Many auto insurance companies are trying to keep your business by offering perks and incentives. Wondering what all of these things mean? Here are some key auto insurance terms defined:

Accident Forgiveness: In the past, every time you got in an accident your insurance premiums soared and you ended up paying way more. But now many insurance companies are offering accident forgiveness. If you’re in an accident that is your fault, accident forgiveness will protect your driving record and prevent your rates from skyrocketing.

Deductible Rewards: Many insurance companies have realized how annoying it is to be a great driver, but not get any incentive for it. Now with deductible rewards the insurance company will take a certain amount of money off of your Collision deductible every year you go without having an accident.

Safe Driving Bonus: When you don’t get into accidents, the insurance company doesn’t have to spend any money on you. Now some companies are giving you a piece of your money back as a reward for being a safe driver. Every six months to a year they’ll cut you a check if you haven’t had any issues. The amount of the check is usually equal to a small percentage of your premium.

New Car Replacement: This term is just like it sounds. Since cars lose their value so quickly, drivers who totaled their new cars ended up with a bad deal. They’d get the money equal to what their car was worth, which worked out to be a bad deal. Now some auto insurance providers are promising to give you a new car if yours is totaled within the first three years– not just the depreciated value.

New laws in New York make it harder for insurance companies to raise premiums. The governor signed into law the Governor’s Program Bill No. 278 which gives the New York State Insurance Department authority to review and approve insurance premiums before they are issued. It passed with overwhelming support in a 111-17 vote.  Before this new law the insurance industry was pretty much self-regulated, according to a report by dotmed.com. “Deregulation of health insurance premiums is a failed experiment leading to unjustified premium increases and more people losing their health insurance coverage,” Governor Paterson said in prepared remarks.

Now, if insurance companies want to raise rates, they have to apply for approval first. “Before, health insurance companies could raise premiums as much as they wanted, and all we could do is check long afterward if, in fact, they were overcharging,” David Neustadt, spokesman for the New York State Insurance Department, told DOTmed News. “The current rates are increasing at a much faster rate than before [the file and use law].” This way governing bodies can make sure any increases are justified, and not just created by insurance companies so they can increase bottom lines.

The law will impact any rate increases set to take effect on or after October 1, 2011. “I applaud New York on its bold move to hold insurance companies accountable and prevent the kind of unreasonable rate increases that have made health insurance unaffordable for many American families,” said U.S. Health and Human Services Secretary Kathleen Sebelius in a statement, according to dotmed.com. “This is the kind of action that, together with the Affordable Care Act, is shifting power back to consumers.”

A panel of CEOs reported to the White House at the request of Health and Human Services Secretary Kathleen Sebelius. Sebelius wanted to know why insurance premiums were increasing so rapidly in recent months. Attending the meeting were CEOs of United Health Group, Inc, WellPoint Inc, Aetna Inc, Health Care Service Corp, CIGNA HealthCare Inc, as well as representatives from the National Association of Insurance Commissioners. President Obama also visited the meeting and read a letter from a 50-year old cancer survivor from Ohio who had experienced a 25% hike in insurance premiums since 2009.

According to reports, Sebelius wanted to hear from the executives as to why there was a recent jump in premium rates in several states. “I asked them to explain why these crushing burdens are being placed on middle-class families and what we can do to lower costs,” Sebelius said in a report on Insurance Networking News. “I also asked the CEOs to post the actuarial justification for these stunning rate increases online in an easy-to-understand manner, so that consumers can see why premiums are skyrocketing to the point that some people in the individual market can no longer afford coverage. I hope they will act quickly and make this information available to all of us. If insurance companies are going to raise rates, the least they can do is tell us why.”

The report says that Aetna CEO Ron Williams defended the increases, saying they were reflective of costs that insurance companies were paying to drug makers, hospitals and other health-care companies that were forcing increases to the cost of medical care. “The rate is really reflective of our other parts of the health-care delivery system,” said  Williams in a Wall Street Journal report. They said that trying to lower premiums without addressing those costs was destined to fail.

NAIC’s President says the hikes are another example of why all states need to be allowed to regulate their own insurance premiums. “State regulators are best positioned to perform rate review and many of us do so with great success,” said Jane L. Cline, NAIC President and West Virginia Insurance Commissioner. “Some, however, have not been given the authority by their state legislatures to review and deny unjustified increases. We believe that a federal backstop could help encourage these legislatures to provide that authority.”

Sebelius asked the CEOs to post information online that explains their breakdown of revenue including how much goes towards administrative costs, how much is spent on marketing and what goes towards actual care. She said making that information easy to access by consumers would increase transparency about what is happening in the health care industry and why rates are increasing.

Health insurance for the self-employed is always a dicey topic. How do you get good health insurance when you are self-employed? How do you get good health insurance and still be able to afford it?

The number of no-fault insurance fraud cases have risen steadily in New York with 11,000 incidences reported already this year. Compared to last year this is a seven percent increase. The New York State Insurance Department is suggesting changes be made in required auto insurance coverage to hopefully eliminate the number of fraud cases. The changes will impact consumers in terms of the insurance requirements and the cost of auto insurance.

The Maryland Insurance Administration has a fraud division that is run by Carolyn Henneman. It is her division’s responsibility to process complaints indicating possible cases of all types of insurance fraud. The division recently published a report for the fiscal year just ending 6/30/09 and there was some interesting information in it.

With so many different provider choices for auto insurance, how do you go about selecting a suitable company and policy? With auto insurance, you are buying coverage against the risk of accident or theft. You will want the insurance coverage to pay out for any claims such as, loss of life, bodily injury, vehicle damage and medical care, if the situation was caused by your fault.