Car Insurance

Many owners of Ford F-series pickups (F150, F250, & F350) and full-size sport utility vehicles (Explorer and Expedition) manufactured for model years 1999 through 2003 are dealing with a very frustrating — yet very common — problem with their odometer. The digital odometers in these vehicles seem to have a mind of their own. One minute the odometer is working fine and a moment later the digital mileage display suddenly grows extremely dim or vanishes altogether for no apparent reason. Sometimes the display can be restored by a firm smack on the dash. At other times, nothing seems to help. The display often returns unexpectedly, works fine for a while, and then disappears again later. This erratic cycle becomes progressively worse until the odometer eventually does not work at all.

If you own one of these vehicles, you can most likely identify the status of your odometer as well as your own mental state as the intermittent odometer “disease” progresses through the following stages:

1. It Won’t Happen to Me. You have seen nothing unusual about your digital odometer. Congratulations! You are one of the lucky ones and you may never have to deal with the problem. But you might want to read the rest of this article just in case. Keep in mind that if you ever see the problem (even once), the odds are great that you WILL see it again.

2. The Odometer Problem is not so Bad and I Can Simply Live with It. Your vehicle has developed the problem, but it has only happened a few times and it is not yet bad enough to consider spending money to have it repaired. You will deal with it later IF it gets worse and IF it doesn’t cost too much to have it repaired. Besides, thus far it has been easy enough to simply thump the dash to restore the display each time that it went blank.

3. It has Gotten Really Bad and It is Causing Unanticipated Problems. Your odometer is blank most of the time. You have no way of knowing when to perform mileage-based maintenance such as fluid changes, tire rotations, wheel alignments, etc. Service providers will not honor your mileage-based warranties (extended warranties, tire warranties, major repairs, etc.) because they cannot determine whether the warranted miles have elapsed. You have thought about trading the vehicle, but you can only get a very low trade-in value. It is appraised as a high-mileage vehicle even though you know that the actual miles on the vehicle are very low for the model year. But you can’t prove it because the odometer doesn’t work. It is time to visit the dealer and have the odometer repaired. Surely it won’t be expensive to repair.

4. I Visited My Ford Dealer Today to See about having the Odometer Repaired. I’m Still in Shock! I was totally unprepared for the $600 estimate. The dealer said the instrument cluster is defective and the only way to repair it is to replace the instrument cluster with a new one. Over $400 for the cluster plus $200 for installation and programming the new cluster to the vehicle mileage and the PATS system. I decided that I could live with the problem for a while longer. I need to look for cheaper alternatives. I think I saw the odometer flicker on for a brief moment one day last week. Perhaps it can be repaired instead of replacing it. I will check with a few odometer repair shops.

5. I Spent Most of the Week Calling Odometer Repair Shops. I would be happy to pay the $150 to $200 that most repair shops charge to fix this problem. The only thing holding me back is the fact that I have to remove my instrument cluster and ship it to the repair shop. They told me that they would try to repair it next week or perhaps the following week if I could get the cluster to them by the end of this week. Unfortunately, I’ve never removed an instrument cluster and I’m afraid that I will damage it (or my vehicle.) Besides, someone told me that my vehicle won’t run without having the instrument cluster installed. Looks like I will have to rent a vehicle for a couple of weeks while the cluster is being repaired. That is, IF I can figure out how to remove the cluster without destroying something important. I’m sure that rental car is going to be costly. Maybe paying the dealer $600 is not such an unreasonable thing after all. If only I had $600 to spare. On the other hand, perhaps I should just try to live with the problem. Or perhaps I should just trade the vehicle. But I need to fix the odometer before I trade it. I’m s-o-o-o-o Confused!

The GOOD NEWS is that the common cause of most intermittent odometer problems has been identified and it CAN be repaired without replacing the instrument cluster. You don’t need to spend $600 to have the dealer replace the cluster.

The Better News is that there is nothing seriously wrong with your odometer. Your odometer is still working and accurately tracking your mileage. The display problem is caused by one (or more) defective solder joint(s) on a printed circuit board (located on the back side of your instrument cluster.) These defective solder joints are preventing the odometer signals from reaching your odometer display module. It simply cannot display the mileage due to the defective solder joints.

