Auto & Home Insurance Annual Increases?

[Midpack]

Our policies restart every Jan.


Our auto went up 9.6% to $865, though we replaced one car with a new one, so the increase is probably understandable.


Our home insurance went up 7.1% to $1009. Google search suggests that's not unusual, with weather/hurricanes accounting for the rates. Most of the stories I read were higher increases than we're seeing.


I may challenge my insurance carrier, but probably not.


Just seeing what others may have experienced, and as a follow up prod to other members stemming from my PSA this time last year...

 

[arky]

I switched last year in April after ~15% increase for the house. Went with MetLife. Didn't even know they did house/car insurance. Saved ~40% on the house and about 15% on two cars. No claims, so no info in that regard. We'll see if they try to bump me up in April.

 

[Redbugdave]

Last year I got quotes from 3 other insurers to make sure what I am paying was in line with the market. It was...but I think it is good practice to double check now and again with other companies. Each year you get, "insurance premium creep" and you don't know if it's real or you are being skinned.

 

[KM]

We switched carriers in Aug 2011 for our house and car. We also picked up a Liability policy, improved our overall coverage amount.....and reduced our total cost by about $800.

August 2012 we were renewed with a 10.4% increase in auto and 7.4% increase on the house. I was bit surprised.....but now it sounds like that is in line with others.

My plan is to see what happens in 2013. It may pay to shop around every 2-3 years....something I find to be a real pita, although I dont know why. It's not that complicated and I do think new customers get better rates....

 

[aaronc879]

My condo insurance went up 7% even though the value went down 2.5%. My car insurance went down 2% which seems right since it's going down in value.

 

[Andre1969]

Don't know how the auto insurance is going to play out, but homeowner's insurance jacked up a bit, from $829 for 2012 to $912 for 2013. Part of the increase was because I added earthquake insurance. I also upped the liability limits on my auto insurance earlier in the year, and I think they upped them on the homeowner's, as well.

I bought a new truck in September, and the insurance to cover it from 9/23/12 to whenever it renews in March 2013, was $281. So, I'm guessing the truck will come out to about $560-570 per year. And, I didn't get rid of any vehicles, so there's nothing to offset that.

 

[bbbamI]

Homeowner's policy increased about 8%. Part of that was from raising the coverage on the house. (Their decision, not mine)

 

[travelover]

I've found that I need to shop my home/ auto/ umbrella insurance every couple of years. I think that they give you low rates for a while and hope you will be complacent when they start to jack up the rates later.

 

[misanman]

I have an acquaintance that owns a independent insurance agency. She's telling me that rates are up quite a bit this year in general and she's spending a lot of time answering calls from customers who want to know why their insurance has gone up. She says that this happens from time to time when claims experience exceeds projections. No disasters in our neck of the woods but I suppose we are all affected regardless.

 

[obgyn65]

+8% for condo insurance.

 

[JOHNNIE36]

Both home and auto policies renew at the beginning of the year so I am current with rate increases beginning 1-1-13.
Home owners policy went up 6.6%. Coverage is with Tower Hill.
Auto policy went up 6.6%. Coverage is with 21st Century

Funny these increases would be identical on a percentage basis.

 

[Too young to work]

Knowing someone who worked in insurance, I have a lot of inside info. Those rate increases are complained about all the time. When you call there is almost nothing an agent can do aside from helping to look for discounts you should have been getting all along. Rates are based on history in your area, your personal history, and your credit score.

The best thing you can do as someone already said is call and get quotes. Many companies will lure you in with low rates and then raise them after just 2 or 3 years. Some don't, but often customer loyalty does not pay. People think staying with a company for many years earns them credit. While there may be a "loyalty credit" it does not counteract the new customer rates. However staying with companies with only a year or two and hopping to the next also effects you're rates negatively. They have administrative costs they need to offset, and if you bounce around a lot, you're not a valuable customer.

Also! Are you sure you don't have any recent tickets, younger people coming of age for driving? Also, as you get older you become more of a statistical risk, so turning 60 or 70 (not those specific ages) will make your rate higher. Did you have discounts that may have dropped off after so many years? Defensive driving? New car with not as many safety features? A new car in general?

Keep in mind these companies are making up for big losses with hurricane sandy. If you're in NJ, your rate will likely be much higher. Even if not, it can still impact your rate as those companies need to come up with cash for everything they had to put out for claims with Sandy.

