This post is a follow-on to JerryD's thread entitled "A penny saved is a penny earned"
We expect to retire within the next 2 or 3 years. Therefore, for the last year we have been learning to live more frugally so that we can live within our means during retirement. It's amazing how much money you can save here and there if you really try! But one thing really made me angry-- our auto insurance.
We have been with the same brand-name insurance company for more than 30 years. The rates kept creeping up and up a little each year until we were paying $230/mo for 2 cars. Twice we complained to our agent and he said that he had given us all the discounts he could so there was no way he could lower our premiums.
Well, last year I decided to look into the insurance situation more carefully. I really didn't want a super-cheapo, fly-by-night insurance company but I wanted to compare rates among reputable insurers. Another major insurance company offered us a policy for $133/mo for THE SAME COVERAGE, SAME DEDUCTIBLES!! We had been wasting $100/mo for nothing! It turns out that we didn't like this new company so just now I shopped around again. Now I found a policy for $118/mo! This is not a company that I know, but it is one recommended by consumer advocate Clark Howard so I'm willing to try it.
The point is that there is a new business model in the US. You are no longer rewarded for being a loyal customer. If you stay with any company for a number of years they figure that you are a sucker who is too lazy or too stupid to shop around so they raise your rates. They only give good discounts to new customers so they can attract new business. Apparently, that is how executives are evaluated these days-- new business. We are now in the process of changing our phone/internet/cable provider EVERY YEAR because that's the only way we can keep getting the 50% off "introductory rate". And you know as well as I do that the ISP providers are still making money at the 50% off rate, so what is the deal here? Changing ISP providers every year and dropping our cable has saved us another $150/mo (Netflix and Amazon streaming are better than cable, anyway). And many of you have said how important it is to shop around and compare rates for health insurance EVERY YEAR. It's a hassle, but it's necessary.
I just feel like an idiot for having stayed for so many years with companies who just disrespected our loyalty and used it as an excuse to gouge us. I learned my lesson. From now on, I'm going to shop around for everything possible every year-- gas, electric, insurance, phone, internet-- everything. It's an inconvenience but it's better than being schnookered.
I had a similar experience. My home, auto and umbrella coverage is all with a local independent agent. Since I had been with them for many (30-ish) years, and was happy with their performance, I let them know that I was shopping. That's when they "realized" that one of their other companies might be a better match for me. I ended up staying with my agent but changing insurance companies, at a savings of about $400 per year. Still, it bothered me that they didn't find that without my prodding and, as a result, cost me money over all those years. Kinda left a bad taste in my mouth. That was 3 years ago and I'm probably going to shop rates again before my next term expires with them.
TV and internet are about to get shopped again soon. A couple years ago I switched from satellite to cable and received more channels for less money. We stayed with them when the promotion rates ran out but now they've come up with a substantial price increase. Might be time to take advantage of one of these "we want you back" offers from the satellite company.
Troutbum, I'm glad that you are saving $400/yr on your car insurance. But don't stop there. I'm willing to bet you $1 that if you shop around on the internet at different insurance companies or even contact a different independent agent you could save several hundred dollars more per year. I'm learning that the more effort I put in to such things the more money I save.
I agree but also try hard to separate the best price from the best value. When I priced insurance the last time there was actually a company that offered a better price than the one I went with. I chose to stick with my familiar agent because they are local, as opposed to an established online provider, and I just liked the idea that I could fall back on a real person instead of an e-person.
Shortly after that my vehicle was hit from behind by someone who left the scene of the accident. I was disappointed when my local agent basically left me to deal with it. I did the necessary police reports and was able to identify the person who hit me. Still, two months later I received a letter from the other driver's insurance company stating that they would not pay due to lack of proof. I basically just wrote it off as a loss.
Another two months down the road and I received a check from my company for the full amount of the damage. Where I had failed to collect, they followed through and were able to recover the cost of repairs. I really don't know if the same would have happened if I had been dealing with an online insurance company. If so, they would have been the better value. If not, it paid for me to pay the little extra.
I agree that good customer service and fair claim handling are even more important than lower premiums. However, it's hard to know which insurance companies are really good about those things. So I called the body shop that we have used from time to time to ask if there are any insurance companies that, in his experience, are particularly good or bad in terms of prompt appraisals and fair settlements. That plus looking up Consumer Reports, JD Powers and Clark Howard resulted in 3 or 4 companies in our state that are considered "good". So those are the ones I got quotes from.
something along the way happened to "just being nice" for loyalty.
We may be with that same auto insurance (and homeowners) - from 1974 auto, from 1984 homeowners (and umbrella liability as well). Getting a sick feeling in my stomach. At age 70, the prospect is "no fun."
Had similar experiences recently with both RV and property insurance.
Got a newer RV which we let sit at a resort and never tow any more. Since it was worth quite a bit more than the previous couple used RV's we owned and quit insuring and there have been several close calls on tornadoes in the area, we got a policy with probably the largest company dedicated to "toys" out of MI. The next year the premium jumped way up. I complained to the resort owner who we know very well. He put me onto his independent insurer in the next state from where we have the RV. Bottom line, we got the new insurer to conceded that we didn't need all of the insurance that would be needed if we towed it. That along with several other tweaks in the coverage and we got the premium down to a much more manageable amount.
