How much $ savings needed to change car insurance companies?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
fsrph
Posts: 1009
Joined: Sun Jul 26, 2009 7:54 pm
Location: Pa.

How much $ savings needed to change car insurance companies?

Post by fsrph » Sat May 31, 2014 8:21 pm

I was thinking about changing car insurance companies. Details are in my previous post http://www.bogleheads.org/forum/viewtop ... 2&t=139189 .

I received my renewal notice from State Farm and know what the savings will be. These quotes are for the exact same coverage.

State Farm
$740 per year

GEICO
$500 per year

This seems like its worth switching to GEICO. What savings would a Boglehead need to change car insurance companies? I know, the Boglehead answer is $1, but realistically how much savings would you need. I would be losing my local State Farm agent with local service. But the savings seem to justify the switch? Am I thinking right?

Francis
"Success is getting what you want. Happiness is wanting what you get." | Dale Carnegie

DSInvestor
Posts: 10905
Joined: Sat Oct 04, 2008 11:42 am

Re: How much $ savings needed to change car insurance compan

Post by DSInvestor » Sat May 31, 2014 8:34 pm

I have GEICO auto and umbrella policies and am pleased with their service.

If you move auto insurance to another company, will that affect your other policies like umbrella or homeowners? Some companies offer multiline discounts. Maybe get quotes from GEICO for the homeowner and umbrella too.
Wiki

Retread
Posts: 703
Joined: Mon Apr 08, 2013 6:29 pm
Location: Southwest Florida

Re: How much $ savings needed to change car insurance compan

Post by Retread » Sat May 31, 2014 8:42 pm

I feel your number of years with a company can be factor. I hope Amica will show me some loyalty if I ever need it, after having my auto coverage with them for nearly 50 years. I wouldn't change carriers for almost any savings.
Bruce
absit iniuria verbis

fsrph
Posts: 1009
Joined: Sun Jul 26, 2009 7:54 pm
Location: Pa.

Re: How much $ savings needed to change car insurance compan

Post by fsrph » Sat May 31, 2014 8:50 pm

DSInvestor wrote:I have GEICO auto and umbrella policies and am pleased with their service.

If you move auto insurance to another company, will that affect your other policies like umbrella or homeowners? Some companies offer multiline discounts. Maybe get quotes from GEICO for the homeowner and umbrella too.
Good advice. I tried to obtain a homeowners insurance quote from GEICO. Since I live in Pennsylvania they referred me to Liberty Mutual. Said they partnered with Liberty Mutual for Pa customers. I guess GEICO doesn't write property insurance in Pa..

Francis
"Success is getting what you want. Happiness is wanting what you get." | Dale Carnegie

User avatar
roymeo
Posts: 1244
Joined: Sat Apr 28, 2007 7:19 pm
Location: Oakland, CA
Contact:

Re: How much $ savings needed to change car insurance compan

Post by roymeo » Sat May 31, 2014 9:00 pm

"I've been with my personal investment adviser for many years, and though s/he costs a bit more than another adviser/doing it myself, I think the service I get there is worth the extra $$$ I pay. Besides, over the years we've built up such a good rapport, s/he even sends me Xmas cards."

I've had to use GEICO, Esurance, State Fram and probably some others over the past 25 years, about the biggest hassle I've encountered was when it was 'the other guy's' insurance company (ATL, SF) that required me to take my car to a location that was 30 miles away (and it didn't dawn on me to get them to choose someone closer). I'm not sure what 'service' that would be differentiable I could possibly need, nor am I sure that other than the 'been with us for 2 years' minor discount that many use the number of years I've been with them really counts when they start looking at their actuarial tables and payout rates. I'm amazed that someone would feel a warm spot in their heart for a service that they've paid for for years and luckily never used.

If I ran the numbers and could save $25 every 6 months I'd switch.

roymeo
Last edited by roymeo on Sat May 31, 2014 9:05 pm, edited 2 times in total.
The sewer system is a form of welfare state. | -- "Libra", Don DeLillo

fsrph
Posts: 1009
Joined: Sun Jul 26, 2009 7:54 pm
Location: Pa.

