Erie Insurance Agreement

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Topic Author
faltuk1
Posts: 99
Joined: Thu Oct 09, 2008 9:58 am

Erie Insurance Agreement

Post by faltuk1 »

I am moving all my insurance (Home, Auto, Umbrella) to Erie. I have been asked to sign the below agreement. Is this standard? Should I be worried?

SUBSCRIBER’S AGREEMENT
The Subscriber ("you" or "your") agrees with the other Subscribers at ERIE INSURANCE EXCHANGE ("ERIE"), a
Reciprocal/Inter-Insurance Exchange, and with their Attorney-in-Fact, the Erie Indemnity Company ("we" or "us"), a Pennsylvania
corporation with its Home Office in Erie, Pennsylvania, to the following:
1. You agree to pay your policy premiums and to exchange with other ERIE Subscribers policies providing insurance for any insured
loss as stated in those policies.
2. You appoint us as Attorney-in-Fact with the power to: a) exchange policies with other ERIE Subscribers; b) take any action
necessary for the exchange of such policies; c) issue, change, nonrenew or cancel policies; d) obtain reinsurance; e) collect
premiums; f) invest and reinvest funds; g) receive notices and proofs of loss; h) appear for, compromise, prosecute, defend, adjust
and settle losses and claims under your policies; i) accept service of process on behalf of ERIE as insurer; and j) manage and
conduct the business and affairs of ERIE, its affiliates and subsidiaries. This power of attorney is limited to the purposes described
in this Agreement.
3. You agree that as compensation for us: a) becoming and acting as Attorney-in-Fact; b) managing the business and affairs of ERIE;
and c) paying general administrative expenses, including sales commissions, salaries and employee benefits, taxes, rent, depreciation, supplies and data processing, we may retain up to 25% of all premiums written or assumed by ERIE. The rest of the
premiums will be used for losses, loss adjustment expenses, investment expenses, damages, legal expenses, court costs, taxes, assessments, licenses, fees, and any other governmental fines and charges, establishment of reserves and surplus, and
reinsurance, and may be used for dividends and other purposes we decide are to the advantage of Subscribers.
4. You agree that this Agreement, including the power of attorney, shall have application to all insurance policies for which you apply
at ERIE, including changes in any of your coverages.
5. You agree to sign and deliver to us all papers required to carry out this Agreement.
6. This Agreement, including the power of attorney, shall not be affected by your subsequent disability or incapacity.
7. This Agreement is and shall be binding upon you, us, and all executors, administrators, successors and assig
User avatar
Hawkeye5
Posts: 190
Joined: Tue Aug 31, 2010 2:59 pm
Location: Hendersonville, TN

Re: Erie Insurance Agreement

Post by Hawkeye5 »

Any reciprocal exchange requires you appoint the attorney-in-fact and agree to the exchange with other subscribers. The name of the company is Erie Insurance Exchange. There is also an Erie Insurance Company which is a stock company and no subscriber agreement is required. Most insurance companies are mutuals or stock companies, however there are a few significant reciprocals in the market.
As an aside, my coverage is with Erie Ins. Exchange.
Topic Author
faltuk1
Posts: 99
Joined: Thu Oct 09, 2008 9:58 am

Re: Erie Insurance Agreement

Post by faltuk1 »

So, it means claims are covered by premium collected from other subscriber. So, what happens if there is a big catastrophe and exchange goes into loss? Where would the money come from to cover all the claims?
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Optimistic
Posts: 344
Joined: Tue Sep 28, 2010 5:05 pm

Re: Erie Insurance Agreement

Post by Optimistic »

faltuk1 wrote:So, it means claims are covered by premium collected from other subscriber. So, what happens if there is a big catastrophe and exchange goes into loss? Where would the money come from to cover all the claims?
The same place it would for any other insurance company. Maybe the state insurance guarantee. Maybe the federal government. Maybe it doesn't get covered. Whatever the answer is, there's nothing unique about Erie.
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Steelersfan
Posts: 4125
Joined: Thu Jun 19, 2008 8:47 pm

Re: Erie Insurance Agreement

Post by Steelersfan »

How many policy holders does Erie have? Millions I expect, including me.

Did they change the language for them? No

Will they change it for you? No

Be satisfied to be one of the millions or find another insurance company.

You'll probably find their agreement says the same thing.
Topic Author
faltuk1
Posts: 99
Joined: Thu Oct 09, 2008 9:58 am

Re: Erie Insurance Agreement

Post by faltuk1 »

I am being extra cautious because I had not heard of Erie before. I don't remember signing anything like this with my previous insurance companies, allstate, progressive, gieco etc.
User avatar
Steelersfan
Posts: 4125
Joined: Thu Jun 19, 2008 8:47 pm

Re: Erie Insurance Agreement

Post by Steelersfan »

Check out J. D. Powers ratings done with surveys of thousands of policy holders for several types of insurance.

http://ratings.jdpower.com/insurance/index.htm

Erie gets their top rating (of all insurance companies) in three categories.

If you drill down into the individual products, you'll find them highly rated (just not number one) in several more of them.
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runner9
Posts: 2260
Joined: Tue Aug 02, 2011 8:49 pm
Location: Ohio

Re: Erie Insurance Agreement

Post by runner9 »

http://www.bogleheads.org/forum/viewtop ... 2&t=140044

Several of us told you yesterday they are a great company with no/few issues.
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Hawkeye5
Posts: 190
Joined: Tue Aug 31, 2010 2:59 pm
Location: Hendersonville, TN

Re: Erie Insurance Agreement

Post by Hawkeye5 »

faltuk1 wrote:I am being extra cautious because I had not heard of Erie before. I don't remember signing anything like this with my previous insurance companies, allstate, progressive, gieco etc.
Because none of those companies are reciprocals. Do a search on types of insurance companies legal structure. Erie and Allstate have the same Best's Financial Rating, and the other companies mentioned are national while Erie is regional, not writing West of the Mississippi or South of Tennessee.
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