PSA: Don't Forget to Review Your Home & Auto Insurance For Competitiveness

[Midpack]

I've posted on this topic several times, so apologies to those who remember the background.

As a loyal customer of big name insurance (42 years now) with 1 auto claim and ZERO home claims, I had become complacent and just assumed I was getting the best possible rates. I got a quote from another big name in 2012 and realized that I couldn't have been more wrong. I really let them have it back in Jan 2012, and they immediately gave me better rates than any other reputable insurer could match. I have gotten new quotes every year since to make sure they remain competitive, and probably always will. If big name ever gets out of line again, we'll drop them like a rock.

I was stupid or at least too trusting, please don't you be.

 

[sengsational]

In a Consumer Reports article, I remember they determined pricing practices in various insurance companies. Some of these companies were determined to have the practice you mention...raising existing customer's prices while giving new customers lower prices. As I recall, my insurance company, Amica, did not do that.

I requoted my insurance coverage a year or two ago, because Amica kept pushing up the insured amount on my house, well beyond what it would sell for or even what I figured the rebuild cost was. When the dust settled, no other insurance company was significantly cheaper, so I'm still with Amica. What I discovered in that exercise is that you can get Auto cheaper with company X, but X's homeowners and umbrella are more. Then Y has cheap homeowners but expensive auto. And if you don't get all your insurance from one company, then the good deals vanish.

Here's some reading on the topic. https://www.consumerreports.org/cro/homeowners-insurance/buying-guide.htm

 

[Midpack]

What I discovered in that exercise is that you can get Auto cheaper with company X, but X's homeowners and umbrella are more. Then Y has cheap homeowners but expensive auto. And if you don't get all your insurance from one company, then the good deals vanish.

+1. Exactly what I've found, and I get several new home and auto quotes annually. Other big name companies match our auto, but none match our homeowners, and (of course) none are better combined either.

 

[AtlasShrugged]

In a Consumer Reports article, I remember they determined pricing practices in various insurance companies. Some of these companies were determined to have the practice you mention...raising existing customer's prices while giving new customers lower prices. As I recall, my insurance company, Amica, did not do that.

I requoted my insurance coverage a year or two ago, because Amica kept pushing up the insured amount on my house, well beyond what it would sell for or even what I figured the rebuild cost was. When the dust settled, no other insurance company was significantly cheaper, so I'm still with Amica. What I discovered in that exercise is that you can get Auto cheaper with company X, but X's homeowners and umbrella are more. Then Y has cheap homeowners but expensive auto. And if you don't get all your insurance from one company, then the good deals vanish.

Here's some reading on the topic. https://www.consumerreports.org/cro/homeowners-insurance/buying-guide.htm

I completely agree with you. I’m with AMICA as well and my experience mirrors yours. I got competitive quotes the last several years and found the same things.

 

[braumeister]

I think it must be highly variable around the country.
I have never found a better deal on anything from any insurer compared to what I already had.
Maybe 49 years with the same company sometimes carries an advantage?

 

[Midpack]

I think it must be highly variable around the country.
I have never found a better deal on anything from any insurer compared to what I already had.
Maybe 49 years with the same company sometimes carries an advantage?

I assumed it would, but it didn't for us. We were at 36 years with one claim when we realized...

 

[MRG]

I think it must be highly variable around the country.
I have never found a better deal on anything from any insurer compared to what I already had.
Maybe 49 years with the same company sometimes carries an advantage?

Or not?

I learned our agent of 20+ years screwed us over so no one would take us! How? He failed to mention on a couple of accident claims I was not at fault! We discovered when we started shopping around and other insurance companies would say if it wasn't for those accidents.

I has to go around him to the adjuster to fight Nexus Lexus.

 

[Bamaman]

In our state, you just about have to bundle policies to get homeowners insurance. Otherwise, auto rates may be 25%-30% more.

When changing insurance companies, you may start with low premiums. But premiums increase every year in spite of a good claims history. This is especially prevalent on replacement coverage on homeowners. Look up in 3 years and you might be paying premiums on 150% of what the house is worth. If you had a total loss and chose not to rebuild, you might get paid 75% of what your paying premiums on. That is not right.

In reading on the internet, I see State Farm, Allstate, GEICO and Progressive combined have half the insurance business in the U.S. Wow!

I too am looking to lower my largest expense in retirement, and will be getting quotes this week.

 

[Golden sunsets]

With regard to the automatic increases on coverage on the home, we periodically have our insurer recalculate cost to replace and correspondingly reduce coverage, which in turn reduces premiums.


Sent from my iPad using Early Retirement Forum

 

[Midpack]

In our state, you just about have to bundle policies to get homeowners insurance. Otherwise, auto rates may be 25%-30% more.

When changing insurance companies, you may start with low premiums. But premiums increase every year in spite of a good claims history. This is especially prevalent on replacement coverage on homeowners. Look up in 3 years and you might be paying premiums on 150% of what the house is worth. If you had a total loss and chose not to rebuild, you might get paid 75% of what your paying premiums on. That is not right.

In reading on the internet, I see State Farm, Allstate, GEICO and Progressive combined have half the insurance business in the U.S. Wow!