Re: How much $ savings needed to change car insurance compan

Post by fsrph » Sat May 31, 2014 9:02 pm

Retread wrote:I feel your number of years with a company can be factor. I hope Amica will show me some loyalty if I ever need it, after having my auto coverage with them for nearly 50 years. I wouldn't change carriers for almost any savings.
Bruce
I was hoping loyalty at State Farm would mean something. But, I'm not sure it does. No accidents or claims for as long as I can remember. Yet costs creep up every renewal. So, I try GEICO and Progressive and their quotes are much lower. In my previous post others claimed GEICO kept rates about the same at renewal time so the initial rate wasn't a teaser.

Francis
"Success is getting what you want. Happiness is wanting what you get." | Dale Carnegie

User avatar
Go Blue 99
Posts: 830
Joined: Thu Oct 09, 2008 3:42 pm

Re: How much $ savings needed to change car insurance compan

Post by Go Blue 99 » Sat May 31, 2014 9:31 pm

I was a MetLife customer for 15+ years until I moved to Geico a few months ago. My rate went down 40%. So far I am happy with Geico service and their website (MetLife site had the feel of a mid 90s site).

Quickfoot
Posts: 1002
Joined: Fri Jan 11, 2013 1:03 pm

Re: How much $ savings needed to change car insurance compan

Post by Quickfoot » Sat May 31, 2014 9:40 pm

I was hoping loyalty at State Farm would mean something. But, I'm not sure it does.
It doesn't, insurance companies literally don't care about loyalty and they use loyalty programs to get people to stay when they could get cheaper rates elsewhere (there was recently an article about how little loyalty means to insurance companies). Geico is a good insurance company (had them almost 15 years now), they handle claims well and treat their customers well, if you can save money with them I'd say go for it.

People get emotionally attached to things like cars, houses, insurance companies, etc and in the end it generally unnecessarily costs people money.
In my previous post others claimed GEICO kept rates about the same at renewal time so the initial rate wasn't a teaser.
Geico does not do teaser rates. In fact just dropped my rates 40% because of a new risk table for my state. Prior to that the rates tended to stay stable or go down a little bit each renewal period.

User avatar
GerryL
Posts: 1956
Joined: Fri Sep 20, 2013 11:40 pm

Re: How much $ savings needed to change car insurance compan

Post by GerryL » Sat May 31, 2014 10:01 pm

I recently switched my auto insurance from Farmers to USAA and am saving about $200 a year, even though my Farmers' home owners insurance will go up a bit since I am no longer bundled. I have been with the same Farmers agent for 24 years and never shopped around, but with constantly rising prices, it made sense to finally check out other insurance providers. Loyalty counts for little/nothing. There was not even a discussion about trying to get my premium down.

donall
Posts: 811
Joined: Tue Mar 13, 2012 6:45 am

Re: How much $ savings needed to change car insurance compan

Post by donall » Sat May 31, 2014 11:35 pm

Not a fan of Farmers, as they seem to have high rates for homeowner's insurance when compared to other companies. Even State Farm had rates that were 50% lower than Farmers.

Sandman62
Posts: 99
Joined: Wed Feb 06, 2013 3:22 pm
Location: Rhode Island

Re: How much $ savings needed to change car insurance compan

Post by Sandman62 » Sun Jun 01, 2014 10:31 am

Retread wrote:I feel your number of years with a company can be factor. I hope Amica will show me some loyalty if I ever need it, after having my auto coverage with them for nearly 50 years. I wouldn't change carriers for almost any savings.
Bruce
+1

I'm always amazed that people shop for insurance as if all they're buying is the piece of paper with the same coverages and deductibles as other companies. IMO, maybe the focus should be on the service you'll receive if/when you suffer claims. At that point, not all companies will be the same.

Longdog
Posts: 1139
Joined: Sun Feb 09, 2014 6:56 pm
Location: Philadelphia

Re: How much $ savings needed to change car insurance compan

Post by Longdog » Sun Jun 01, 2014 10:47 am

It's a very competitive business, and each company/agent should work hard to retain you and attract new customers. If loyalty meant something to the company, they'd offer you a price that is very competitive with the alternatives. If their price is significantly more than a reasonable alternative, that doesn't sound very loyal on their part to me. It sounds exploitive. I tend to shop around when the annual premium I'm offered jumps more than about 5%, if for no other reason than to verify that their price is still competitive. Competitive doesn't necessarily mean lower, but if the price differences are significant, I'd ask a lot of questions to understand why. In the last 25 years, I've had three companies and I've been satisfied with each of them - I actually am reasonably loyal, as long as I feel it's a reciprocated.

