Auto Insurance Comparisons.

[kris]

Since Bogley helped me on a few other issues I have faced. I figured I would try again.

Okay, I have a question for anyone using GEICO for insurance. If you have them and the time came to file a claim, how was the outcome?

With my wife starting graduate school, I am looking to trim some monthly expenses. Auto insurance was the first large payment that came to mind. Currently I have Farmers insurance. The customer service, and local agent are top notch. I live in Farmington, a fairly small town, and the agent and his wife are great people. But again, I am helping to pay their mortgage.

I have three vehicles, a 2005 Nissan Frontier, 2002 Nissan Xterra, and 2004 S2k.

My mileage is as follows:

Frontier 12,000 to 15,000 miles annually, I drive it to work 4 times a week, 30 miles one way.

Xterra 3,000 to 5,000 miles annually. Just the wife's running around town rig.

S2000 1,000 to 3,000 miles annually. Just my toy.

Driving records are clean for the past 5 years, I am 29, the wife is 28.

For pretty much 300/300 insurance with $500 deductible on each vehicle, they "quoted" me $157.30 ($919.80 for 6 months) If I change some coverage, raise the deductible on vehicles that are used less, I can get down to $133 a month.

Farmers is 100/300 $1000 deductible, and I am paying $235 month, ($1400 for 6 months)


Both companies offer multi car discounts, good driving discounts, job discounts, etc.

I would hate to change companies just to save some money, but lose out on better customer service if the time arises.

Any input?

[Scott Card]

Oh man do the insurance companies have everyone schnookered or what! Are you really considering the customer service of the agent selling the policy???? I have been working in the personal injury business for over 20 years now. I have represented hundreds of clients and dealt with almost every insurance company multiple times. There ain't a dime's worth of difference with any of them when it comes to filing and paying a claim. THEY ALL STINK! The way the good hands folks make money is by becoming a tight fist. The way your good neighbor makes money is by closing the door. The way the little gecko makes money is by biting you or the person you injured. In other words, these insurance companies are FOR PROFIT companies. They are not charitable organizations despite the warm and fuzzy adds. I get this question all the time from clients, neighbors friends, etc. as to which insurance company is the "best". My answer has not changed since about the first year of dealing with them. The answer is, drum roll please...... buy the most insurance for the cheapest price from a known company. (no offshore stuff) If you buy liability insurance of 100/300 for $100 per month or 100/300 for $200.00 per month, you still end up with the same coverage. One you pay more for another you pay less for. I will say that the cheapest insurance is typically Bear River or American Family.

Besides liability coverage, please, oh please protect yourself with high limits of under insured and uninsured (UIM and UM) insurance. The typical policy sold is for only 10k per individual per accident. If you get hit and injured by a person who is not carrying insurance or has the state minimum of 25 K and you have a broken leg requiring surgery, you could have bills in excess of 60K before you leave the hospital. (I have a client with that injury and those bills after having been hit on his motorcycle.) Your only option to have your bills paid is to go after the individual who likely doesn't have two dimes to rub together or hope your health insurance is adequate. Oh and the copays..... Bottom line, buy cheap and get the most you can afford with liability and Under insured and uninsured coverage. That is what protects you.

Your bank likely dictates the insurance on the car itself if there is a debt owed. Otherwise, cover what you can't afford to lose.

Another part of insurance purchasing is don't fall into the trap of "I have FULL coverage". That phrase means nothing other than you have purchased all the types of insurance you can. It has NOTHING to do with whether you are adequately covered or not. UM and UIM are pretty cheap insurances that is why agents don't push it too much.

