Auto Insurance Question

[CoolRich59]

I've been ER'd for about 4 months now (and thoroughly enjoying it ).

It dawned on me the other day that maybe I should contact my insurance company to let them know that I am no longer using my car to commute to and from the office (45 mins each way). My thinking is that, as I'm no longer commuting, it should lower my insurance premium. Seems logical, right?

But, I've learned that insurance companies don't always think the way we do. For all I know, they might find a reason to increase my premium. So, before calling them, I thought I would check here to see if anyone else has done the same and what their experience was.

Thanks in advance for any input.

 

[97guns]

Yes, they will give a discount for low mileage. Check out Geico, I just moved to them, In just 15 minutes I saved $350

 

[CoolRich59]

Yes, they will give a discount for low mileage.

Thanks. That's what I was hoping.

Check out Geico, I just moved to them, In just 15 minutes I saved $350

I actually dumped GEICO last year. After being insured by them for 10+ years with no claims or accidents, they started raising my premiums with every renewal. I called to ask why and got a lot of evasive answers. So, I shopped around and got a better deal with another carrier. Of course, ymmv.

 

[CRLLS]

If Geico offered me $350 savings for one of my cars, I'd be getting insurance nearly for free. Just sayin'.

State Farm of IL, gives a low mileage discount, which we take advantage of. I can't say that in 4-5 years they ever checked on the actual mileage driven. They also offer a dongle that monitors your driving style and may give you a discount for having good driving skills (no panic stops, fast acceleration, sharp turns or...). I'm sure other insurance co's do a similar type system. I never signed up for that discount. Too much like "big brother" for me.

 

[97guns]

I think they all raise their rates on you every year, I seem to be shopping around every 4 years or so, I just dumped Allstate. I’ve been with AAA, 21st Century, Liberty Mutual and several others, Geico really came in low to hook me in.

 

[CoolRich59]

They also offer a dongle that monitors your driving style and may give you a discount for having good driving skills (no panic stops, fast acceleration, sharp turns or...). I'm sure other insurance co's do a similar type system. I never signed up for that discount. Too much like "big brother" for me.

Me too. My current carrier offered me this as add'l discount when I started my coverage. I was tempted, but then thought: Do I really want them to have that kind of information? No. So, I took a pass.

However, I suspect that at some point this kind of monitoring will be mandatory.

 

[scrabbler1]

I worked in the actuarial field for 23 years, specializing in personal auto insurance. From what you wrote, you would be changing from the more highly rated drive-to-work use class to the lower rated pleasure use class. This is in addition to any annual mileage-based reduction.

 

[meierlde]

I worked in the actuarial field for 23 years, specializing in personal auto insurance. From what you wrote, you would be changing from the more highly rated drive-to-work use class to the lower rated pleasure use class. This is in addition to any annual mileage-based reduction.

Some companies have decided that there is no distinction between driving to work or pleasure at least in some locations. So that might not make a difference depending on where you live. (I live in county of 40k folks so there are not a lot of traffic jams. )

 

[Bamaman]

Keeping low claims,.high FICO and no tickets is important so you can change companies every 2-3 years. They start off with a teaser rate and raise premiums quick. They also require to have homeowners insurance govern the big discounts.

 

[Scuba]

We saved quite a bit on our premiums going from long commutes to very low mileage.

 

[mountainsoft]

It dawned on me the other day that maybe I should contact my insurance company to let them know that I am no longer using my car to commute to and from the office (45 mins each way). My thinking is that, as I'm no longer commuting, it should lower my insurance premium.

When I replaced my car last year I asked my State Farm insurance agent about a low mileage discount. I work from home so I typically drive less than 3000 miles a year. He enthusiastically said "SURE!" and immediately changed my policy. I asked whether I needed to monitor my mileage for the discount, or provide some kind of proof. He said No, it's just based on the national average of 7500 miles per year. Over 7500 miles is normal rate, under that it's considered low mileage.


Good thing I didn't need to keep track because I logged nearly 14,000 miles last year driving back and forth to my mom's house after her stroke. Thankfully, we sold the house and my mileage should drop back to the typical 3000 mile range.


In any case, the discount isn't huge. I think my rate dropped about $50 for each six month renewal. Still, that's 100 dollars a year I can use for something else.

