Senator asks DOJ to investigate car insurance

Hotnewstoday: A U.S. senator is urging the Justice Department to investigate insurance companies and auto repairs done at their 'preferred' repair shops across the country, because of safety concerns for consumers that were identified in a recent CNN exclusive investigation.

Sen. Richard Blumenthal, D-Connecticut, on Thursday called on the Department of Justice to begin an investigation into auto repairs being done nationwide, because the repairs may often be done by using recycled, remanufactured, re-used, or after market parts, which he says could lead to unsafe vehicles.

The CNN investigation, which aired on Anderson Cooper 360, examined allegations by hundreds of auto body shops across the country that accuse major insurance companies of pushing them to use cheap parts and sometimes dangerous practices to repair vehicles after they were in accidents.

More than 500 garages from 36 states have joined in a lawsuit against the nation's top insurance companies; the body shops believe the insurance industry is involved in a deliberate system to send consumers to shops that are pre-selected by insurers to do the absolute bare minimum to fix them, even pushing body shops to use "used or recycled parts", because they're cheaper.

Several attorneys general are also getting involved; the Louisiana's attorney general office has filed suit against State Farm already, and says it is preparing lawsuits against other insurers. Mississippi's attorney general says it is preparing a lawsuit of its own. And Oklahoma's attorney general has issued a warning to insurers on its website raising the same concerns.

Citing CNN's reporting in the letter to U.S. Attorney General Eric Holder, Blumenthal wrote: "Contrary to what consumers may be led to believe by their insurers, repair shops preferred by insurers do not necessarily equate with quality repairs."

"Unfortunately, many consumers are also being misled into thinking that they are required to have their car repaired at one of these shops. This has the harmful effect of limiting consumer choice, creating a serious safety risk, and suppressing competition in the auto repair industry," he said.

The issue is a nationwide one, according to John Eaves, the lead attorney for the body shops involved in the lawsuit, who was featured in CNN's investigation.

"This issue involves people from Maine to Mississippi to California," said Eaves. "Every state in the union has experienced the same sort of struggle here between the body shops trying to do the work the right way, and the insurance companies trying to cut corners and force them to use unsafe parts and unsafe methods on their cars."

Louisiana Attorney General James Caldwell told CNN he chose to sue State Farm Insurance because State Farm is the biggest insurer in his state, though members of his staff are preparing other possible subsequent lawsuits to follow.

CNN contacted insurance companies about Blumenthal's request for a DOJ investigation, but had not received a response by publication time.

In legal filings, State Farm has denied all the allegations in the auto bodies' or the Louisiana's lawsuits, including that it insists on using aftermarket parts.

State Farm would not grant an interview to CNN, but said in a statement for the original CNN story: "Our customers choose where their vehicles are going to be repaired. We provide information about our Select Service program while at the same time making it clear they can select which shop will do the work."

State Farm told CNN to talk to Neil Alldredge, of the National Association of Mutual Insurance Companies, for more specifics.

"Most companies offer a choice to consumer. Any sort of aftermarket part that you might hear about are usually cosmetic parts," Alldredge said. "So they're nothing related to the safety, the mechanical parts of the operation of the vehicle. ... In many cases these parts are no different. They're made in the same factories. One just comes out with an auto manufacturer's name on it."

Alldredge said he did not believe "steering" was happening. He said a benefit of a preferred-shop program came for customers getting repairs done quickly, but it was always a customer's choice.

Singles pay more for car insurance

Hotnewstoday: Singles may have more fun, but they also pay more than their married friends for car insurance.

A single 20-year-old pays 21% more than a married 20-year-old for the same policy, a new study from InsuranceQuotes.com found.

To an insurer, it comes down to statistics -- and singles get into more accidents.

Married drivers might be more cautious since they're more likely to have kids, said Laura Adams, an analyst an InsuranceQuotes.com.

Drivers in their 20's who are married actually get bigger discounts than married drivers in their 30's, who only get a roughly 3% break.

Gender and age also play a big role in what drivers pay.

Men pay more than women when they're younger. A 20-year-old man pays 22% more than a woman the same age for the same policy, the report found.

Related: Teen drivers: Buckle up and lower the volume, Dad's monitoring you

The good news: Car insurance costs for both men and women decrease every year until age 60.

The report used data from the largest insurance carriers in each state and D.C. In its comparisons, it assumed the drivers were employed, had a bachelor's degree, a clean driving record, an excellent credit score, and drove a 2012 sedan.

Hawaii is the only state that prohibits insurance companies from considering marital status in rate calculations. And age cannot be a factor in either Hawaii or California.

Over Insurance for Your Car: An Insurance Scam

Hotnewstoday: For years that we have been in the industry, Axis Capital, with our group of insurance and reinsurance companies from our main base in Bermuda to our branches in more than 15 states in the United States, England, Australia and even Singapore in Asia, has heard a lot of different kinds of scams from household to life, to healthcare. The worst and the most number of reports that we have trace to car insurance.

When you with your car insurance agent, it is likely that you have another appointment set: your grocery list, your business meeting, the kids, the yard work. You just signed the papers and listen to less than half of what the agent is saying. When it is time to renew your policy, you review the paperwork and begin to wonder if those high monthly premiums are a result of carrying too much insurance on your vehicle. But how do you know if you're over-insured?

In a sense, driving a car that's over-insured is preferable to being uninsured especially in Jakarta, Indonesia where accidents happen every hour and it would be better that during these times, your wide scope of insurance is there to save you. However, the amount of liability coverage the law requires you to carry might be lower than the amount you're paying for each month.

But whether or not this is a good idea depends on your financial situation. If you cause an accident and the damages exceed your coverage, a lawsuit could target your financial assets -- your home, salary and certain investments -- to make up the difference.

Beyond carrying less liability coverage, you can prevent your car from being over-insured by eliminating redundancies in your insurance policy. Your insurer might also push you to sign up for extras like towing and roadside assistance, but if you have a membership with the American Automobile Association (AAA) or a similar group, these services are already covered.

If you drive an older car and have collision and comprehensive coverage on your insurance policy, you might consider dropping them. Collision coverage pays for damages caused to your car during an accident, regardless of your responsibility; comprehensive coverage pays for repairs stemming from vandalism, cracked windshields and other non-collision forces.

It's also possible to be over-insured when you're behind the wheel of a rental. Look at the rental company's insurance policy and cross-reference it with your personal auto insurance policy. Chances are you don't need the extra coverage that the clerk tries to sell you, and you might even be covered by your personal auto insurance policy or through the credit card company you use to reserve and pay for the rental.