The Best News is that you don’t need to send the instrument cluster to a repair shop for repairs because…You can fix it yourself! A number of online forums can be found that discuss the intermittent odometer problem. These forums provide several years of feedback from many individuals who have repaired their own odometer problem. These pioneers discuss the lessons learned through their own trial and error and share the resulting successes and mistakes with other forum members. You should be able to fix your own odometer if you first carefully read these forums and apply the knowledge to your own repair efforts.

Don’t be in a rush and attempt the repair before you have read the entire threads, so that you can plan ahead and avoid the mistakes that many people have made throughout the years, some of which resulted in excessive work, broken headlight switches, damaged trim and paint, etc. All these can be prevented by learning how to remove each component the correct way before attempting to do it yourself.

If you still do not feel comfortable with attempting the repair after studying the forums (or if you would rather have all the information extracted and laid out before you in a concise, detailed and easy-to-follow guide), there is still yet even better news.

The Greatest News is that all of the information contained in these forums, including the lessons learned from the mistakes of others has already been meticulously extracted, combined with additional experiences of performing the repair, and transformed into a detailed and richly illustrated intermittent odometer repair manual, which will guide you step by step through the repair of your own odometer. If you can use a screwdriver and a low-wattage soldering iron (less than 30 watts), you can perform this repair from start to finish in about two hours and for relatively little cost.

If you are not proficient with a soldering iron, you can use the repair manual to easily remove your instrument cluster and identify the defective solder joints. Then you can have the actual repair (resoldering the defective solder joints) performed at a local electronics repair shop. In most cases, the solder joints can be resoldered in only a couple of minutes at a cost of less than two dollars.

Fewer car accidents, new anti-theft technology and safer cars are lowering car insurance rates across the country this year for the first time since 1999.

The better news: Rates are dropping significantly in New York, thanks to a crackdown on fraud and much keener competition, according to insurance industry experts.

Nationwide, claims were down 3 to 5 percent in 2006 and the average cost per claim, a figure that includes the price of medical care and property damage, rose only 2 to 4 percent, according to Michael Barry of the Insurance Information Institute.

In New York, declining rates have spawned an advertising blitz in which the top players - Geico, Allstate and State Farm write almost half of local policies - are battling for market share.

While Geico did not return requests for comment, The Wall Street Journal estimates the firm spent as much as $400 million on marketing in 2005, including the sponsorship of Geico SportsNite, a daily highlight show on SportsNet New York. Earlier this year, the firm paid $1.6 million in a two-year deal that places the Geico name on each tollbooth at the George Washington Bridge and gives it space on the Port Authority’s Web site.

“It’s hard to quantify how much is spent on advertising, but look what’s going on,” Barry said.

“New Yorkers are getting bombarded with direct mail, television advertising and every other form of advertising. Even a casual observer knows this is good for consumers.”

Long Island-based TSC Direct, which sells car insurance in New York City and Long Island, has also turned up the heat, flooding local newspapers and radio waves with a cure for “reptile dysfunction” in a Viagra-inspired swipe at the Geico gecko.

“We have to do something in order to be heard,” said Penny Hart, the firm’s president. “We have no choice.”

TSC, a unit of Jericho-based Tri-State Consumer Insurance Co., boasts that it can save consumers as much as 35 percent on car coverage. It charges an average $890 per year, about 20 percent lower than three years ago, according to Hart.

Hart said the company’s 16,000 auto policyholders pay less today because the state has been significantly more aggressive in fighting fraud.

“It’s a culmination of lots of reasons, including the change in New York’s no-fault laws,” added Bill Goff, a New York-based product manager for Allstate, which has dropped rates by 5 percent in each of the last two years. “But fraud detection plays a large role.”

In 2004, fraud cost insurers $1 billion in New York alone, according to the insurance institute’s Barry.

“The state, along with law enforcement, took a much harder look,” he said. “And it’s saved ratepayers a lot of money.”

Despite the decline, New York remains near the top of the cost list. In 2004, the latest statistics available, the average New Yorker paid $1,171.62 to insure a car, the third highest rate in the country.