I'd say if the price savings is 10% or more and the service is expected to be comparable, give your current company the opportunity to improve their price, and if they can't then make the switch but understand the whole picture. That's the extent of my loyalty - giving my current company the right of first refusal.
Steve

kenner
Posts: 3129
Joined: Sat Mar 01, 2008 8:45 am

Re: How much $ savings needed to change car insurance compan

Post by kenner » Sun Jun 01, 2014 10:59 am

Over the last 40 years, I first had car insurance with State Farm and, later, GEICO. They are both top-notch companies with equally high-quality service (I sue insurance companies for a living).

Without any hesitation whatsoever, I would opt for the lower price of GEICO, unless I had an overriding need to stay with my local State Farm agent of many years.

Sandman62
Posts: 99
Joined: Wed Feb 06, 2013 3:22 pm
Location: Rhode Island

Re: How much $ savings needed to change car insurance compan

Post by Sandman62 » Sun Jun 01, 2014 11:05 am

But do we buy ALL services based on price alone? If I hire a carpenter, I ask around about quality of work, reliability, the quality of materials used, etc. Maybe if we're buying something that truly is the same no matter where we buy it, then price is paramount - like a book or a car. But services are different than products, with lots of room for variation in the levels received. Focusing on price alone doesn't really make for an apples to apples comparison. Of course, as long as we can go without claims for many years/decades, then we may feel like we're ahead due to lower premiums paid.

But all it takes is a claim or two, and the potential for a very unpleasant experience as we attempt to get the company to make good on all those premiums, and then we might realize that what we paid for all those years really was cheaper for a reason.

maroon
Posts: 321
Joined: Tue Sep 08, 2009 11:59 pm

Re: How much $ savings needed to change car insurance compan

Post by maroon » Sun Jun 01, 2014 11:18 am

I was a State Farm customer for many years (15 years, maybe?). When I finally decided to shop around, I was shocked at how much I could save going elsewhere!

These days it's hard to switch, as I have multiple insurance products (auto, homeowner's, etc.) and my policy is via my employer (payroll deduction). I did call around for quotes and found I could save a minimal amount (~$100) for switching. It just wasn't worth it to me for the hassle.

User avatar
Toons
Posts: 13054
Joined: Fri Nov 21, 2008 10:20 am
Location: Hills of Tennessee

Re: How much $ savings needed to change car insurance compan

Post by Toons » Sun Jun 01, 2014 11:57 am

For a 32 percent savings which is what you are showing with the numbers that you posted it is a no brainer, I would switch :happy
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

User avatar
roymeo
Posts: 1244
Joined: Sat Apr 28, 2007 7:19 pm
Location: Oakland, CA
Contact:

Re: How much $ savings needed to change car insurance compan

Post by roymeo » Sun Jun 01, 2014 8:42 pm

Sandman62 wrote:
Retread wrote:I feel your number of years with a company can be factor. I hope Amica will show me some loyalty if I ever need it, after having my auto coverage with them for nearly 50 years. I wouldn't change carriers for almost any savings.
Bruce
+1

I'm always amazed that people shop for insurance as if all they're buying is the piece of paper with the same coverages and deductibles as other companies. IMO, maybe the focus should be on the service you'll receive if/when you suffer claims. At that point, not all companies will be the same.

And quoting myself earlier in the thread:
roymeo wrote:I've had to use GEICO, Esurance, State Fram and probably some others over the past 25 years, about the biggest hassle I've encountered was when it was 'the other guy's' insurance company (ATL, SF) that required me to take my car to a location that was 30 miles away (and it didn't dawn on me to get them to choose someone closer). I'm not sure what 'service' that would be differentiable I could possibly need, nor am I sure that other than the 'been with us for 2 years' minor discount that many use the number of years I've been with them really counts when they start looking at their actuarial tables and payout rates. I'm amazed that someone would feel a warm spot in their heart for a service that they've paid for for years and luckily never used.
What's this magic 'service' thing that I'm missing by using Geico?
The sewer system is a form of welfare state. | -- "Libra", Don DeLillo

Sandman62
Posts: 99
Joined: Wed Feb 06, 2013 3:22 pm
Location: Rhode Island

Re: How much $ savings needed to change car insurance compan

Post by Sandman62 » Mon Jun 02, 2014 8:16 am

roymeo wrote:What's this magic 'service' thing that I'm missing by using Geico?
Have you much claims experience?

