Posted on 11/11/2012 7:01:31 PM PST by RKBA Democrat
If you have been with your auto insurer for several years, your faithfulness might be costing you a bundle. That's the conclusion of a new report from the Texas Office of Public Insurance Counsel, which represents consumer interests. The longer customers stay with a company, the more likely they are to pay more than they need to, said the agency, which looked at pricing and other data from large auto insurers.
The analysis found that the insurers' risk of loss is less the longer you stay with the company, meaning you become more profitable to the company the longer you stay around. While the savings will vary from person to person, long-term customers are likely to be paying too much.
The report was meant to be a siren call to shop around for home and auto policies. Not only might consumers be paying their own insurer more, but they could be missing out because other companies often aggressively price new policies as "loss leaders"—selling them at a loss or only a small profit—to draw in new customers, the report found.
(Excerpt) Read more at online.wsj.com ...
GEICO has fair prices, and I had them years ago. Others became a better deal. I’d try Erie, Auto-owners and Elephant.
Wow! Thanks for the great links. That’s very helpful!
I am the child of a veteran, however my father is deceased. I’ll have to check into whether that makes a difference. I do have proof of his service.
Thank you for that tip, as well. FReepers are so helpful.
Wait until you have a claim. And then wait, and wait, and wait, and wait.
Pinging you for later when it’s convenient. I thank you for your kind offer of help. :)
Nice to have that confirmed...
Every now and then, I’m tempted to switch...we have had no real need to file a claim, fortunately over the years...we’re very good customers of USAA...
Maybe I should call them just to remind them!
Au contraire....
The few claims we’ve had were handled both professionally and expeditiously. Could not have been better.
I hear it does happen though....but never has to us....
OK.
So, if you are adding a new driver to existing policy. One step to lower premiums is to carry liability limits (Bodily injury (BI), and property damage liability(PD)) ABOVE the state minimum requirements. Most people unknowingly do - simply because their agent automatically selects that for them. HOWEVER, many people carry low BI/PD either because it will give them lower rates//or they just assume it will. The “average” decent level of liability coverage to carry is 100,000 per person for bodily injury/
300,000 per accident for bodily injury and
50,000 per accident for property damage.
Now, that of course is something a consumer can adjust up or down. I would never suggest a person carry less than that, and I personally carry much more. I would suggest a higher PD limit than the above example if adding a teen.
The reason that rates can be lower if you carry BETTER limits in coverage, is simply that it’s an indicator of how responsible you may be. Even if the rate is not lower, it may be only a little higher to carry better coverage and it is worth it.
Specifics that can help if adding a young person: (without knowing which state you live in)
A four door sedan is almost always cheaper to insure the young person on. Lets say you have two cars, and the youth will actually be driving the two door cute car, and you are in the sedan - just tell your agent that you will be having your youth drive the sedan, and you use the two door. Generally, any driver listed on your policy is covered on any car listed in your policy. So, you are not going to have to worry if your teen gets in a fender bender in a listed auto other than the one said child is “assigned” to in the policy. There are only a few states where that may be an issue - CA for example.
Next is defensive driver discount. Most insurance companies allow a discount for a youth who has had either drivers training, or a defensive driver course (both provide a completion certificate).
Another is “good student” discount. Fewer companies offer this, but it’s a good discount. I think the youth has to carry a B+ average, and you have to provide proof to get the discount. You may only be able to use one of the available discounts, but a few companies will combine two.
Next is the deductibles for physical damage done to YOUR vehicles. If the (sedan :)) car that your youth will be driving is an older model and there is no auto loan on it you may consider carrying no collision coverage. So, if your child backs into a pole and dents the car - you live with the dent, or pay out of pocket for the repair. If you go this route I would suggest that you do carry COMPREHENSIVE coverage, which covers most (naturally occurring) damage to a vehicle other than collision. Comp is usually very inexpensive even with a fairly low deductible, and you can often add “full glass”, and roadside assistance, for just a little more. Comp covers broken glass (minus deductible if you do not carry full glass cov.), collision with animals, flood and hail damage, fire, theft, falling tree limbs-you get the picture.
Here is a big issue that most do not know about. Inform your child that under NO circumstances should they allow a “friend” to drive the car. If an accident occurs and the police call you and ask - “Did you give permission for the friend to operate your vehicle?” - say HELL NO! There is a world of legal nightmare waiting if your child is letting other people drive a vehicle listed on your policy. HOWEVER - if you, yourself directly loan your auto to a friend, there is coverage - if that friend turns around and lets their buddy drive your car - there is none.
Again, there are just a couple of states that have VERY specific and hard to follow laws and regs re:insurance. These are the general guidelines for about 90% of the states. For example, in NY we have a coverage called “personal injury protection”. Most NYers do not know that they can reduce their premiums a bit by selecting a per-person deductible on their PIP coverage.