All insurance companies are not equal, make sure you are getting the EXACT same insurance. Deductibles, full or limited tort, and stacking or non stacking policies, all of which isn't necessarily displayed on your declarations page. Keep in mind disappearing deductibles that you may have credit for with your current policy that you may not get with your new company.

When you call for new insurance, make sure you aren't getting any credits as we were offered like a "newly wed" discount that only lasted for 2 years after starting the policy.

Credit scores have a bigger impact than you might think. If you don't ever use credit and have an average or below average score, your rates can be effected by as much as 10-80% which is incredible! No credit score gives you a rating as someone with a very low score.

 

[scrabbler1]

As someone who worked in the actuarial division at my old company for 23 years (specializing in personal auto), I can tell you that there are many, many variables which determine the behavior of insurance rates. These include where you live, the limits and deductibles for each coverage on your policy, your driving record, and the type of car you drive, to name a bunch. You may see the rates on some coverages rise while on other coverages fall, so in the aggregate your total rate may rise or fall.

About Hurricane Sandy, and storms in general - insurance companies have a loss smoothing algorithm which boosts the rate for applicable coverages (for personal auto, Comprehensive) by a few percent in the "lean" years (i.e. years with little or no wind and water losses) in return for not raising rates through the roof in the years which have big storms. This keeps rates much more stable than they would be without such a smoothing algorithm. This can occur both on a statewide and local basis although the local basis is a more complex algorithm.

But what causes rates for each coverage to change in either direction is the ratio of projected losses to projected premiums. If it is greater than 1, then rates go up. Otherwise, they go down. And yes, they can go down.

 

[Midpack]

Knowing someone who worked in insurance, I have a lot of inside info. Those rate increases are complained about all the time. When you call there is almost nothing an agent can do aside from helping to look for discounts you should have been getting all along.

As someone who worked in the actuarial division at my old company for 23 years (specializing in personal auto), I can tell you that there are many, many variables which determine the behavior of insurance rates.

Then maybe you could explain to me and the others how my auto insurance went from $1,970 in 2011 to $789 in 2012 without any change in coverage/terms, cars, driving record or anything else after I threatened to leave Liberty Mutual. Having been a customer for 30 years with 1 accident (DW) in all that time, I never dreamed they'd take advantage of me, until I got competitive quotes from other insurance providers. Needless to say I was confused, and then angry.

So how does that happen?

That'll never happen to me again on any service I pay for. Fool me once shame on you, fool me twice shame on me...

 

[scrabbler1]

Midpack, the main part of an insurance rate from an actuarial perspective is called the "loss cost," the portion of an insurance rate used to pay for future losses. This is the part I worked on in my (former) career.

Insurance Definition: LOSS COSTS | CompuQuotes.com

The rest of an insurance rate includes profit, overhead, and other expenses unrelated to paying out losses. Sounds like your company was inflating this part before rolling it back. I'm surely not defending this practice.

I am also assuming that the one chargeable accident was not recent, as in the last 5 years or so, because a chargeable accident eventually gets dropped from your driving record for rating purposes so your premium would then drop.

 

[Packman]

Then maybe you could explain to me and the others how my auto insurance went from $1,970 in 2011 to $789 in 2012 without any change in coverage/terms, cars, driving record or anything else after I threatened to leave Liberty Mutual. Having been a customer for 30 years with 1 accident (DW) in all that time, I never dreamed they'd take advantage of me, until I got competitive quotes from other insurance providers. Needless to say I was confused, and then angry.

So how does that happen?

That'll never happen to me again on any service I pay for. Fool me once shame on you, fool me twice shame on me...

Midpack, I assume you changed insurance companies in 2012 to cut your premiums by more than half?

Every two or three years, I get competitive prices from other carriers. And I almost always find lower priced options. I was with State Farm for many years, but over the last decade, I've changed companies 4 times. IMO, it does not pay to stay with the same insurance company for very long anymore.

 

[Midpack]

Midpack, I assume you changed insurance companies in 2012 to cut your premiums by more than half?

Nope, same carrier. I posted the story about a year ago, hoping to encourage others to check their situations. Most but not all already had, but some other members benefitted, though I doubt anyone was being overcharged like we were.

