Insurers' Road Service Could Prove Costly (flat tire=bad driving record?)

Tampa Tribune ^ | Decembe 15, 2005 | RANDY DIAMOND

[ChildOfThe60s]

TAMPA - Andrea Davis can't understand what two flat tires and leaving the keys in her car have to do with being rejected for auto insurance.

The answer lies in the optional emergency road service coverage the Lutz resident was persuaded to buy from her insurer, Geico, for $12 a year. The bargain rate, one-fifth the cost of emergency road service from AAA, turned out to be no bargain at all.

Davis, 31, discovered how costly her Geico emergency road service was when she shopped for an insurer that could beat the $1,400 a year she paid Geico for coverage on her 1999 Isuzu Rodeo. Florida's largest auto insurer, State Farm Mutual Auto Insurance Co., beat the price by several hundred dollars but rejected her because she had excessive road service calls under her Geico policy.

"They said I had too many claims," said Davis, a public relations manager with a perfect driving record. "I didn't meet their eligibility requirements."

Davis was mystified and asked for an explanation.

That's when the State Farm agent told her that three calls in three years for roadside assistance under her Geico policy counted against her as claims. Davis had two flat tires and once locked her keys in the car.

"If I had known it would have affected my ability to get insurance, I would have paid $60 to get AAA," Davis said.

AAA (American Automobile Association) doesn't report its road service calls to an outside company, but insurers do.

[ChildOfThe60s]

Another example of how/why the term sleezy practices has become synonymous with the insurance industry. There is no reason they can't make money without cheating people. I am cancelling my roadside assistance rider with State Farm today. In the last 1-1/2 years I have used it twice. Once more and my 25 years of good driving become worthless?

I am a believer in capitalism and this kind of thing just gives more fuel to the private enterprise haters.

As I have noted before, two industries in the US are exempt from anti-trust regulation. One is MLB, and the other is.........yep, you guessed it, the insurance industry.

[goldstategop]

Yeah... I don't see how having a roadside breakdown makes one a high driving risk. Lesson of this is, if you need roadside assistance, stick with your state AAA and leave the insurance company out of it. Its nothing they need to know about.

(Denny Crane: "I Don't Want To Socialize With A Pinko Liberal Democrat Commie.Say What You Like About Republicans. We Stick To Our Convictions. Even When We Know We're Dead Wrong.")

[Mr. Brightside]

I have State Farm. Neither my wife, nor I, have had an accident or a ticket in over ten years.

One month ago I backed out of a parking space when someone else was backing out of theirs. The other driver had a dented fender and I had no damage on my truck. I did not put in a claim. The other driver did.

State Farm informed me that if I have one more accident, they are cancelling me.

[TOWER]

If that saleswoman who keeps calling me to sell me roadside assistance ever reads this article, then hopefully she will finally understand why I always say no.

[jiggyboy]

Wow I guess if you start with Geico you'd better stay with Geico under that scenario. I gotta assume her actual insurance rate didn't go up.

[PeterPrinciple]

Just goes to prove that you never, ever want to collect on any insurance if at all possible. Insurance is for catastrophes that you can't handle otherwise.

It is not there to cover an ordinary expense thay you should be able to pay.

[Rakkasan1]

she should just say she's not a "documented worker". then she would be just fine and probably even be offered free tuition.

[babyface00]

I have been very happy with my insurance through Allstate, even though they're a bit pricey. I've never had a problem with claims, although I don't file unless absolutely necessary.

That said, I get my roadside assistance through AAA.

[proudofthesouth]

Geico cancelled me 18 months after I had my auto accident. When I asked why they were cancelling me (I could have understood it if they had done it right after the accident) I was told that it was the first chance they'd had to review my file.

[beef]

"Insurance is for catastrophes that you can't handle otherwise."

You are absolutely right. I always go with the highest deductibles I can and try to never make a claim. I told my agent that if I call with a claim, he'd better be sitting down because it's going to be a doozy. Most people seem to want someone to run over and smooth out every little bump. It's a symptom of creeping socialism, I guess.

[Izzy Dunne]

it was the first chance they'd had to review my file.

I'm sure they would have felt the same way if you had been 18 months late with that premium check.

"But it was the first chance I'd had to find my checkbook!"

[jra]

It's not that it makes you a high risk--it's that you're asking your insurer to pay a claim you're making.

I'm not saying that I agree with what Geico did, but to call for roadside assistance 3 times per year? What's up with that?

You're right--AAA sounds like a much better option.

[conservativehusker]

In the article it explains the theory about refusing to accept a client with 3 tiny claims..they are statistically more likely to turn in other claims..

It amazes me that SOME folks on this board who are normally pro business and common sense go nuts over insurance articles...

There are very good reasons for the things insurers do...they are usually based on statistics and secure logic...these companies have been insuring things for over 100 years. they have mountains of Data to back up thier practices...the profit margins of insurers are right in line with other businesses and they have lots of regulators and consumer advocates watching over them..

I find it funny that the industry is held in such contempt. Most on this board feel folks should take care of themselves - not accept welfare - but some are the first ones in line to get "their fair share" after all they paid premiums for over 20 years...guess what those same folks have paid taxes for years but wouldn't think of taking welfare!!!

[MRMEAN]

It amazes me that SOME folks on this board who are normally pro business and common sense go nuts over insurance articles...

What is objectionable here is the lack of disclosure, that insurance companies offer a low rate for the road service without telling the insured that their use of the service will be reported, and might even impact their auto insurance rates. In fact if the use of the service resulted in an increase in the auto insurance rates of the offering company, it begins to look like a scam. From the article:

If motorists knew they could be penalized by their insurer for using road service, they would never sign up for the service and instead would go to AAA or another motor club, Friery [of the Privacy Rights Clearinghouse] said.

[Iwo Jima]

Then you should only be charged for catastrophic coverage. You are being charged for coverage for "ordinary expenses that you should be able to pay," just being told don't you dare make a claim for a covered occurrence.

For some people, a couple hundred dollars IS a catastrophic event.

[tiki]

We had no claims on a 10 yr duration policy and my son bought a Jeep when we went to insure it they cancelled the whole policy because they didn't insure Jeeps. I was really mad and didn't carry any insurance for 2 yrs and then figured I had pressed my luck long enough.

[Iwo Jima]

It's a symptom of creeping socialism, I guess.

Explain to me why filing a claim for a covered occurrence which YOU PAID TO HAVE COVERAGE FOR is socialism.

Sheesh!

[TChris]

It amazes me that SOME folks on this board who are normally pro business and common sense go nuts over insurance articles...

It is quite reasonable to be both pro-business and pro-honesty. Deception by omission -- conveniently failing to mention that use of the roadside assistance counts as a claim, in this case -- is a common and reprehensible practice in the insurance industry.

[Iwo Jima]

Explain to me why filing a claim for a covered occurrence which YOU PAID TO HAVE COVERAGE FOR is welfare.


Insurance companies want to charge you for coverage which you will not use even when a covered event occurs and for which you have every legal and moral right to demand payment. You think people should be intimidated into refusing to make claim to what is rightfully theirs.

Your efforts to denigrate people who only seek to hold a business to the contract WHICH THEY WROTE is not "pro business." It is "pro business" to expect people to keep their promises, but you seem to think that it is beneath contempt for someone to actually have the audacity to file a covered claim. It is the insurance company, not the insured in these situations who is seeking the unearned, really a form of theft.

[Eagle Eye]

That's odd. Two of my kids have EACH totalled a car in the late 18 months and, although the rates did go up, no cancellation notices have come and I've renewed the policy.