Rate creep frustration!

[folivier]

Here in Louisiana we have high auto insurance rates. As an example I just bought a small car to tow behind the motorhome. Paid $3500 for it, basically a cheap throwaway just to run around in and tow. The cheap car will cost $100/year less than the 2011 Tahoe! which is newer, nicer, and worth far more and being a much larger and heavier vehicle could cause more damage in an accident. So in 2 years I will pay as much in insurance as I paid for the darn thing. My agent said because its a new "type" of vehicle for us is why it is costing so much. But he did admit that it probably won't ever go down. I can get cheaper insurance for it elsewhere but lose the multi-car discount.
But down here every other billboard and tv ad is attorneys begging you to sue if you've been in an accident. Oh yeah we also have drive-through daiquiri stands!

 

[jollystomper]

One of the benefits of raising kids is that, as they transition to being independent adults, the savings received far outweigh any rate creeps we have experienced.

Youngest just got their own car insurance, our rate fell 33%. No more college expenses = big savings. Grocery bill down 30%. Heating/cooling down 15%.

In some other areas, we have been fortunate. Property taxes are down 8% from their peak in 2012. Homeowners and Liability insurance has gone up 21% over the last 11 years, just about the rate of inflation.

 

[Amethyst]

Pretty much.

Most damage-type repairs to our home would run over $10K these days. Even minor fixes get quoted in the thousands, not hundreds as used to be the case. Labor is expensive.

But a deductible of $10K ? So, other than being lucky enough to have your house burn down, doesn't this mean you will pay for future claims out of pocket, as very few are ever over $10K ?

 

[jazz4cash]

Here in Louisiana we have high auto insurance rates. As an example I just bought a small car to tow behind the motorhome. Paid $3500 for it, basically a cheap throwaway just to run around in and tow. The cheap car will cost $100/year less than the 2011 Tahoe! which is newer, nicer, and worth far more and being a much larger and heavier vehicle could cause more damage in an accident. So in 2 years I will pay as much in insurance as I paid for the darn thing. My agent said because its a new "type" of vehicle for us is why it is costing so much. But he did admit that it probably won't ever go down. I can get cheaper insurance for it elsewhere but lose the multi-car discount.
But down here every other billboard and tv ad is attorneys begging you to sue if you've been in an accident. Oh yeah we also have drive-through daiquiri stands!

That bit about the rate being high because it's a new type of vehicle on your policy sounds like nonsense, esp considering you already have an RV! It kinda wrecks your strategy of getting a cheap limited use vehicle. Sometimes it's worthwhile to ask the insurance company what the rate will be before you acquire the vehicle. I admit I almost never do this but when we went out to acquire a car for our teen drivers we asked first and were advised to get one with 4 doors and 4 cylinders. How about a small pickup truck? Even better according to our agent plus it holds its value better than a car.
Lately we use the plug in driving monitors to qualify for a better rate (12-20% off of liability). First time they monitored for 3 mos but more recently it was 6 mos.

 

[ivinsfan]

Your rates seem high, and your insurance agents comments are lame. In essence he doesn't know and or care about how much this costs you. Time to look for a new insurer..

the old car is liability only?

 

[jkern]

Just a quick look at some of my essential expenses:

Highest expense: Property taxes - increase 4.1% last year, 11% over the last two years

2nd highest expense: Medical insurance - increased 35% last year

3rd highest expense: All utilities - 12% last year, 28% last two years

These are expense that I have to pay and have a much larger effect on my budget than other discretionary spending items that may not be going up.

 

[aja8888]

I just got re-quoted on my auto/home/umbrella policies. The best the new broker could do (keeping the same coverage and a top tier company), is about $288 less than the $3,772 I am about to be billed for from my current insurance carrier (Amica).

So I will just keep what I have and eat the increases as it appears all insurers in the area are raising rates at pretty much the same percentages. Plus, Amica kicks back nearly a 10% bonus check annually to policy holders.

I can't really drop collision/comp off the cars as they are less than 5 years old.

 

[pumpkineater]

shop your insurance.

+1

 

[John Galt III]

Our water and sewer rates are going up about 10% for third year in a row and they're going to change the formula since these rates are still not bringing the revenue the budgeted for. I need to look into getting a submeter before they revoke the option. Electricity kWh rate goes down every year thanks to the supplier choice program that nobody uses. I just got an offer to lock in at 4 pct less than I'm paying now plus $100 giftcard. Distribution rates go up anyway. What I don't get on the auto coverage is the favorable claims history doesn't seem to help much I know people that have totaled multiple cars. DUIs, fires, stolen etc etc. How can they afford coverage? I know the rest of us pay/ rant over.