As to your agent, I understand the loyalty thing. My brother-in-law is in the business but I don't buy from him because his company is more expensive. He tried to beat my rates but couldn't. I bought the cheapest and he still talks to me. You must understand that agents DO NOT handle claims. Insurance claims are turned over to claims adjusters....(start the scary music now) da da dum.... They are not the nice agents you buy from. Ever see the movie "The Incredibles"? Remember the insurance claims department Mr. Incredible worked in? A fair amount of truth there. I have rambled enough. My bill will be in the mail. Sorry for all the shouting in CAPS but I have a bit of an issue when people come to my office under covered or telling me they have "full coverage" only to find out they have a minimum policy for maximum dollar. I don't advertise other than a small phone add or magizine add and then it is general in nature. I get clients because many claims adjusters just tick people off and make them feel like they are some sort of dishonest criminals when they don't think the piddley little offer is fair. Oh wait, I was supposed to quit. Can you tell I have an opinion on this one?

[kris]

Thanks! Your post definitely explained a little of what I needed to know. :? Shopping for insurance is kind of a pain. I guess I will do like what you said. Find the right coverage, for the best price.

[KapitanSparrow]

I chose GEICO because they were cheap, way cheaper than Allstate. But I agree with the attorney that all of them will try to screw you over when it comes to paying a claim. That's their job. In the future, try to rear-end illegal immigrants with fake licenses and/or no insurance. That's the ticket!

[Deathcricket]

I went through geico when I was a younger man for the reason it was so cheap. But.... I did get into an accident and they were no help whatsoever. They even refused to help me at one point saying I had to deal with the company they shopped through and to talk directly to them. I didn't even know they were a broker and didn't carry my policy. I won't go into all the details but just to say it was a complete nightmare. I was driving on a 4 lane freeway in the fast lane. The guy in the slowest lane swerved into a parked/disabled car on the shoulder and spun 3 lanes over into mine sideways. I ran into him, then 4 people rammed into me. Besides a bloody nose from the airbag, I was unharmed. Anyways, enough details. These people and pretty much everyone in each car were calling me nonstop for 6 months. It was so bad I cancelled my policy before this situation was even resolved. The person behind me wasn't even going to cover my damages. I had to take them to court and get the matter settled myself. My insurance didn't help at all. They treated me like a criminal, saying I should have been keeping a safe distance from a car 3 lanes over. And that the person who rear ended me wasn't responsible. And that was after 15 attempts to even contact them. Now compare my story with these two.

My brother worked for KFC back in the days. He pulled out in front of a motorcycle and the guy flew over his car. He was totally at fault. The guy sued him, sued KFC, etc. My bro just got one call from his Allstate agent that the matter had been settled and everything was handled, and asked how was he feeling. He didn't even know that guy was suing him until the Allstate guy told him the resolution.

My parents live in San Diego and a huge fire came through years ago. While sparing the house it took out their free standing garage, with my dads 69 vette, massive amounts of tools (he's a carpenter), their wellhouse, and a bunch of other stuff. They were just happy to be alive though. Anyways, the Allstate (or Statefarm I can't recall) guy was out there BEFORE they were. The very next day to survey the damage. Stuff was still smoking. He took pictures of all the damage and filed the claim for them, and cut a check within 2 days for everything. Same thing, small town, knew my parents by name, etc. But the point is, he was there when they needed him and went above and beyond the call of duty. They will use him for life.

So anyways after my "experience" with GEICO I was so pissed I would never go back to them. I do shop around (other companies) every couple years to keep allstate honest, but for me the difference is only around $40 including all 4 of our cars. I only have one expensive car though, the wife's Acura CL. The rest are cheap and paid off. If it was that that huge a difference you are talking, then I would switch to. I've not had a problem or needed to contact my insurance in 15 years. So even though I would say the service is night and day difference, I've personally never even used them since I switched over. Saving cash is better in the long run I think. But when the "sh!t hits the fan", it's nice to have good customer service for peace of mind. At least for me. I forget the numbers you threw up, but recall it was like an $80 difference, worth it IMO. And hopefully you won't even have to use them.