I too am looking to lower my largest expense in retirement, and will be getting quotes this week.

With regard to the automatic increases on coverage on the home, we periodically have our insurer recalculate cost to replace and correspondingly reduce coverage, which in turn reduces premiums.


Sent from my iPad using Early Retirement Forum

Thanks, good info.

 

[brucethebroker]

I think it must be highly variable around the country.
I have never found a better deal on anything from any insurer compared to what I already had.
Maybe 49 years with the same company sometimes carries an advantage?

+1.
Having an agent I trust (with a track record) to have my claims paid is very important.

You have to be careful changing horses (companies) at older ages. Your existing company will most likely be more forgiving of future auto accidents that a company that has only insured you a year or so. A good agent will fight
the company to keep a loyal customer of 20 plus years, also.

 

[VanWinkle]

+1.
Having an agent I trust (with a track record) to have my claims paid is very important.

You have to be careful changing horses (companies) at older ages. Your existing company will most likely be more forgiving of future auto accidents that a company that has only insured you a year or so. A good agent will fight
the company to keep a loyal customer of 20 plus years, also.

Every company will drop you if you have a claims severity problem. Your agent will be a willing accomplice at some point to keep his loss percentages low. I feel this "they will not drop me cause I've been there forever" is a fear tactic to keep people from shopping rates. I changed from "Big Insurance" to online coverage 2 years ago. Reduced premiums 45% and have not had any increases to this point. I also never turn in claims, so I appear to be a great risk.

 

[skipro33]

What region of the country you live in may affect your outcome in searching for cheaper insurance in more ways than you might imagine. I live in rural California. As you probably know, there's a lot of fire danger if you live in the more rural areas out here. I've had talks with neighbors who told me that just soliciting for quotes from other insurance companies caused his own to drop him. Then things got tough when he couldn't find any insurance company to write him a policy. Their advice has been; if you got insurance, keep it, don't ask for a recalc, don't seek quotes for lower rates, do everything you can to stay off their radar or you may find yourself without coverage.

 

[CaptTom]

Thanks for the reminder!

If you don't believe this, just look at any insurance company ad. They all say "customers who switched to us saved on average xx%."

Think about it. Customers who switched. Since they all make the same claim, it would appear it's not which company you switched from or to. It's the fact that you switched at all!

 

[brucethebroker]

Every company will drop you if you have a claims severity problem. Your agent will be a willing accomplice at some point to keep his loss percentages low. I feel this "they will not drop me cause I've been there forever" is a fear tactic to keep people from shopping rates.

Perhaps you have never been an insurance agent? The agents I knew when I was licensed, would move heaven and earth to protect their clients. And, just try to keep your auto insurance at age 65 or so with an accident during your first year with a new company. The companies I worked with gave major consideration when a loyal 10 plus year customer had an accident. Many "risk" factors go into the consideration of a cancellation and your agent can be your best friend in arguments with underwriting and claims.

 

[VanWinkle]

Perhaps you have never been an insurance agent? The agents I knew when I was licensed, would move heaven and earth to protect their clients. And, just try to keep your auto insurance at age 65 or so with an accident during your first year with a new company. The companies I worked with gave major consideration when a loyal 10 plus year customer had an accident. Many "risk" factors go into the consideration of a cancellation and your agent can be your best friend in arguments with underwriting and claims.

I have been a licensed agent in the past, but actually retired from the claims department of a large Insurance company. I saw how the underwriting dept handled loyal customers who paid increasing premiums with no claims history.

I am glad you found agents that would go to bat for their customers, but the underwriting dept has the final say. I have found them to be less than compassionate.

This is about business and saving valuable premium dollars. If you have a history of regular claims, I would also suggest sticking with your long held company as long as they will have you.

VW

 

[bobandsherry]

+1.
Having an agent I trust (with a track record) to have my claims paid is very important.

Sounds like you must have a large number of claims. In my entire adult life I've had two auto claims (one due to my daughter) and one one my home. Three claims in almost 40 years. And each of those were processed and paid very expediently, and I think very fairly, without any need for agent intervention. I think you may be giving your agent more credit than due.

 

[rodi]

I'm a big believer in shopping rates. It works great if you do not fall into any risk categories. We have a canyon behind the homes on the other side of our street that is designated "fire zone". This pretty much means we cannot change carriers because only 3 companies will write policies... and 2 are outrageous in pricing.

I had Amica - I loved them. But they won't insure us. I had AAA and they found reasons to non-renew us. It took me almost a month of calling different companies and having underwriters evaluate before I found that Farmers would cover us for 1/2 of what the only other companies willing to cover us would charge.

 

[VanWinkle]

I'm a big believer in shopping rates. It works great if you do not fall into any risk categories. We have a canyon behind the homes on the other side of our street that is designated "fire zone". This pretty much means we cannot change carriers because only 3 companies will write policies... and 2 are outrageous in pricing.

I had Amica - I loved them. But they won't insure us. I had AAA and they found reasons to non-renew us. It took me almost a month of calling different companies and having underwriters evaluate before I found that Farmers would cover us for 1/2 of what the only other companies willing to cover us would charge.

Congrats on the savings from "shopping around".