drivers and 9 percent of males were observed using cellphones in North Carolina before the law. Cellphone use was 14 percent among solo drivers and 8 percent among teens with 1 passenger. More SUV drivers than car drivers were viewed using phones.

Phone bans for young drivers are becoming commonplace as concerns mount about the contribution of distractions to teens’ elevated crash risk. Seventeen states and the District of Columbia restrict both hand-held and hands-free phone use by young drivers. Six states and DC bar all drivers from using hand-helds. For a state-by-state list of cellphone laws, visit www.iihs.org.

As many of my readers know, in addition to providing auto insurance, homeowner’s insurance and life insurance for the people in and around Ferndale, I also specialize in retirement planning and advocate saving for your future.

Today I have posted a column from The Detroit Free Press and columnist Susan Tompor. She writes about concerns related to CDs and potential pitfalls that might occur during investing in CDs–Marty O’Neill, Insurance Agent, Ferndale Michigan

 
BY SUSAN TOMPOR • FREE PRESS COLUMNIST • May 31, 2008

 
Putting money into an FDIC-insured certificate of deposit called a brokered CD could seem like a no-brainer. It’s insured after all, right?

But some savers found unsettling hurdles with so-called brokered CDs issued through one distressed Arkansas bank that brought in money from savers nationwide.

Federal regulators on May 9 closed ANB Financial National Association in Bentonville, Ark. It was the third closure this year of an FDIC-insured bank.

But more than two weeks later, many savers with the brokered CDs still do not have access to their money.

It is an unusual situation, but one worth talking about as savers push the limits to find more attractive interest rates and some banks run into financial troubles.

$1.6 billion left out of deal

ANB Financial, which had about $2.1 billion in assets, was the largest bank to be closed this year. Regulators blamed lax lending standards for construction and development loans.

Pulaski Bank and Trust Co. in Little Rock, Ark., assumed control of the bank’s locations. Insured deposit accounts were transferred to Pulaski Bank and were available immediately.

But ANB Financial had a high amount of brokered deposits — roughly $1.6 billion — that weren’t part of that deal.

Those deposits were held by investors all over the country, including Michigan.

The FDIC has the task of paying the brokers directly for the amount of their insured funds.

What savers must realize is that brokered CDs are not the same as an ordinary CD opened directly through a local or out-of-state bank.

Consumers can go to www.fdic.gov/deposit in order to see how insurance works and whether the Federal Deposit Insurance Corp. insures your money at a given institution.

Savings accounts, checking accounts and CDs are insured by the FDIC up to the legal limit of $100,000 and sometimes more for special kinds of accounts or ownership categories. For example, each person’s deposits in self-directed retirement accounts at the same insured bank are added together and insured up to $250,000. Naming beneficiaries to a self-directed retirement account does not increase insurance coverage.

Read disclosures carefully

Brokerage firms offer CDs, too. The deposit brokers can sometimes negotiate a higher rate of interest for a CD by promising to bring a certain amount of deposits to the institution.

These brokered CDs are then offered to customers.

If you put money into a brokered CD, read all the disclosures. You need to know which bank or thrift insures your CD.

The Securities and Exchange Commission has warned that consumers risk not being fully insured if their total deposits at the bank or thrift, including all brokered CDs at that bank, are above the insured limit.

You need to know up front if your broker plans to put your money into a bank or thrift where you already have other CDs or other deposits.

If the bank fails, typically, the healthy bank that assumes control of the troubled bank’s assets won’t agree to acquire the brokered CDs. It’s essential to understand if all your money in brokered CDs falls within the FDIC insurance limits.

David Barr, an FDIC spokesman, said most of the deposits at ANB Financial were brokered CDs, which is unusual.

As of Tuesday, the FDIC had released about $550.7 million out of $1.6 billion in brokered deposits at ANB. That’s roughly 35% of the deposits.

The situation is made more complex because about 180 brokers had funds on deposit at ANB. Paperwork is required to make sure that customers are only covered according to the limits.

The FDIC needs to cross-reference who has brokered CDs at that bank and how much they have in total through various brokers.

Adam Banker, a spokesman for Fidelity Investments, said Fidelity has provided the FDIC with information about many customers who had brokered CDs through ANB Financial. Fidelity is completing the paperwork for customers, but some customers may need to take more action.

But he said customers who have more than $100,000 in those CDs will need to submit more paperwork for the FDIC and return that paperwork to Fidelity so it can be submitted to the FDIC. Customers can get more information at www.fdic.gov.

No one could tell me how long the process could take for some consumers. It is unknown how long savers would have to wait to get the remaining money.