The electric company here (PP and L) will be installing digital 'smart meters' on everyone's house. You can't refuse it. They send a wireless signal out to the company periodically to track your usage. I don't want a new meter since my old analog meter still works fine. And get this, they will be tacking on another $15 fee per month, that will last several years, to pay for these stupid unnecessary smart meters. Someone's making money on this, but not the homeowners, that's for sure. Currently they read the meter remotely somehow, anyway. No one walks around reading your meter every month, so they're not saving on labor. What bugs me is that you can't opt out. Supposedly you will be able to track your usage down to the hour, and figure out what appliance uses the most energy. I still don't want it.

 

[Crewer]

As Mr. Galt (or is it Ms. Rand?) said - "The electric company here (PP and L) will be installing digital 'smart meters' on everyone's house. You can't refuse it. They send a wireless signal out to the company periodically to track your usage. I don't want a new meter since my old analog meter still works fine. And get this, they will be tacking on another $15 fee per month, that will last several years, to pay for these stupid unnecessary smart meters. Someone's making money on this, but not the homeowners, that's for sure."
----------------------------
Those new meters could be getting ready for time of day rates. We also get a surcharge but it's to prop up the coal and nuclear plant that can't compete with the gas fueled plants. The local utility was all gung-ho for deregulation until it realized it couldn't compete.

On various insurances - we got a quote from a different company in exchange for coffee at the motorcycle show. It was lower than we were paying, though maybe not a good comparison in terms of deductibles etc. I contacted my insurance agent who was able to do something to reduce our overall bill while saying the other company was new at homeowners (actually they other co used a 3rd party and didn't underwrite itself) and he didn't think they were good at claims, etc.. Not that we've ever had one in 37+ years....

Our water and sewer used to be billed together quarterly. They now bill separately and monthly. I think the change is to obscure the higher costs - ie. so you don't see such a huge (and rising) bill.

But to me it seems we're generally captives on all this. There is no magic bullet - all the companies seem about the same in terms of costs.

 

[Ally]

We had been with the same auto and homeowner insurance for over 20 years. We rebid it this year and saved $1600. I wish I had done this years ago.

 

[meierlde]

Here in Louisiana we have high auto insurance rates. As an example I just bought a small car to tow behind the motorhome. Paid $3500 for it, basically a cheap throwaway just to run around in and tow. The cheap car will cost $100/year less than the 2011 Tahoe! which is newer, nicer, and worth far more and being a much larger and heavier vehicle could cause more damage in an accident. So in 2 years I will pay as much in insurance as I paid for the darn thing. My agent said because its a new "type" of vehicle for us is why it is costing so much. But he did admit that it probably won't ever go down. I can get cheaper insurance for it elsewhere but lose the multi-car discount.
But down here every other billboard and tv ad is attorneys begging you to sue if you've been in an accident. Oh yeah we also have drive-through daiquiri stands!

Did the insurance include collision and comprehensive? At the price paid perhaps just liability is needed. (unless you financed it). Look at the various coverages on your policy and see what each coverage costs.

 

[athena53]

It’s called price optimization. They raise the rate “because they can.” It was in the news a while back.

Price Optimization: Being A Loyal Auto Insurance Customer Can Cost You : NPR

It's not that simple. Auto insurance rates have to be approved by the state's Insurance Commissioner and backed by tons of statistics. I've dealt with these people and they're a lot more focused on any reasons the rates your company wants to use are too high. I've never had anyone question an assumption that might mean the prospective rates are too low.

That said- Company A might have better experience than Company B for people in your rating group (location, car type, age, credit rating, etc.) so shopping around can get you some savings. I see a fair amount of e-Rewards surveys asking about how often I shop for quotes on auto and homeowners insurance so I know companies are interested in who's likely to jump ship. It may be that they take less of an increase than they need for those insureds, knowing that the Insurance Commissioner's staff won't have a problem with that.

 

[Helen]

I just sent this to my insurance agent tonight. I expect a BS answer, but I thought I should at least give him a chance to explain. We are going to be out of the country for 3.5 months beginning in January and I don't want to mess with the auto payments so when we return I will shop around for better rates.

The two cars are a 2014 Subaru Outback and a 2015 Honda Fit. We have filed no claims and our credit ratings are very high. The only thing I can think that has changed is we both turned 60 this year.

+++++

Hello [insurance agent]

I was comparing our prior auto insurance premiums to our current auto insurance premiums.