New Jersey, at $1,221.08, and the District of Columbia, with an average rate of $1,184.63, topped the list. New York had held the second-most expensive spot on the list in previous years.

Remember insurance brokers, that mysterious breed of financial adviser who used to maintain offices on every high street? New technology and the modernisation of the financial services industry were supposed to spell the end for these middlemen, whose job it was to search the market for the best deals on insurance.

Brokers, however, are making a comeback, particularly in the motor insurance market. The launch of insurers that deal direct with the public - the approach pioneered by Direct Line - has failed to kill off the intermediary sector. So has the latest threat - the emergence of online price comparison sites that give you car insurance quotes in seconds at home. Peter Staddon, head of technical services at the British Insurance Brokers’ Association (Biba), says: “The private motor industry is worth [pound]5.8bn and brokers now account for a third of all policies.”

At first sight, online price comparison services offer the perfect solution if you’re shopping around for car insurance. You enter all your details once and the sites search the market for the best possible price. However, there are flaws with the model. For one thing, if your case is at all non-standard, the site’s generalised questionnaires won’t give you a meaningful quote that you’ll be able to convert into genuine premiums.

Far more people are non-standard cases than you might think. The list includes anyone driving a car that has been modified in any way, as well as any imported cars.

Even more significantly, you’ll also find it difficult to use online price comparison sites to get realistic quotes unless your driving licence is clean. If you’re one of millions of drivers with points on your licence following a speeding offence, for example, the sites won’t produce a useful result, because most insurers won’t quote online for such cases. Given that 2.2m speeding convictions were handed out last year, a huge minority of drivers are effectively barred from using the internet to shop around for cheaper insurance.

To add insult to injury, if you are a non-standard case, it’s actually more important to scour the market for the best possible deal, because insurers have such different policies on who they want to cover and how much it will cost. Some insurers charge no additional premiums for drivers with one speed camera conviction, but raise prices sharply for two or more offences. Others rack up charges on the first offence.

The same is true of other non-standard risks. Most insurers won’t even consider applications for cover for non-standard cars, or vehicles that have been modified. Those general insurers that do cover such risks are likely to charge far more than specialists in this market.

Even young drivers can be caught out in this way, because only a minority of insurers are interested in their business. Searches on price comparison sites won’t capture the deals offered to young drivers, such as Norwich Union’s pay-as-you-go policy. Staddon also argues that buying motor insurance on the basis of price alone can be a false economy. Brokers, he points out, have a relationship with insurers that means they understand the intricacies of each compa- ny’s policy - and they can act as your advocate when you make a claim.

Typically, a broker has a relationship with some, but not all the insurers in the market. For this reason, Biba suggests getting quotes from three separate brokers. Brokers charge a commission - typically 10 per cent of your premium - but they must be open about the costs.

“Brokers particularly come into their own when you need someone on your side to deal with an insurer,” Staddon says. This week alone, one of his members dealt with an insurer refusing to pay out when a driver was pulled from his car by a thief while about to set off on holiday with a fully-loaded vehicle. The insurer initially refused to pay out because keys were in the ignition. “Our mem-ber was able to call the chief executive of the insurer in question direct to insist this wasn’t acceptable,” Staddon says.

Brokers and price comparison sites don’t have to be mutually exclusive. It’s worth using the sites to get an idea of what you might have to pay. In many cases, however, a good broker should be able to match these deals - plus you’ll get a service too.

‘A better service than the internet’

When David Shaw, a solicitor from north London, received his renewal notice from Direct Line, he was shocked to discover a 10 per cent increase in his annual premium. Despite having five years of no- claims bonus, the insurer wanted more than [pound]630 to insure his Skoda.

“I’ve been meaning to shop around for a better deal for the last few years, but I’ve never quite got round to it,” David says. “This time, I was determined to see if I could save money, so I logged on to two internet sites I’ve seen advertised.”

Unfortunately, neither Insuresupermarket.com or Confused.com were able to give David a full range of quotes. While his details were relatively standard, David has six penalty points on his licence, following two speed camera offences in the past three years.