[Scott Card]

Two comments. Not all claims adjusters are created equally. Second, claims adjusters often act quickly to cut losses. In other words, if they can get a person to settle quickly, before all the damages are determined, they save money. I had a lady walk into my office several years ago with a $15k settlement check. She had been hit by a car while walking her bike across the road while in a cross walk. He had a fractured hip (not too bad) she wanted to know if it was a good deal. I told her nope and we got involved. Settled for about $90K. In short, quick action and fast settlement doesn't necessarily mean fair settlement. Once a case is settled, there is no going back and getting more if other problems arise or the problems you have are worse than originally thought.

Lest I be labled an insurance hater, there are some very capable and competent adjusters out there that make me cross my "t's" and so forth. But when the pieces are put into place, my case is proven, they will make fair offers.

I know customer service is important to many folks but 100K in coverage is still only 100K in coverage despite the smiles and glitzy commercials. And to many folks, we hope to never use insurance and it would be nice to save the extra $40-80 bucks a month. It adds up. Also, most never use the insurance or only file a claim a time or two through out a person's driving life. Comparing to the cost savings to the benefit of good customer service once or twice a life time, I choose saving money.

[Deathcricket]

I can agree with that, but with one small condition. I think "hometown" adjusters who know the clients personally are more likely to make fairer offers. Lets say the adjuster at my parents house was trying to close quickly to save a buck. Shafting them would have lost him business in the long run. So it's in his his interest to "take care of" his clients and keep them happy for when they really do need him. That one small token of being fair got him lifetime customers. He gave them an awesome deal, took their word on possessions, when only ashes remained and FULLY reimbursed everything. They (my parents) have even managed to recruit 2 neighbors who had cheaper insurance and the nightmare they dealt with. The whole neighborhood burned down.

I would say people shopping for the "lowest price" can expect to be treated like a claim number. Each person should decide what factors are more important to them. But my personal experiences have shown that you do get what you pay for, and I feel that's true, even from insurance companies. For me, $40 extra is worth the piece of mind knowing if i need help someday, I will get it. $80 bucks though I would take my chances I think. Just having been a customer of GEICO and the 6 months of torture... What if I was actually hurt? In the hospital? Back then I was a single guy, now I have a family. What if they were hurt? They didn't even contact the wrecking yard my car was towed to and it got auctioned off after 3 months, never to be seen again. I had my DAT player in it worth $2k that I could have grabbed. I didn't know I had to "claim" it and store it somewhere on my own. Little stuff like that. I can't take off work and deal with these issues like I could before.

Edit: Just chatted with my mom, she said they use Allstate. She also mentioned it took one of our neighbors 15 months to receive a settlement. It was also for the price their house was when they bought it 9 years ago, not the value it was at the time (350k vrs 650k). Their house burned down, they had to live at hotels and with friends and family, making their own arrangements, yadda yadda yadda. I'm sure you get the picture. but if you're gonna shop for price alone, know what you're getting into is my only point.

Sorry for the ramble, slow at work today.

[Scott Card]

I would say people shopping for the "lowest price" can expect to be treated like a claim number.

I would again say that it is claim adjuster dependant. I had a great experience with my adjuster from Bear River when I got hit twice. No problems. I had a horrible experience with a different and more expensive company while in California. Again, there are really good ones and horrible ones.

Each person should decide what factors are more important to them

I agree. Make your best decision and priortize factors and go with it. My parents have been with the same company for decades despite me telling them to shop around. They like the agent and they get free calendars at Christmas and birthday cards on their birthday. Good agent for sure. But pricey insurance too.

BTW, I am not really disagreeing with you. Yet I feel somewhat compelled to explain a bit about the insurance industry at least from my perspective. Your bad experience with GEICO is precisely the reason I have clients.

[kris]

I assume most the cost difference is the price of having an agent? I don't mind paying a few dollars more for an agent that will help me when I need it. I would rather deal with someone in my community, rather than Shri Lanka.