The house insurance is quite seriously expensive in our area. When we moved out a large Midwest city, I swear that it doubled. To the best I can figure it is due to the tornadoes that go sweeping through and around our state just about every season. When I first started to get alarmed at the premium, I went after the large insurer we have used here and elsewhere for decades. After some hassle, our agent reached out to 3 builders that he insured and came back with the cost/sqft to replace a house like ours. With that value we were at least fairly sure what it would cost to replace the house after a major loss.
The next year I went ballistic when the premium went over half what I paid for my first new car. This one was much harder. Seems that even the insurer thought we might be getting itchy feet and they offered us a nice but inadequate reduction if we switched our deductible to .5% of the replacement value of the house. Even though this deductible was substantially more than we had, we figured that in a few years we would save the extra out-of-pocket with reduced premiums, afterall we have never had any claim for a total house loss.
Then the agent finally agreed to come out and look at our house (again?). He sent us a report listing the features. It's amazing what errors he made when he just walked around by himself since I had another visitor when he just showed up. After we fixed those errors and got a new house value the insured value was down by $10,000's. This along with the higher deductible, the premium is down over $300/year.
I won't go into it in detail, but the reduced insured value did NOT come up with a similar premium reduction to the higher insured value. Even after fighting it out through the state regulator, the insurer stood its ground and that was the best deal we could get. Seems that the premium charged for different insured values doesn't have to make any logical sense! :-((((
PS: An aside is that the independent insurer of our RV was given an opportunity to bid our entire house and car package in addition to the RV. Although he was quite responsive, his best deal did not beat the major insurer that we have. So, check the numbers before making the move.
Insurance is a business. I'm really not sure what you expected from a big corporation. That's what 'free market economics' is all about, after all. This reminds me of my MIL banking at Wells Fargo. All fine and good, we bank there ourselves -- but she also had her investments there, which isn't such a great idea. She felt because she "knew" the tellers and operations officers, they were 'looking out for her.'
Well, of course they aren't and weren't. The investment side is entirely separate from the checking/savings side. It's no different than if she had her portfolio at Edward Jones or Fidelity. She liked her "all in one" statements, never realizing that linking those two lines of business together was costing her $50/month for her premium checking account (which she very definitely did not need) in addition to fees on her portfolio.
I worked in insurance for almost two decades. I pick companies based on good customer service records. My auto insurer, an on-line company, has given us outstanding service on two major accidents. Neither were our fault, and in one case an $1500 bill didn't show up in my mail until over 18 months after the accident! It had gone to a collection agency even though I never received the original bill. The phone rep I talked to said, "Oh, no problem; I'll just re-open the case. Send that bill to us and we'll take care of it for you."
And they did. Everyone I've dealt with has been helpful, efficient, cheerful, and a real pleasure to deal with (unlike my previous auto insurer). Sometimes it's not so much how much you pay, as what VALUE are you receiving when you need to file a claim.
jkom, you seem to be giving two conflicting messages here. In one case, you say that your MIL is naive for thinking that "... the tellers and operations officers, they were 'looking out for her.' Well, of course they aren't and weren't.,," Then you go on to say that your auto insurance company is, essentially, looking out for you. Very confusing.
Yes, good customer service and prompt handling of claims is absolutely required of insurance companies. That is the reason they exist. And one must expect to pay somewhat more for experienced, personalized services like that. But how much more? And where does year-after-year customer loyalty fit into their business plan? I'm afraid that I see an awful lot of price gouging and promotions to lure in new customers and very little emphasis on developing a fair and consistent profit. So we must all shop around every year for everything or risk being schnookered!
It is amazing to me how a company that cannot find the address to send the original bill just turns over to a collection agency which is quite able to find the address for collection. Go figure.
Had a relative that was old and in and out of hospitals in our absence. We heard that a doctor was upset about not being paid even though there were several insurance coverages that more than covered any charges. We took the time to call the doctor's office to inform them that we were coming from afar in 2 weeks and would clear it all up.
They sent it to collection!!!! I took great pleasure in calling them again to state my satisfaction that this stupidity probably cost them a large amount of the bill due to the bill collector's fee(s) when they could have had it all when we arrived. :-))))
I hear you Chrysalis, read an article about the insurance "scams" a while back in USA Today, not long after switching carriers for the 2nd or 3rd time in 3-4 years. Even the AARP insurance co. jacked up our rates after 2 years, bye bye. You have to do due diligence with these companies nowadays. Sad, very sad.
I am happy to report that after hours of getting online quotes and a lot of calling around, we increased our coverage for both our home and our autos, kept our deductibles the same, and our insurance premiums are now ONE HALF what they were a year ago. One half! For better coverage! I have not personally worked with this company before and I might live to regret this decision. But they are a Fortune 500 company that has been around for 95 years. They were recommended by both Clark Howard and JD Powers surveys. So I'm willing to give them a try. It really does pay to shop around.
LOL! I got my renewal notice today for the brand name company I am dropping. One year ago my premium was $775 for 6 months. In September it went up to $840. Today, the renewal premium is $909 for LESS coverage (we dropped roadside assistance and towing). No claims. No credit problems. Nothing. They just jack up the cost every period.
IDIOTS! I'm outta here!
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