I got quotes from USAA & Geico that were about half what I was paying Liberty Mutual. So I called Liberty Mutual and told them I was leaving if my rates were not cut in half (on home & auto BTW). I never told them what my exact quotes were from the others, but Liberty Mutual came through with better rates on home & auto combined, so I stayed with them. Yes, I was angry and considered leaving LM on principle, but I stayed. I will get get competitive quotes every year or two from now on (not just insurance) and never get stung again. If LM gets out of line, they're toast, whatever loyalty we might have had is gone...

 

[Too young to work]

LM was the company with the newly wed discount. Seemed to save us big, but our price would go up significantly after 2 years. We realized this after signing up but before canceling the old insurance. Then we also realized that even though we explicitly asked for full tort, our paperwork that came was limited tort. When calling to ask, they said the full tort would be another several hundred dollars a year. Seemed like a scam to me. We backed away quickly and stayed with the old company briefly until finding another insurer.

Keep in mind you can only legally have one insurance company at a time, per coverage that is. In other words, you can't have two home policies on the same home, or two car policies on the same car. This allowed us to drop LM without hassle as we didn't cancel the old policy at that point.

Be wary, read your documents to make sure you have the coverage you expect, as most companies are not your friend. For instance, most policies do not cover anything in basements (unless it is a walkout basement) except for things essential to your house running. These would be the hot water heater, furnace, air handler, etc. Not included would be washer and dryer, any personal possessions, carpet, etc.

 

[Mulligan]

Nope, same carrier. I posted the story about a year ago, hoping to encourage others to check their situations. Most but not all already had, but some other members benefitted, though I doubt anyone was being overcharged like we were.

I got quotes from USAA & Geico that were about half what I was paying Liberty Mutual. So I called Liberty Mutual and told them I was leaving if my rates were not cut in half (on home & auto BTW). I never told them what my exact quotes were from the others, but Liberty Mutual came through with better rates on home & auto combined, so I stayed with them. Yes, I was angry and considered leaving LM on principle, but I stayed. I will get get competitive quotes every year or two from now on (not just insurance) and never get stung again. If LM gets out of line, they're toast, whatever loyalty we might have had is gone...

You are a nicer person than I am as I didn't give them a chance. That thread got me off my rear and I got my premium lowered to $600 from $1100, by switching to Hartford. Oddly enough,however, I had to stay with same company on auto as no one could come near it. That pesky little $500 rear ending accident I had a couple years ago, will keep me from looking for another year.

 

[Midpack]

You are a nicer person than I am as I didn't give them a chance. That thread got me off my rear and I got my premium lowered to $600 from $1100, by switching to Hartford. Oddly enough,however, I had to stay with same company on auto as no one could come near it. That pesky little $500 rear ending accident I had a couple years ago, will keep me from looking for another year.

Not really a matter of nice, if Liberty Mutual hadn't provided a lower combined rate on home & auto than anyone else, I would not have stayed with them. DW did have a significant accident more than 5 years ago (our only claim in 30 yrs), and they did take excellent care of us, that coupled with the lower rate made us give them a second chance - but there won't be a third chance if it happens again. The premium didn't seem to increase, though evidently it did slowly enough that we didn't realize it (frog in slowly heated water). Live and learn. I'm glad it opened the eyes of a few other members before they got as far afield as we did...that was the purpose of the thread a year ago. Sharing and learning from each other is probably the most appealing feature of this forum IMO...

 

[BellBarbara]

I called into our agency Metlife, and complained about our car insurance rates. The person actually said to me "I will resubmit it to underwriting and see if they will rewrite the policy at current rates". So in other words, we were paying a higher rate because we were existing customers! They came back in one day with $400 less. So don't be afraid to ask them to "resubmit" to underwriting.

We are going to price shop again next year.

 

[Mulligan]

I called into our agency Metlife, and complained about our car insurance rates. The person actually said to me "I will resubmit it to underwriting and see if they will rewrite the policy at current rates". So in other words, we were paying a higher rate because we were existing customers! They came back in one day with $400 less. So don't be afraid to ask them to "resubmit" to underwriting.

We are going to price shop again next year.

Don't you love those cryptic phrases they give you, to explain what they are doing? Your being generous in your phrasing. I call it screwing the loyal customers. Somehow there has become a disconnect between customer and company. Customer assumes loyalty means something. Company sees it as a lazy consumer to be taken advantage of. I have certainly learned my lesson this past year and have become a mercenary customer.