However, $100 a month difference is hard to swallow, especially if I could put that towards something else.

I just called my agent, and explained my situation. She said she will see what she can come up with. I also faxed her my quote from GEICO, with the coverages, and price.

[Scott Card]

I assume most the cost difference is the price of having an agent? I don't mind paying a few dollars more for an agent that will help me when I need it. I would rather deal with someone in my community, rather than Shri Lanka.

That is part of it. You have to understand that rates are based on a number of factors all dealing with statistics and probabilities. In other words, because of your age, the car you drive, your credit, your prior driving record, your zip code, etc etc, how likely are you to cost the company money? What is the company risk to insure you based on a bunch of statistical factors as compaired to the average man. All those factors are thrown into the mix (a big computer) and a rate is spit out. I was amazed that in LA the difference in insurance was primarily due to what zip code you lived in. (Theft, crime, accident frequency...etc) Also, the older you get the cheaper it gets. And by the way, if there isn't a local claims office per se, there are local adjusters that are hired by USAA or California Casualty or others that are out of state so for property damage claims you will have a local adjuster. The personal injury claims are regularly farmed out of state. Until recently, State Farm had claims sent to Greeley Colorado. One constant about the insurance claims industry is that they are always in a state of restructuring internally. All in the effort to save the company money. I have probably noticed the biggest changes with State Farm and Allstate. State farm has "teams" who handle the case. If it ain't on their call log then you didn't say it. In other words, there may be a lack of continunity between the adjusters you speak with because they don't know what one has said to you or you to them unless it is on the call log.

However, $100 a month difference is hard to swallow, especially if I could put that towards something else.

I just called my agent, and explained my situation. She said she will see what she can come up with. I also faxed her my quote from GEICO, with the coverages, and price

Dang, with that attitude you are almost ready to dicker for a used car! Good luck and I hope you never have to use the insurance you purchase.

One other comment that I think Deathcricket is saying is that insurance buys peace of mind. Some place greater value on the customer service aspect that the agent will be there quickly and will deal with it in a kind manner. I guess I am just more concerned about the coverage peace of mind and knowing that I am paying less for something I hope to never use again. [quote]

[Skylinerider]

FWIW I just last week switched from GEICO to Allstate. GEICO's cheap coverage is really crappy ie low limits on UIM etc, I switched to Allstate and got WAY better coverage for less than I was paying. While I was at it I changed my home insurance too again with better coverage for less money.

[Deathcricket]

Ahh sounds like a good idea kris. I do recall when I had GEICO they didn't really give me an agent. Rather I would call into a number and my call would be answered in the order received. Usually took 5-15 mins to get through, depending on the time of day. This was years and years ago though. But seeing how it's an infinitely cheaper model, I doubt it would change.

Ok Scott one more question then. I'm not disagreeing with you either. I like hearing different perspectives. Do you at least agree that the higher percentage of "good agents" would be in a company with higher premiums that pays better? Doing a brief internet check, it looks like a GEICO agent makes about 30k a year. Thats what? $14 bucks an hour? Who would really care about a job like that? Allstate looks like they make an average of $60k. Double. So my money would be on the person making a half way decent living, rather than the call center person working part time through college. Agreed?

http://www.indeed.com/salary?q1=loca...1=Dallas%2C+TX
http://www.indeed.com/salary?q1=insu...bs+Ferry%2C+NY

Edit for Scott : I see your posts after I send mine in LOL. But my stance is that "piece of mind" comes more from knowing (or at least believing) that the experience I personally had with GEICO before will not occur again. If I hadn't been screwed by them so bad I probably would be singing a different tune. I'm a cheap bastard at heart, no doubt. But I'm not very forgiving when a company has "wronged" me.