User avatar
midareff
Posts: 5855
Joined: Mon Nov 29, 2010 10:43 am
Location: Biscayne Bay, South Florida

Re: How much $ savings needed to change car insurance compan

Post by midareff » Mon Jun 02, 2014 8:22 am

fsrph wrote:I was thinking about changing car insurance companies. Details are in my previous post http://www.bogleheads.org/forum/viewtop ... 2&t=139189 .

I received my renewal notice from State Farm and know what the savings will be. These quotes are for the exact same coverage.

State Farm
$740 per year

GEICO
$500 per year

This seems like its worth switching to GEICO. What savings would a Boglehead need to change car insurance companies? I know, the Boglehead answer is $1, but realistically how much savings would you need. I would be losing my local State Farm agent with local service. But the savings seem to justify the switch? Am I thinking right?

Francis

I switched to Geico about two years ago when their price was near half of Liberty Mutual, who I had been with 45 years. I figured they would raise the price at renewal time but they didn't, and it is two renewas now with no increase. I think very highly of them and would save the money by switching right now IMHO.

User avatar
midareff
Posts: 5855
Joined: Mon Nov 29, 2010 10:43 am
Location: Biscayne Bay, South Florida

Re: How much $ savings needed to change car insurance compan

Post by midareff » Mon Jun 02, 2014 8:33 am

Retread wrote:I feel your number of years with a company can be factor. I hope Amica will show me some loyalty if I ever need it, after having my auto coverage with them for nearly 50 years. I wouldn't change carriers for almost any savings.
Bruce

I felt that way with Liberty Mutual ... since I was 16 .. near 47 or 48 years until I switched about 2 years ago. When I decided to quote coverage after a proposed large increase for a new car I was amazed at how badly I had been getting scxxwed. They offered to rewrite the policy at about 60% of the proposed renewal price but Geico was far less expensive that that. Then I checked my homeowner's coverage and found I could save another $500+ a year by changing from Liberty on that coverage as well. Now it's anyone rated top or near the top who actually does pay claims and offers a great price. .. (have not had a claim in almost forever but you never know).

DVA79
Posts: 23
Joined: Sun Apr 06, 2014 1:06 pm

Re: How much $ savings needed to change car insurance compan

Post by DVA79 » Mon Jun 02, 2014 8:39 am

I just switched from SF to Geico about two weeks ago. I am 34, never had a claim or ticket and my rates with them went up every year. Was paying about 900/year for two cars, now paying 450/year for same coverage. I too got a Xmas card every year from my SF guy--nice gesture but not worth $450. No brainer switch for me.

I also switched my house insurance to them (underwritten by Liberty Mutual). About $200 less a year plus I got a discount for having both policies with Geico.


placeholder
Posts: 3958
Joined: Tue Aug 06, 2013 12:43 pm

Re: How much $ savings needed to change car insurance compan

Post by placeholder » Mon Jun 02, 2014 12:21 pm

Sandman62 wrote:But all it takes is a claim or two, and the potential for a very unpleasant experience as we attempt to get the company to make good on all those premiums, and then we might realize that what we paid for all those years really was cheaper for a reason.
You're making an assumption that higher cost companies will provide superior service but what is that based on?

Quickfoot
Posts: 1002
Joined: Fri Jan 11, 2013 1:03 pm

Re: How much $ savings needed to change car insurance compan

Post by Quickfoot » Mon Jun 02, 2014 12:45 pm

Geico offers local agents in many locations, has extremely high customer satisfaction and has outstanding claims service and processing. You will not get better service from another company but you are likely to pay more for worse or the same quality of service.

User avatar
prudent
Moderator
Posts: 5774
Joined: Fri May 20, 2011 2:50 pm

Re: How much $ savings needed to change car insurance compan

Post by prudent » Mon Jun 02, 2014 1:06 pm

I researched the heck out of companies before changing insurers not long ago. What I found was that every company (even the highly regarded USAA, GEICO, Amica and others) had complaints as well as happy customers. Every company had people who went through a miserable claims experience and people who were happy. I think it's a crapshoot to some degree. Claims are processed by individuals who have an impact on what your experience will be, and there's no guarantee that the companies who have the highest rated satisfaction level will make YOUR claims experience great.