Sorry if it’s a lot to process - I can try to be more specific if you need me to be. :)
IN order-
Teen is assigned to a four door sedan, usually a lower rate.
Auto teen is assigned to has no coverage for collision damage.
Drivers discounts - drivers ed, defensive driving, good student.
And oh, your homes market value isn’t what affects the level of coverage ( replacement cost) rather, what it would actually cost to rebuild your house is the factor.
Are you covered to 100% and have the auto adjust for building cost inflation?
Thank you so much for all of the great information and taking the time to type it all out for me. Yes, it’s a teen we’re signing up and he’s an honor roll guy so that’s good news! :)
I really do appreciate your reply. My mom’s in assisted living, difficult day, so my replies ‘back’ are somewhat sporadic. :(
No worries. Just know that not all insurance companies offer the good student discount - but they all should!
If you have any other questions please feel free to ask. I’ve been out of the field for a few years, but some things are constant.
Also please know that there are certain states that have very tricky regs. CA, NJ, FL are three. NY has weird stuff, and MA doesn’t allow for all insurance companies to compete/sell/bind policies in that state - so if in MA shopping for competitive rates is nearly impossible.
I’m in Minnesota. If there are any weird insurance regulations you know of in this state, please pass them on when you have the time. :)
BFL
None that I can recall. I no longer have access to the info that I had back when I was licensed in about 40 states, but I can look on the website of the commish for your state and see if anything pops up.
Most states are fairly simple and straightforward. It’s the super hardcore progressive states that tend to have weird regulations.
OK - long answer coming your way! :)
Minnesota specific.
You are covered by the policy in your name. Any relative living in your home, who does not have a policy of his or her own, is covered by YOUR policy. This includes a spouse, children, or a minor in your custody or the custody of a relative. A driver using your car with your permission, who is not covered by another policy, will be covered by your policy. (standard in most states too)
Your state requires four parts of coverage be carried.
Liability - this includes bodily injury and property damage that you (or anyone driving your vehicle with your permission) may cause as the result of an accident.
Personal Injury Protection (PIP) provides basic economic loss benefits. If you are injured in an accident, this portion of your policy pays you and members of your household, within the stated limits, for medical expenses, lost wages, and replacement services (if you have to hire help). These costs are paid no matter who is at fault. This is what is known (in Minnesota) as “NO FAULT” coverage, you collect on your PIP benefits, regardless of whether you or the other driver is at fault.
If the other driver is at fault, you make a claim against his or her LIABILITY when your PIP benefits run out. You also can make a claim for damage to your vehicle against the “at fault” driver.
Minimum PIP limits (your state) required are $40,000 per person. That would pay out as follows: $20,000 for medical expenses and $20,000 for “non-medical”, example: loss of wages. (I can not find if your state allows you to select a per person deductible for PIP, so do ask when you get quotes - here in NY we have that option)
Underinsured coverage pays, within stated limits, only for
medical claims of those covered by your policy. These benefits are in addition to your PIP benefits and are used when the other driver is held responsible for the accident and does not have enough liability coverage to cover your medical claims.
Uninsured pays for your medical expenses after you have
exhausted your PIP benefits and when the other driver is held responsible for the accident but is not covered by insurance.
“Stated limits” is the important term. The insurance company will not pay to indemnify you above the limit on your policy.
Which brings me to the minimun liability limits required in your state. They are quite low. VERY low if you have a young driver.
$30,000 for injuries to one person
$60,000 (total per occurrence) for injuries to two or more people
$10,000 for physical damage to the other driver’s
vehicle or for damage to property
Understand how this works - if you have only 30K per person BI limit and the injuries (you caused someone in the other car) exceed that amount you/yours will be personably liabile for all expenses above that amount-into infinaty. If you hit someones car, and you have only the state min. of 10K - you/yours pay out of your pocket for any repairs/replacement above that 10K.
That is why it is wise to know your policy limits very well. That is why it’s wise to carry higher limits than the state required minimums. When you get quotes make sure the various companies are quoting the exact same limits and deductibles.
Speaking of deductibles............one thing that is important to know, and make your teen aware of, is that if you were to slide on ice or snow - or hydroplane, and strike a car or anything else, that is always considered an at fault accident and is never under “Comprehensive” even though it is weather related. The insurance company will say that a person makes the choice to drive in bad weather - hence it is “at fault” damage.
Here is a link to the MN.gov insurance brochure.
http://mn.gov/commerce/insurance/images/auto-insurance-brochure.pdf
I read through it - it’s easy to understand and good information. I would suggest that you have your teen read it out loud to you ( :) ) before being added to your policy. It’s an important part of being a responsible driver. After reading it, look your policy over carefully to determine if your limits are appropriate for your needs.
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