January - July 2014 Subaru premium = $317.44

January - July 2018 Subaru premium = $417.70

$417.70 - $317.44 = $100.26 x 2 = $200.52 increase


January - July 2015 Honda Fit premium = $367.02

January - July 2018 Honda Fit premium = $474.26

$474.26 - $367.02 = $107.24 x 2 = $214.48 increase

Total: $200.52 + $214.48 = $415.00 increase from three years ago

Are my numbers correct and if so why have our rates increased on our auto insurance policies?

 

[kgtest]

I just sent this to my insurance agent tonight. I expect a BS answer, but I thought I should at least give him a chance to explain. We are going to be out of the country for 3.5 months beginning in January and I don't want to mess with the auto payments so when we return I will shop around for better rates.

The two cars are a 2014 Subaru Outback and a 2015 Honda Fit. We have filed no claims and our credit ratings are very high. The only thing I can think that has changed is we both turned 60 this year.

+++++

Hello [insurance agent]

I was comparing our prior auto insurance premiums to our current auto insurance premiums.

January - July 2014 Subaru premium = $317.44

January - July 2018 Subaru premium = $417.70

$417.70 - $317.44 = $100.26 x 2 = $200.52 increase


January - July 2015 Honda Fit premium = $367.02

January - July 2018 Honda Fit premium = $474.26

$474.26 - $367.02 = $107.24 x 2 = $214.48 increase

Total: $200.52 + $214.48 = $415.00 increase from three years ago

Are my numbers correct and if so why have our rates increased on our auto insurance policies?

I could see the agent blaming the increase on the weather, or the rise in claims in your zone, or maybe even the ole "well the cost of replacement parts and labor has risen", anything but greedy shareholders and board members. They raised our rates when they found out DW drove more than 10k miles annually. If I don't submit the annual mileage the rate automatically goes up. It's like the old trap when my wife asks "do I look good today?" waiiit a second...TRAP!

 

[misanman]

greedy shareholders

Wait a minute, I resemble that remark

 

[gayl]

My Geo Vera earthquake insurance jumped to 700 a year (65k deductible) so I added it to my USAA auto, home, umbrella, instruments policy (lowered deductible too) and it creeped up from 179m to 229m. Supposedly only added 400 yr so something else must have gone up too. But not the amounts your stating. My PGE balanced plan also jumped to 127 month but I'm building a hell of a credit so I guess I'll stop paying in spring again

 

[Perryinva]

The electric company here (PP and L) will be installing digital 'smart meters' on everyone's house. You can't refuse it. They send a wireless signal out to the company periodically to track your usage. I don't want a new meter since my old analog meter still works fine. And get this, they will be tacking on another $15 fee per month, that will last several years, to pay for these stupid unnecessary smart meters. Someone's making money on this, but not the homeowners, that's for sure. Currently they read the meter remotely somehow, anyway. No one walks around reading your meter every month, so they're not saving on labor. What bugs me is that you can't opt out. Supposedly you will be able to track your usage down to the hour, and figure out what appliance uses the most energy. I still don't want it.

No analog meter can be read remotely. They are today typically equipped with add on transmitters that allow a slow drive by for reading. Analog meters wear out and must be replaced periodically and 99% of the time, the homeowner isn’t even aware it happened except that they lost power for a short period. Smart meters will reduce operating costs by eliminating those meter reader employees and because they also allow instant determination of outages and problems that may be locally present. Much less time searching for the location of the problem. As mentioned, they will allow time of use rate billing. They also eliminate power theft which is more widespread than most people are aware. There are a significant number of benefits. Your claim that they are tacking on a $15/mo fee for several years specifically to pay for them is the first I’ve ever heard of that high a cost pass through. (In 30 seconds, a google search showed that the increase is $0.69/mo, gradually rising to peak of $6.50, then dropping again, through 2030. The search also showed they are required to change the meters because the state changed the requirements for meters, forcing them to do it. ). No utility can just raise its rates because of inefficient plants or deciding to install new equipment. All rate changes are proposed and approved by a state corporation commission who's sole purpose is to balance cost with reliable power. Electricity could be much less expensive if everyone didn’t insist on it 99.99% of the time. Historically, electric rates have risen nationwide less than any other utility. Most peoples bills have gone down adjusted for inflation thanks to more efficient appliances , computers & TVs, LED/CFL lighting and energy efficient homes. And why would you think any utility is in the business of saving customers money? It would be in any electric utilities best interest to have you use as much power as possible all the time. But instead, they operate on published guidlines to promote reduced usage to limit the need for new plants and generation. Is there ANY business where that is their charter? They provide a regulated service with a defined limited profit. No utility can make as much as they want because they are a regulated local monopoly. If you think you can make your own power cheaper, you are welcome to do it. Believe me, PP&L will not miss you. Your rant is silly.