 

[Aerides]

I had been with SF since I started driving. So, decades. At least 2 of those with no claims at all). SF couldn't even come close to Geico on price. They didn't try. My premiums had been going up when logic says to come down. They base their premiums far more on the car than the driver.

DH was with progressive. Combining us both with them was a close 2nd, but Geico was about $200 a year less. It was also very easy to switch.

I recently had to produce my insurance card to get a loaner when the car was in the shop. My wallet card was expired. Geico's site was so easy I was able to log in and show my current card on my phone in about 2 minutes, having never even found that before.

 

[joeea]

It dawned on me the other day that maybe I should contact my insurance company to let them know that I am no longer using my car to commute to and from the office (45 mins each way). My thinking is that, as I'm no longer commuting, it should lower my insurance premium. Seems logical, right?

Maybe.

Are you actually consuming fewer miles overall? Or are you exchanging your commute for long travel drives?

It's worth asking your insurance agent.

 

[zinger1457]

My experience with Geico many years ago was the same as others here, rates quickly went up >50% in one year with no accidents or tickets. I've had good luck with Progressive, been with them over 10 years with reasonable (and sometimes no) increases.

 

[mountainsoft]

Check out Geico, I just moved to them, In just 15 minutes I saved $350

I just ran a quote on Geico using the same coverages we have at State Farm. Geico didn't have the same coverage on a couple items so I just picked the next closest (worse coverage). The Geico quote came close but was still more expensive than our current State Farm policies.

 

[USGrant1962]

When I replaced my car last year I asked my State Farm insurance agent about a low mileage discount. I work from home so I typically drive less than 3000 miles a year. He enthusiastically said "SURE!" and immediately changed my policy. I asked whether I needed to monitor my mileage for the discount, or provide some kind of proof. He said No, it's just based on the national average of 7500 miles per year. Over 7500 miles is normal rate, under that it's considered low mileage.


Good thing I didn't need to keep track because I logged nearly 14,000 miles last year driving back and forth to my mom's house after her stroke. Thankfully, we sold the house and my mileage should drop back to the typical 3000 mile range.


In any case, the discount isn't huge. I think my rate dropped about $50 for each six month renewal. Still, that's 100 dollars a year I can use for something else.

I just changed a car from commuter to under 7500 with SF. Agent asked for current mileage, and said SF may send a letter in 6 or 12 months asking to certify the mileage at that time.

But we've had other cars on <7500 and have never been asked to certify mileage.

 

[ExFlyBoy5]

Some companies have decided that there is no distinction between driving to work or pleasure at least in some locations. So that might not make a difference depending on where you live. (I live in county of 40k folks so there are not a lot of traffic jams. )

I am with Amica and when I retired, I was already at the "lowest" mileage tier (they did it miles per day as opposed to per year) and when I called to tell them I would be driving even less, they said it would make no difference. I didn't realize any change in my policy. This is in the Atlanta metro area.

 

[TrvlBug]

We have SF and when I retired and called to switch my car from commute to pleasure driving, my agent stated they don't make that distinction, but rate only on mileage driven and we were in the lowest tier at 7500/car per year.

She suggested and we have been doing it for years, that in order to further reduce premium costs, we could report mileage. As we drive each car ~2500 per year, this has saved us a ton of money. They send us an e-mail 2x/yr and I report mileage...easy peasy.

 

[Bir48die]

This is a timely post for me. I am going through the same process. Have been a Farmer's insured for probably 25 years at least. I have watched the steady creep of our premiums. We have three autos: wife's gets the most miles with about 12,000 due to visiting her mom weekly. Mine is less than 6,000 and have a truck that's less than 3,000 and only fishing/camping/hauling use.

So I email my guy and tell him I think their pricing is off. He proceeds to tell me that "it's only a $35 jump" per six months. So, I tell him that I'm retired, we drive less, have had no tickets or accidents in a long time and our credit scores are at the top of the heap.

He basically says there's not much he can do unless we mess around with deductibles, etc. However, his only solution was to treat us as a new customer and re-write the policy. We would then have to pay for "accident forgiveness" on all three cars. At the end he says that he'd hate to lose us and just to be fair they have paid $7,600 in claims. I'm not sure what those claims were and if they did pay then they are still ahead with the $75,000 I've paid in car and homeowners insurance over that period.

Anyway I start the searching process and did the Geico, Progressive and Amica quotes. The first two are literally half of current premiums. The last saves us $800/yr or more just on the auto piece.