“This seemed to take me out of the net as far as online price comparison services went. In the end, I decided to approach a broker to do the work for me.” James & Browne, a Coventry-based firm of insurance brokers, were able to use their technology to get quotes from a panel of car insurers. They saved David around [pound]30 on his car insurance.

“The saving wasn’t that huge,” says David. “But this was the first time I’d ever used an insurance broker - I found it far easier than using an internet-based service.”

Motor insurance premiums look set to edge up in the coming year after insurers said yesterday that competition for business meant that they risked losing money on the policies they sold.

But holders of household insurance policies were offered a small ray of hope that the downward trend in the cost of their cover is set to continue, the Association of British Insurers said.

John Carter, chairman of the ABI, the industry’s trade body, said: “General insurance policyholders have received major benefits from an extremely competitive insurance market over the past two or three years in terms of lower premium and improved cover. I am not sure that can continue.”

The ABI’s warning of higher prices for car drivers came as it released figures showing that the industry made overall losses of pounds 34m in the UK market last year on premiums of pounds 5.94bn. This compared with a pounds 297m profit on income of pounds 6.37bn in 1994.

The trade body yesterday attributed the bulk of the premium fall to the scramble for business among insurers.

On the non-motor side, including household insurance, profits also dropped substantially in the UK, down to pounds 403m in 1995 from pounds 950m the previous year.

A large slice of the profits downturn followed the cold winter weather, mainly in Scotland, which has so far led to claims worth pounds 320m. Many more claims, mainly for business interruption, have yet to be determined.

Mark Boleat, director general of the ABI, said yesterday: “Premiums fell in many other classes of business, while insurance companies achieved good profits.

“Loss prevention measures played a major part in achieving this satisfactory position. However, insurance is sometimes an unpredictable business, as shown by the significant increases in subsidence and winter damage claims.”

Insurers have tried to smooth out some of the losses by including much of the payments made so far in last year’s accounts, where they have been buried by large profits reported at the time. But some said yesterday that if last year’s hot summer repeats itself, subsidence claims will rise even further.

Separately, life insurance companies reported an end in sight to the poor sales that have bedevilled the industry in the past three years.

Net premium income in the UK for life and pensions business reached pounds 44bn, up 3 per cent on 1994.

Motor insurance premiums are set to rise after a steep 18-month fall in prices, according to research by the Automobile Association’s insurance arm.

Although the average cost of cover fell more than 2 per cent in the year to July, premiums rose by 1.5 per cent in the past quarter, a survey of 37 different insurers showed yesterday.

The potential turn in the market has, however, left household policies unaffected. Premiums continue to fall, recording an average annual drop of more than 4 per cent.

Mark Wood, managing director at AA Insurance, said: “It may be a little early to suggest that car insurance premiums are definitely moving up again.

“But the movements of the past few months suggest that after two years of cost-cutting and loss-leading among some insurers aiming to win market share, the market may be firming up again.”

The move towards firmer motor premiums comes as some insurers who recently began telephone-based cover attempt to stem vast losses suffered in their bid to capture market share.

Steven Bird, insurance analyst at Smith New Court, said: “Some motor insurers have clearly plucked up enough courage to implement rate rises in the second quarter.”

His comments came despite an announcement by Direct Line, the UK’s biggest telephone-based insurer, that it is to cut rates by up to 20 per cent for new and existing policyholders.

The company said the reductions would involve discounts of up to 10 per cent for restricting cover on named drivers.

Further premium cuts will apply to some car models, plus 150 lower-risk postcodes.

A Direct Line spokesman said that about 50 per cent of UK drivers stood to benefit from the reductions by an average of 5 to 10 per cent.

But he admitted that, in a bid to offset share price falls by Direct Line’s parent, Royal Bank of Scotland, when the rate cut was revealed on Tuesday, the insurer briefed analysts saying that the aggregate annual reduction would only be 1.5 per cent. At close yesterday, RBS shares were down 5p to 432p, after an 8.5p drop on Tuesday.

“What we have been saying is that if the cuts were simply applied to our existing policyholder base, this would lead to an overall reduction in premiums of 1.5 per cent,” the spokesman said. “But we anticipate the cuts will apply even more to new customers. We are expecting more than three million calls for quotes in July, August and September.”