Car insurance woes

[retired]

I saved $1,886 in premiums for one year on two cars. Say what you want, but I'll take the cash.

[thinkxingu]

Originally Posted by retired

I saved $1,886 in premiums for one year on two cars. Say what you want, but I'll take the cash.

That's a crazy difference that has me wondering if mistakes were made on either end. I've only ever shopped around a few times, and the differences were tens of dollars unless making big changes in deductibles, coverage limits, etc.

I just don't see insurance companies with similar coverage being that different in cost, but maybe someone with professional experience can chime in...

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[Descant]

Originally Posted by thinkxingu

That's a crazy difference that has me wondering if mistakes were made on either end. I've only ever shopped around a few times, and the differences were tens of dollars unless making big changes in deductibles, coverage limits, etc.

I just don't see insurance companies with similar coverage being that different in cost, but maybe someone with professional experience can chime in.

Twenty five years as a sales rep for a direct writer. Based in Manchester, but I had accounts in NH, MA, ME, VT, FL, CA because I could access underwriters all across the country, for people with second homes or kids in far away colleges. I retired in 1999.

First, recall that insurance is a regulated industry. The Insurance Commission has a dual obligation on prices. One is to be sure companies charge rates and have reserves that are sufficient to pay claims. The other is to be sure that rates are not exorbitant or cherry picking.
This still gives companies significant latitude to increase or decrease their market share in states that are either costly or very profitable. Large companies adjust their rates to increase market share in say Wyoming, and not so much in Florida. Moving into a new market, or expanding, rates may be artificially low so they can generate enough business to support staffing as well as claims.

NH is a "take all comers" state, there is a "pool" so that insurance companies can put high risks in the pool and not carry the full burden themselves. Individual companies determine which risks they want or don't want. The pool rate won't vary much from company to company, so if you have, say, a recent series of tickets, they may put you in the pool, and you won't save a lot no matter how much you shop. At the same time, if you have a youthful operator who moves out of the house, a new application may give you a better rate, where the old company had no idea that Junior moved to Colorado. Shop your present company first.

Independent agents can shop for you, but mostly only with the companies that they have agency contracts with. Sometimes, they try to manage their accounts to keep a particular relationship in place. I used to get paid a commission on a new sale on a sliding scale based on the "quality" of the business and year end bonuses based on retention, loss ratio , the quality of portfolio compared to others in the area, etc. Pretty complicated.

In the "old days" I could pretty much ask a few simple questions and quote coverage/rates. Now, I'd have to log into "Faire Isaac" or some similar algorithm, and get tons of details, a lot of which is derived form online sources, like a credit score or driving record. This will only get better/worse as companies increase the use of AI technology.

Other thoughts. Insurance companies aren't out to screw you. The insurance commission and market forces prevent this. Calling the commission is free and they get quick responses when they call an agent or a company if you think you're being treated unfairly.

[thinkxingu]

Originally Posted by Descant

Twenty five years as a sales rep for a direct writer. Based in Manchester, but I had accounts in NH, MA, ME, VT, FL, CA because I could access underwriters all across the country, for people with second homes or kids in far away colleges. I retired in 1999.

First, recall that insurance is a regulated industry. The Insurance Commission has a dual obligation on prices. One is to be sure companies charge rates and have reserves that are sufficient to pay claims. The other is to be sure that rates are not exorbitant or cherry picking.

This still gives companies significant latitude to increase or decrease their market share in states that are either costly or very profitable. Large companies adjust their rates to increase market share in say Wyoming, and not so much in Florida. Moving into a new market, or expanding, rates may be artificially low so they can generate enough business to support staffing as well as claims.

NH is a "take all comers" state, there is a "pool" so that insurance companies can put high risks in the pool and not carry the full burden themselves. Individual companies determine which risks they want or don't want. The pool rate won't vary much from company to company, so if you have, say, a recent series of tickets, they may put you in the pool, and you won't save a lot no matter how much you shop. At the same time, if you have a youthful operator who moves out of the house, a new application may give you a better rate, where the old company had no idea that Junior moved to Colorado. Shop your present company first.

Independent agents can shop for you, but mostly only with the companies that they have agency contracts with. Sometimes, they try to manage their accounts to keep a particular relationship in place. I used to get paid a commission on a new sale on a sliding scale based on the "quality" of the business and year end bonuses based on retention, loss ratio , the quality of portfolio compared to others in the area, etc. Pretty complicated.

In the "old days" I could pretty much ask a few simple questions and quote coverage/rates. Now, I'd have to log into "Faire Isaac" or some similar algorithm, and get tons of details, a lot of which is derived form online sources, like a credit score or driving record. This will only get better/worse as companies increase the use of AI technology.

Other thoughts. Insurance companies aren't out to screw you. The insurance commission and market forces prevent this. Calling the commission is free and they get quick responses when they call an agent or a company if you think you're being treated unfairly.

Ummm...so does it seem reasonable for identical/similar coverage policies to be that different in pricing across providers?

It sounds like no (because there needs to be sufficient premiums to cover claims) unless a company is expanding and offers lower premiums for a short period of time?

OP: what provider did you come from and go to, if you don't mind me asking?

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[Descant]

Originally Posted by thinkxingu

Ummm...so does it seem reasonable for identical/similar coverage policies to be that different in pricing across providers?

It sounds like no (because there needs to be sufficient premiums to cover claims) unless a company is expanding and offers lower premiums for a short period of time?

OP: what provider did you come from and go to, if you don't mind me asking?

Similar coverages, probably yes, similar price. But different companies like or more often dislike, certain cars. In a small market like NH, they may not like your 12 cylinder Jaguar convertible because it is very expensive to repair and doesn't handle well in the snow. Better to stick with a nice AWD F-150, cheap to repair and nobody ever steals it.

[retired]

State Farm also gave us a quote much less than Allstate at $391 for six months.
Allstate $1,125
State Farm $391
Progressive $242

I don't know why the big difference. We are retired and don't drive a lot, have virtually no debt, excellent credit score and no accident history. I'm guessing that everyone but Allstate sees us as low risk good customers. Their loss.

[thinkxingu]

Originally Posted by retired

State Farm also gave us a quote much less than Allstate at $391 for six months.

Allstate $1,125

State Farm $391

Progressive $242



I don't know why the big difference. We are retired and don't drive a lot, have virtually no debt, excellent credit score and no accident history. I'm guessing that everyone but Allstate sees us as low risk good customers. Their loss.

Yeah, that's a huge difference, for sure, but given that two reputable insurers that close would definitely make me feel better.

Enjoy those savings and good luck! Maybe report back with your experiences next year?

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[TheProfessor]

Originally Posted by retired

I don't know why the big difference.

The best policy is to visit an autobody shop and ask the shop owner what company is the easiest to work with.

Are you sure you are comparing apples to apples?

Yes, one can get a lower rate if they agree to a $5,000 deductible.

Footnote. Neighbor went for the lower car insurance from one of those that advertise on TV. In a minor accident. That insurance company sent him to a body shop where they attempted to replace dented parts with used parts.

Also, some of the budget insurance companies require aftermarket (Chinese) body panels as opposed to OEM factory body panels.

[retired]

I haven't heard anything negative about Progressive's claims handling. Have you?

[John Mercier]

I seem to remember they use Irwin's as the certified.