So my conclusion is that as long as I stick to companies with generally good reviews to put the odds in my favor, I'm going to switch to save money, and I don't see a need to pay more for any of them. They all give discounts to new customers that existing customers don't get, so that tells me loyalty isn't a factor. I believe insurers would rather fight to steal other insurers' customers rather than incent existing customers to stay - probably because they have found most customers don't shop their business often. (Cable/internet business model)

cyfan
Posts: 75
Joined: Wed Feb 02, 2011 11:53 pm

Re: How much $ savings needed to change car insurance compan

Post by cyfan » Mon Jun 02, 2014 1:32 pm

I am not sure why all the attention to local agents. Local agents are primarily sales people and add a layer of expenses which must be recovered in premiums. With or without a local agent, claims are typically handled by a separate group and any large company will have local body shops that they partner with for estimates and repairs. I have been through the claims process with Nationwide direct and the service has been great. I have not had a local agent in over 30 years and see no need to use a company that utilizes them. I tend to think of them the same as a local financial advisor -- not needed, do not want to pay for it.

User avatar
potatoman
Posts: 92
Joined: Fri May 30, 2014 8:41 pm

Re: How much $ savings needed to change car insurance compan

Post by potatoman » Mon Jun 02, 2014 1:45 pm

midareff wrote:I felt that way with Liberty Mutual ... since I was 16 .. near 47 or 48 years until I switched about 2 years ago. When I decided to quote coverage after a proposed large increase for a new car I was amazed at how badly I had been getting scxxwed. They offered to rewrite the policy at about 60% of the proposed renewal price...
I had a similar experience. I've been a GEICO customer for 10 years and had been paying roughly $500 for 6 months of auto insurance. For one reason or another, I decided to get a Farmers Insurance quote for roughly the same amount of coverage and it came in at just around $320 for 6 months. I promptly called GEICO and told them I found a better quote with Farmers and wanted to cancel....the rep transferred me to the cancellation dept and she immediately said "no problem, but first let me check if I can reduce your rate. Oh I can cut your rate just about in half to $265". I felt like an idiot for overpaying (probably for at least 5 years) but took the rate cut and stayed with GEICO anyway.

User avatar
roymeo
Posts: 1244
Joined: Sat Apr 28, 2007 7:19 pm
Location: Oakland, CA
Contact:

Re: How much $ savings needed to change car insurance compan

Post by roymeo » Mon Jun 02, 2014 3:21 pm

Sandman62 wrote:
roymeo wrote:What's this magic 'service' thing that I'm missing by using Geico?
Have you much claims experience?
That's what I meant by "had to use", which wasn't very clear in my original and self-quoted post, I suppose.

Though I don't get into that many accidents so I had to span 25 years of driving.

How many 100's or 1000's of dollars is this very hard to measure awesome service worth? Do you pay for that sort of service in investment land?
The sewer system is a form of welfare state. | -- "Libra", Don DeLillo

Sandman62
Posts: 99
Joined: Wed Feb 06, 2013 3:22 pm
Location: Rhode Island

Re: How much $ savings needed to change car insurance compan

Post by Sandman62 » Mon Jun 02, 2014 4:52 pm

placeholder wrote:
Sandman62 wrote:But all it takes is a claim or two, and the potential for a very unpleasant experience as we attempt to get the company to make good on all those premiums, and then we might realize that what we paid for all those years really was cheaper for a reason.
You're making an assumption that higher cost companies will provide superior service but what is that based on?
I don't mean to imply that. Rather, just that we maybe shouldn't automatically exclude higher-priced ones, assuming that they aren't worth the extra they charge.

Enkidu
Posts: 198
Joined: Mon Jun 02, 2014 8:48 am

Re: How much $ savings needed to change car insurance compan

Post by Enkidu » Mon Jun 02, 2014 7:41 pm

I am currently shopping for insurance, and have settled on Auto-Owners for home, auto, umbrella. I have been with State Farm for 15 years, but the original agent that I signed with retired. Since then I have had two new agents and my premiums have gone up substantially. I also felt that my coverage was not right. I found an independent agent who looked at my situation and recommended Auto-Owners. Consumer Reports gives them a high rating- among the top 5 for both HO and auto, but I have not heard much about them. The premiums are a bit higher, but the coverage is substantially better.

I can't do a straight across comparison because I am adding $2 million in umbrella coverage, and the coverage of auto and homeowners, including UIM are much higher. The policy is about $200 higher per year, but seems like a reasonable deal, considering the coverage. Hopefully the service and claims support will be acceptable. I probably should have changed a few years ago when my agent retired, and the rate went way up.

Post Reply