[Scott Card]

There is a very high turnover in claims adjusters no doubt with the lower paying companies. However, if memory serves me correctly, Allstate was voted the worst company to deal with recently. There is a book out called something like "From Good Hands to Boxing Gloves" that outlines the tactics used by Allstate. I'll look it up when I get back to my office. They don't have the best customer ratings for sure. So, I probably disagree as it relates to a personal injury claims but probably agree as to property damage claims. However, if your car has extras (rims, lift kit, etc), even the big companies have heart burn paying full value for them if damaged.

[Jaxx]

I will say that the cheapest insurance is typically Bear River or American Family.

He is right except for the American family part. I am partial thought because I am a Bear River Agent. If you want a quote just PM me. I have enough info to run your numbers.

[Scott Card]

I will say that the cheapest insurance is typically Bear River or American Family.

He is right except for the American family part. I am partial thought because I am a Bear River Agent. If you want a quote just PM me. I have enough info to run your numbers.

Well pipe up young man!! Where have you been? Please correct me where I am wrong in what I have said above. I only know the business looking from the outside in and only with my experience in dealing with them. (BTW, I have Bear River if I didn't say that before. Can I have a discount now? )

[Jaxx]

Scott you are pretty spot on. Agents can't do much when it comes to claims.
One trick to get the insurance company to see your side of the story is to threaten to call the state insurance dept. and file a claim.

Honestly I tell people to shop around whenever their renewal is up. I hope we are still the cheapest at renewal but if someone is cheaper I have no hard feelings for them going elsewhere.
I have had some clients switch to us because they can't get in touch with their Agent. But most people switch because of premium.
I would never suggest lowering coverages to save money. Of course if you want to It's your policy, I just won't suggest it.

[Scott Card]

There is a book out called something like "From Good Hands to Boxing Gloves" that outlines the tactics used by Allstate. I'll look it up when I get back to my office.

The book is in fact titled "From Good Hands to Boxing Gloves - The Dark Side of Insurance" written by Attorney David Berardinelli. On the inside jacket of the book it states:

A storm of change in the insurance industry had battered America in the last fifteen years. Icreasing premiums, plummeting settlement values, and soaring revenues show an industry blindly driven by profit, rather than one which protects people. In doing so, insurance companies have morphed into Dow-Jones darlings-- vehicles for share-holder earnings

Attorney David Berardinelli explores Allstate's transformation after it hired the consulting firm McKinsey & Company in the early 90's. Berardinelli had exclusive access to "The McKinsey Documents" -- consulting presentations upon which Allstate based its highly lucrative and unethical practices. This book's title comes directly from these documents, where McKinsey advised Allstate to treat its own customers with "boxing gloves" in order to increase profits.

My personal opinion is that many of the larger companies have followed this pattern because Allstate became so lucrative. Anyway, in case any one is still interested.....

[skianddive]

I have rambled enough. My bill will be in the mail.

Thanks for all of your good advice, Scott, based on your real-life experience, observations, and dealings. If you have any geeky computer questions that need to be answered, there will be no charge, either!

[Scott Card]

I have rambled enough. My bill will be in the mail.

Thanks for all of your good advice, Scott, based on your real-life experience, observations, and dealings. If you have any geeky computer questions that need to be answered, there will be no charge, either!

Have you ever felt so stupid that you don't even know what to ask? That is me and computers. Thanks for the offer. I may very well need it and soon given my current aptitude with these necessary evil machines.

[skianddive]

Have you ever felt so stupid that you don't even know what to ask? That is me and computers. Thanks for the offer. I may very well need it and soon given my current aptitude with these necessary evil machines.

Yes, they can appear to be evil, and just as with insurance companies, there are many evil computer vendors where profit is #1 and customer service is non-existent - or in India!

Fortunately, with 30+ years in the computer industry, I don't have to ask many tech questions, but when it comes to the many subjects that I feel stupid about, like law, I always start my question with this:

"This may be a stupid question, but......"

If the question isn't stupid, then you look like a genius; and if it is, then you've already admitted it and you don't need to apologize.