GM to Cut Health Care, Insurance Coverage

Retirees who were paid salaries will take a hit, as the Detroit-based automaker will cut health care benefits and reduce life-insurance coverage for some who are under 65, according to an internal document obtained by TheStreet.com. GM, which is straining under employee obligations and corporate debt, spent $103 billion to fund so-called legacy pensions and retiree health care costs from 1993 to 2007 alone.

GM, the largest U.S. carmaker, said Feb. 10 it plans to slash 10,000 salaried jobs and lower pay by as much as 10%.

The company will withdraw health care benefits for salaried retirees, surviving spouses and eligible dependents under age 65 who may receive Medicare. The changes take effect Jan. 1, 2010. Starting May 1, 2009, life-insurance coverage provided by GM at two times a worker's salary will be cut to 75% of the salary upon retirement. After 10 years, the rate will be reduced by an additional 25%. Current retirees also will be affected.

GM spokesman Tom Wilkinson said the company would establish a company-funded health reimbursement account, called an HRA. GM will make a $260 tax-free monthly contribution to an HRA for affected retirees or surviving spouses. When a retiree reaches age 65, an additional monthly pension payment of $300, announced last summer, will be paid.

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9 ways to lower your auto insurance costs

1. Ask for higher deductibles

Request higher deductibles on collision and comprehensive (fire and theft) coverage and lower your costs substantially. For example, increasing your deductible from $200 to $500 could reduce your collision and comprehensive cost by 15 percent to 30 percent.

2. Drop collision and/or comprehensive coverages on older cars

It may not be cost effective to have collision or comprehensive coverage on cars worth less than $1,000 because any claim you make would not substantially exceed annual cost and deductible amounts. Auto dealers and banks can tell you your car’s worth.

3. Buy a “low profile” car

Before you buy, check insurance costs because fast and expensive cars that cost more to repair and are a favorite target for thieves have much higher insurance costs.

4. Take advantage of low mileage discounts

Some companies offer discounts to motorists who drive a limited number of miles a year.

5. Consider insurance cost in your neighborhood

Costs tend to be lowest in rural communities and highest in cities where there is more traffic congestion.

6. Discount possibility: automatic seat belt or air bag

You may be able to take advantage of discounts on some coverage if you have automatic seat belts and/or air bags.

7. Discount possibility: anti-lock brakes

Anti-lock brakes improve steering control and stability when a car is brought to a stop, thus reducing accidents. Some states, including Florida, New Jersey and New York, require insurers to give discounts for cars equipped with the brakes and some insurers have a nationwide discount in place.

8. Comparison shop

Prices for the same coverage can vary by hundreds of dollars, so it pays to shop around. Look online, ask friends or call your state insurance department. But don’t shop price alone.

The insurer you select should offer both fair prices and excellent service. Quality personal service may cost a bit more, but provides added conveniences. Ask companies what they would do to lower your costs and check the financial ratings of the companies with an online search engine to make sure they’re financially sound.

Once you’ve narrowed the field to three insurers, get price quotes.

9. Discount possibility: “other” discounts

Some insurers offer discounts for more than one car, no accidents in three years, drivers over 50 years of age, driver training courses, anti-theft devices, and good grades for students.

Source: Insurance Information Network of California

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Co-op joins pay-as-you-go car insurance market

Car insurers are launching a second wave of pay-as-you-drive schemes, offering the chance of cheaper premiums not only to the under-25s but to more mature drivers who rarely travel in the rush hour or late at night.

The motoring technology uses a global positioning system, and includes an anti-theft tracking device, to record the mileage and hours of use of a vehicle, and is more advanced than previous schemes.

Co-operative Insurance has launched a new policy based on the technology, which it claims could reduce insurance costs for young drivers from the equivalent of 5p a mile to 1p. Three other insurers are working on similar schemes.

At least 2 million (5%) UK drivers are thought to be uninsured, according to the Motor Insurers' Bureau, an organisation which compensates victims of uninsured driver-related accidents and pays out more than £500m a year from funds levied from the industry.

The Co-op says the average cost of cover for young drivers rose by nearly four times the rate of inflation last year, with premiums soaring to levels that could lead to an "uninsurable generation".

Its analysis of industry figures suggests under-25s typically pay £1,463 a year, with young drivers last year suffering premium rises of 11.5% compared with an inflation rate of 3.1%.

"With this continuing trend, which directly reflects the increased risk posed by young drivers, a whole generation could become uninsurable, adding to the already growing problem in the UK," said David Neave, director of general insurance at the Co-op.

"As long as young drivers are properly educated about the risks of the road and drive responsibly, there is no reason why they should be priced out of the market. Knowledge is a powerful tool to cut the number of young driver deaths on the road, which currently runs at a shocking 13 a week."

The Co-op is working with Coverbox, a web-based brokerage company, to develop the technology alongside Allianz Insurance, Equity Red Star and Groupama Insurances.

A black box is placed in a car, usually under the dashboard. Premiums are then calculated on an individual's actual risk depending on whether the car is used in off-peak, peak or "super-peak" times.

Before young drivers can apply for the Co-op scheme they must answer a series of questions on the dangers of speeding, drink-driving, driving while tired, not wearing a seat belt, and vehicle insurance, under a scheme run with road safety charity Brake.

Penny Searles, commercial director of Coverbox, said: "The big problem for insurers is the cost of the hardware which has to be put into vehicles. You can't add them to insurers' premiums, otherwise you would never sell them anything." But a deal with manufacturers in Italy meant Coverbox would pay for the equipment, which would normally set drivers back at least £300. Its partner companies are expected to meet installation costs or include them in their premiums. The Co-op claims comprehensive cover can cost as little as 1p a mile.

