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Auto insurance with sinking ship AIG direct
Old 09-15-2008, 10:10 AM   #1
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Auto insurance with sinking ship AIG direct

I have my automobile insurance with AIG Direct, and the recent news that AIG is on the verge of going under has me thinking about whether there's anything I should be doing to protect myself.

My current policy cost approx $500 for 6 months of coverage ending in a couple of months. I could pay a $50 early termination fee to move to another company, but that would be essentially taking a $50 bet that my insurance will get taken down by an AIG failure in the next couple of months. Theoretically insurers should have adequate reserves that even if the company fails the claims can still be paid. And chances are that even if AIG fails I probably won't be filing a claim in the next couple of months anyway.

I should be okay if I just ride it out, and change to another insurance company at the end of my policy in December.

But if AIG does fail, that could raise insurance premiums, meaning I would be better off if I locked in another policy now. So I suppose my best bet is to buy new insurance now, effective at the end of my AIG policy.

Then again if AIG does pull through, they might end up being a really good deal because they might have to lower premiums to attract clients... the bargain hunter in me is lighting up... must resist the attraction
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Old 09-15-2008, 10:17 AM   #2
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You sound as though the $50 fee has something to do with your decision....... If that's correct, change your thinking. Place your insurance needs with a provider you feel most comfortable with for all reasons: cost, coverage, company integrity and stability, etc. Screw the $50.
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Old 09-15-2008, 10:24 AM   #3
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Also, this might be a good year to go on the month to month premium plans. About 20 years ago we had all our insurance thru a company that went tits up. We lost 11 months of premiums. I will be going that route until this stuff is settled. The 5% reduction for pay in advance is not enough to offset the risk for me.
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Old 09-15-2008, 01:05 PM   #4
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As I understand it, the problems with AIG are primarily at the holding company level, not at the insurancecompany level (especially the auto stuff). So I would probably sit tight and do nothing, since it is highly likely that the auto insurancecompany will be fine even if the holdco runs into trouble.
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Old 09-15-2008, 05:10 PM   #5
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Quote:
Originally Posted by free4now View Post
My current policy cost approx $500 for 6 months of coverage ending in a couple of months. I could pay a $50 early termination fee to move to another company, but that would be essentially taking a $50 bet that my insurance will get taken down by an AIG failure in the next couple of months.

man...never heard of an early termination fee for auto insurance. is that common? the term is only six months anyway! Do you pay the premium up front?........what happens if you just walk? I wouldn't base my decision on a 50.00 fee. A tiny delay in paying a claim could cost you more than $50.

My insurance is with the Gecko and I have no expectations of superior service if I need them, but the rates are good and the policy terms are flexible with no early termination fees.
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Old 09-15-2008, 07:18 PM   #6
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Quote:
Originally Posted by free4now View Post

Theoretically insurers should have adequate reserves that
even if the company fails the claims can still be paid.

Question ?

There is discussion about relaxing the rules to let AIG borrow from itself...
is the money in reserves [free4now is referring to] the pool of money AIG
might borrow to run its day to day operations ?


?
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Old 09-15-2008, 07:28 PM   #7
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Quote:
Originally Posted by jazz4cash View Post
My insurance is with the Gecko and I have no expectations of superior service if I need them, but the rates are good and the policy terms are flexible with no early termination fees.
FWIW, my wife got bopped a couple years ago in the minivan and we ran a property damage claim through GEICo. They did OK, with no more than the normal amount of hassle that goes with a claim.
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Old 09-15-2008, 07:31 PM   #8
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AIG credit rating just lowered a notch. That should do it for them unless the fed bails them out. And the fed says they won't.
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Old 09-15-2008, 07:42 PM   #9
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AIG credit rating just lowered a notch. That should do it for them unless the fed bails them out. And the fed says they won't.
The big rating to watch is the AM Best insurance strength rating. If that goes below A-, they are done. But I suspect that AM Best will be extremely reluctant to whack them that far if they can at all see a way to let them wiggle around for a while and get their house in order.
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Old 09-15-2008, 07:58 PM   #10
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The big rating to watch is the AM Best insurance strength rating. If that goes below A-, they are done. But I suspect that AM Best will be extremely reluctant to whack them that far if they can at all see a way to let them wiggle around for a while and get their house in order.
I hope somehow they survive. We need some stability and I'm afraid this thing croaking would suck a lot down with it.
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