 

[braumeister]

Your claim that they are tacking on a $15/mo fee for several years specifically to pay for them is the first I’ve ever heard of that high a cost pass through.

That surprised me too.
I have a friend who w*rked for a utility until he retired. He once told me that about ten years ago they got a pitch from a company making the newer smart meters and they looked into it carefully. Despite the personnel cost savings from fewer meter readers, they concluded that they would break even just about at the end of the projected useful life of the meters, so they passed on the deal. There was never any possibility of passing the cost on to the customers.

 

[scrabbler1]

Late to the dance but I'll join in now.


About car insurance, I've had some sharp increases this year, mainly in the costly coverages of BI/PD Liability and No-Fault. What hasn't happened over the last few years is a gradual decline in my Comp and Collision rates. With my previous car, those rates went down as my car aged, especially by its 10th year. Comp has been pretty low and stable, but Collision remains high. UM, the Uninsured Motorists coverage, has actually declined a little over the years.


My co-op maintenance charge has risen at about the inflation rate. This charge includes lots of things such as property taxes, interest on the co-op's mortgage, and general physical upkeep of the buildings and land.


My 3 main utilities, cable TV, Internet, and landline phone, have risen a lot over the years. They now cost me more than my auto+home insurance. Electric has been fairly stable.


But it's my health insurance which has been the most volatile over the years, especially once I ERed 9 years ago. I saw raises of 50% in the first 2 years, then I went underinsured for a few years until the ACA came around. I then paid more but not as much as I did when I first ERed. Now, the rates are rising a lot again. I will be paying the same for my HI as I will for my co-op maintenance charge.


My total monthly expenses, barring any unforeseen major health issue, will exceed $2,000 a month for the first time in 2018.

 

[jazz4cash]

That surprised me too.

I have a friend who w*rked for a utility until he retired. He once told me that about ten years ago they got a pitch from a company making the newer smart meters and they looked into it carefully. Despite the personnel cost savings from fewer meter readers, they concluded that they would break even just about at the end of the projected useful life of the meters, so they passed on the deal. There was never any possibility of passing the cost on to the customers.

We switched over to smart meters about 3 yrs ago and it seems like the local utility and PUC are not utilizing any new capabilities. At least the didn't stick us with a huge fee and no time of use billing so far.
I can't believe our utility doesn't run the new smart meters in a more consistent cycle. I assumed with the ease of collecting readings, the # of days/ billing cycle would be more consistent. Our billing cycles range from 28-33 days which is a huge difference for the extreme temperature months. They don't seem to be able to calculate a level payment plan either but I do my own.

 

[Amethyst]

You mean...you don't read the monthly notices about how well you're doing compared with "comparable efficient homes in your neighborhood"?

Complete with smiley and frowny faces, depending on whether you used more or fewer KW's? (What are we, six years old?)

And facetious suggestions of how you can save more KW's, which correspond to things you already do?

We switched over to smart meters about 3 yrs ago and it seems like the local utility and PUC are not utilizing any new capabilities.

 

[O2Bfree]

I had complained to our insurance agent about rate creep and recent jumps, especially on my 2002 Subaru, which was costing nearly $1000/year to insure, even though I haven't had any accidents or tickets and have less than 47,000 miles on it. Our agent referred me to a company rep, who essentially said 'sorry but that's the way it is'. We shopped around, and got the same insurance elsewhere for about half as much. Saved so much that we decided to put earthquake insurance back on our house. Wish we'd done it sooner.

I suppose there's a formula actuaries use to determine the profitability of raising rates until customers bail vs. keeping rates down to retain customers.

 

[misanman]

We switched over to smart meters a couple of years ago. It was optional but the power company charges the folks who didn't switch an additional fee. I don't remember the monthly amount but it might have been $15.

 

[jazz4cash]

You mean...you don't read the monthly notices about how well you're doing compared with "comparable efficient homes in your neighborhood"?

Complete with smiley and frowny faces, depending on whether you used more or fewer KW's? (What are we, six years old?)

And facetious suggestions of how you can save more KW's, which correspond to things you already do?

Ha! I do look at those and do see the inconsistencies in the report. We're all natural gas but get compared to homes that heat with electricity. The 3rd party that prepares those reports is a public company that gets paid through the conservation surcharge we all pay. Think they'll credit me for postage if I opt out of snail mail notices?