Changing driver habits

The scheme had been trialled on around 50 customers over six months, and drivers have already said they are changing their driving habits by making fewer journeys as a result of the information they gleaned.

Standard insurance quotes are based on a driver's age, marital status, home area, employment status and estimates of mileage each year, and Searles said a more sophisticated system based on true mileage and the times at which you drive could be cheaper for many drivers.

Retired drivers or second car drivers who used their car during the day outside rush hour might be among those who could benefit from pay-as-you-drive schemes, she added.

Norwich Union, the first insurer to offer pay-as-you-drive cover, dropped the product for new customers at the end of 2007 because it did not get the expected take-up and, it said, the motor industry showed little inclination to install equipment as standard.

Only More Than is thought to remain from the first generation of such schemes. It has offered the technology since 2006, saying it cuts its standard rate by 40% for 18-25-year-olds driving between 6am and 11pm. Driving the car outside those hours, when the chances of a car crash are highest, brings an additional fee of £25 a time.

So You've Got a Fast Car...That Don't Impress Me Much

The car you drive says masses about your personality, age, wealth and fashion sense, research by Saga Car Insurance (http://www.saga.co.uk/insurance/car-insurance/)* has revealed. Although owners of luxury cars and supercars, such as Rolls Royce's and Ferrari's, may be hoping to demonstrate great taste, they are more likely to be seen as 'flashy' (21% and 22%), particularly by women (23% and 24%).

Although convertibles like the Mazda MX-5 were only given a-thumbs-up from just one in ten (10%), it was enough to secure it as the car of choice for the fashion conscious. By comparison, the research suggested that the cars with the least fashionable owners are city cars e.g. Smart, family saloons e.g. Ford Mondeo and estates e.g. Volvo (3%).

As far as money is concerned, two thirds (66%) of the population assume that owners of luxury cars are the wealthiest, closely followed by drivers of executive saloons (65%) like the Mercedes E-class. Surprisingly, men seem to correlate wealth with style of car more than women, as 68% think luxury car drivers are well off vs. 64% women. Owners of supercars trail behind in spending power, with just over half (53%) perceiving them as wealthy, despite the average selling price of a Ferrari topping £100,000. Owners of MPV's (multi purpose vehicles e.g. Renault Espace) are bottom of the wealth stakes, receiving just 1% of the vote.

The perceived age of the person behind the wheel is also directly related to the wheels in question. The research suggests owners of luxury cars are thought of as being the oldest drivers, with the average age believed to be over 50. In comparison, if you want to appear young then hatchbacks are advised, as drivers are considered to be in their mid 30s.

If you are over 50 and want to benefit from car insurance (http://www.saga.co.uk/insurance/car-insurance/) tailored specifically for the over 50's get a quote from saga today.

Typically perceived ages of drivers by car type:

1. Luxury = 52 years old

2. Estate = 48 years old

3. Executive Saloon = 46 years old

4. 4x4 = 44 years old

5. Family Saloon = 44 years old

6. MPV = 41 years old

7. Supercar = 40 years old

8. City car = 40 years old

9. Coupe = 39 years old

10. Convertible = 37 years old

11. Hatchback = 36 years old

Estate and MPV drivers are those most welcome on the roads, with half the public believing that they are the safest drivers (50%). By comparison owners of convertibles, coupes and supercars are regarded by almost two thirds (63%) as being 'fast' drivers.

It's clear that cars, once deemed the ultimate in desirability, are now held in lower regard because of the lack of 'green' credentials and the increase in running costs. While almost a third (30%) believe city car drivers to be aware of environmental concerns, a third (33%) think the total opposite of 4x4 owners.

Roger Ramsden, Chief Executive of Saga Services, commented: "It seems drivers and pedestrians alike hold strong views on particular car types. Environmental concerns and fuel prices have contributed to a change of attitude towards motoring."

Editorial Notes:

*Survey carried out by Opinium Research for Saga Motor Insurance between the 4th and 8th September 2008 among a sample of 2,040 UK representatives.

**Car types and examples used:

• City Car - Smart, G-Whiz

• Hatchback - Honda Civic, VW Golf

• Family Saloon - Ford Mondeo, Vauxhall Vectra

• Executive Saloon - BMW 5 Series, Mercedes E-Class

• Luxury - Rolls Royce Phantom, Bentley Continental GT

• Convertible - Mazda MX-5, MGF

• Coupe - Nissan 350Z, Jaguar XK

• 4X4 - Range Rover, Isuzu Trooper

• Estate - Volvo V70, Subaru Legacy

• Supercar - Ferrari F430, Porsche 911

• MPV - Renault Espace, Ford Galaxy

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AIG may sell US auto insurance unit to Zurich

Feb 13, 2009 (Datamonitor via COMTEX) -- AIG | Quote | Chart | News | PowerRating -- American International Group, or AIG, which was rescued by the government's funds, is reportedly in advanced talks with Swiss insurer Zurich to sell its US auto insurance unit.

The auto insurance unit, which is part of AIG's personal lines unit, is expected to be sold for approximately $2 billion. The unit being sold includes the 21st Century Insurance Group Business.

Previously, the American insurer had announced its intentions to sell parts of its personal lines property/casualty businesses and life insurance operations. Zurich said that it plans to expand its North American personal lines and global life insurance businesses with new deals.

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For full details on American Internat Group (AIG) click here. American Internat Group (AIG) has Short Term PowerRatings of 7. Details on American Internat Group (AIG) Short Term PowerRatings is available at This Link.

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