It got me thinking back to calling on Costco back in the day. They would hit you every year to either make the product better at the same price, drop the price or size it up at less cost per oz. Kept my pencil sharp and I respected them for that. I think like many things in life, companies take customers for granted and fail to review and reward good behavior. As it sits we're just subsidizing those who are the biggest risk.

Long story short we'll be moving our business.

 

[CoolRich59]

I called my carrier yesterday and -- no surprise -- there'll be no decrease in my premium despite the fact that I'm no longer commuting.

This is a timely post for me. I am going through the same process. Have been a Farmer's insured for probably 25 years at least. I have watched the steady creep of our premiums.

Thanks everyone for your comments.

I think this Bir48die is having the same experience as me. It looks like the practice is to entice you with a low premium to get you to switch, then start increasing premiums on the renewals.

I was with Allstate for a couple of decades and left because of constant premium increases (and terrible service from my agent).

I moved to GEICO, and was with them for 10+ years. Then left when my rates increased with each renewal.

I went with State Farm and was furious when my premium jumped 6% on the first renewal. I left State Farm after one year for AAA. They increased their premium on my first renewal, but it was not enough for me to start looking (yet).

I should also note that I have a pristine record. Apart from a couple of minor tickets over the last 30 years (e.g., illegal left turn), I have zero accidents. You would think insurance companies would love me as a client. I dutifully pay my premiums every six months and they have never had to pay out a dime on my behalf.

Instead, it seems like I'm punished for reasons like "unanticipated losses that need to be spread across our insured base", or "increased number of thefts of cars like yours".

 

[DatumPoint5]

There are two "views" of a customer's experience from an insurance company's viewpoint.

One - your clean, no accident, no ticket experience should be rewarded.

Two - you have had many years without incident and you are "bound to have an incident/accident".

They start out pricing your coverage as "number one" when you switch to them initially.

Then, they immediately "start the clock" and price you on number two over the next several years.

It is Unfortunate, but, I believe this all is true.

 

[Mr._Graybeard]

We've been with Erie (home, auto, umbrella) through an independent agent for the last six years. So far we've seen minimal premium increases, like a couple of dollars a year.

We haven't filed a claim, but the company has a good rep for service.

They don't operate in every state, but I believe their policies are available in Illinois.

 

[scrabbler1]

There are two "views" of a customer's experience from an insurance company's viewpoint.

One - your clean, no accident, no ticket experience should be rewarded.

Two - you have had many years without incident and you are "bound to have an incident/accident".

They start out pricing your coverage as "number one" when you switch to them initially.

Then, they immediately "start the clock" and price you on number two over the next several years.

It is Unfortunate, but, I believe this all is true.

From my 23 years of working in the actuarial field, specializing in personal auto insurance, I can tell you that both items are true and are always reflected in the rates the insurance companies charge.

One of the secondary class rating elements is the driver record, consisting of accidents and some moving violations (the insurance company has some discretion about what that is). Drivers with more of these driver record "points" will pay more than drivers with fewer or zero points. Some companies allow discounts for their insureds who have long periods of being clean risks with them.

Insurance involves pooling a bunch of risks in order to spread it out among everyone in the pool. Even in a large pool of drivers with clean records, some of them will have an accident and the insurance company will have to pay out money to them or on their behalf. This is priced into the rate that every driver pays, even if he remains a clean risk.

 

[CoolRich59]

Insurance involves pooling a bunch of risks in order to spread it out among everyone in the pool. Even in a large pool of drivers with clean records, some of them will have an accident and the insurance company will have to pay out money to them or on their behalf. This is priced into the rate that every driver pays, even if he remains a clean risk.

I get that, but it does not seem to work that way in practice.

Instead it seems that if you have a claim, they raise your rates because you're a higher risk. And, even if you don't have any claims, they raise your rates because they need to spread the risk of other claims across the insured base.

But, I have yet to have an insurer call me and say: You haven't had any claims in xx years of driving. We'd like to reduce your rates.

 

[GrayHare]

Anyway I start the searching process and did the Geico, Progressive and Amica quotes. The first two are literally half of current premiums. The last saves us $800/yr or more just on the auto piece.

Keep in mind the low-ball first year, increasing-rate game is played by most insurers. If you jump ship, then later go back to the previous insurer they will not raise your rates by as much subsequently because they know you're a ship jumper.