UPDATE: Moving from USAA/GEICO to Farmer's, Travelers, or TX Farm Bureau

[BobStrauss]

EDITED for updates:

Currently paying ~ $3593 annually for home + auto: $1002 per 6 month policy for auto at GEICO and $1589 for annual homeowners with USAA. For whatever reason it's more expensive to bundle with either one, and many of the major providers can't beat those prices at same coverage rates.

Options:

A) Farmer's homeowners only + keeping GEICO is ~ $2949 annually: $1002 per 6 month auto policy + $920 homeowners at same rates + $25 one-time fee.

B) Texas Farm Bureau home + auto is ~ $2992 annually: $960 per 6 month auto policy and $1072 homeowners (for a slightly reduced policy).

C) Travelers home + auto is ~ $3165 annually: $1099 per 6 month auto policy (for slightly less coverage, 250/500 auto instead of 300/500 w/GEICO) and $967 homeowners.

I'm guessing TX Farm Bureau might have best rep of the three homeowners options but option A seems like the best deal. Any thoughts?

[sperry8]

Bad idea?

We're currently paying ~ $1050 per 6 month policy for auto at GEICO and ~ $1600 for annual homeowners with USAA. For whatever reason it's more expensive to bundle with either one, and many of the major providers can't beat those prices at same coverage rates.

Recently tried GABI, PolicyGenius, as well as getting direct quotes from major providers and Lemonade to see if potential for savings were there, given how our premiums had crept up in recent years.

Just switching to Lemonade homeowners would save us $475 annually with an even lower deductible ($1000 instead of $2000 currently).

Travelers homeowners bundled with auto would save us about $650 annually.

There's another insurer - Mercury - that would save us about $650 for bundled home and auto as well.

Our previous experiences with GEICO and USAA have been positive, but obviously saving hundreds would be positive as well. Any words of wisdom from the board on this? Especially those with experience with these companies or the insurance industry in general?

I'm not familiar with Lemonade but Travelers is a venerable company and if it saved me $650 annually, I'd switch.

[JoMoney]

I use Lemonade for my renters insurance. They were the cheapest place I could find. I have know idea about their ratings or solvency as a company, which is important for most people when buying insurance, but wasn't for me, because I didn't care about having the policy other than to fulfill the landlords requirement that I have a certain amount of renters liability coverage.
I also can't tell you anything about there customer service, they pretty much force you to do everything on their web page or app, which is simple enough to use, and I didn't have any problems, but I'm not sure what it would be like if I had to get someone on the phone.

[galawdawg]

Lemonade for insurance, Kabbage for banking...what's next? Hamburger for your investments??

Personally, I'd stick with very well-respected insurance companies with a long track record of taking care of their policyholders. If you haven't already done so, you may wish to contact an independent insurance agent and have them also run some quotes for you.

I was with USAA for decades but found that they were no longer competitive in the marketplace and I personally found their service over the recent decade to be...lacking. I saved significantly when I left for another very well-respected insurer.

[an_asker]

Lemonade for insurance, Kabbage for banking...what's next? Hamburger for your investments??
[...]

Robinhood actually precedes these folks, no? And there's TastyWorks too

[atdharris]

I've always been hesitant to leave USAA because they have been so easy to work with when I actually needed to file an insurance claim. I have friends who practice PI law and they always tell me how USAA fights the hardest to defend their clients versus someone like Geico or State Farm. That's part of the reason why I stayed with USAA even though I could save $700/year in auto insurance.

[talzara]

Just switching to Lemonade homeowners would save us $475 annually with an even lower deductible ($1000 instead of $2000 currently).

Lemonade is an insurtech that had a profit margin of -241% in 2021. At its current burn rate, it has 3-4 years of runway left before it goes bankrupt.

The company has a very large presence on social media, insurance shopping sites, and other nontraditional channels. That's why there are so many threads on Bogleheads about Lemonade, and it's also why it loses so much money. Lemonade's sales & marketing expenses are 110% of revenues, so it's unprofitable even before paying any claims.

If you buy a policy from Lemonade, you should read the annual report every year and be prepared to switch 1-2 years before it goes bankrupt. Although there are state guaranty associations, homeowners often experience delays of several months if they have a claim in process when their insurance company goes bankrupt.

Lemonade for insurance, Kabbage for banking...what's next? Hamburger for your investments??

Robinhood actually precedes these folks, no? And there's TastyWorks too

So far, Lemonade has been able to raise every time it was about to run out of cash. However, the market has been skeptical of unprofitable "tech" companies recently.

Lemonade stock has fallen by over 70% since its IPO. If the situation does not improve, the company may have a harder time doing a secondary offering in the future.

[mkc]

Bad idea?

We're currently paying ~ $1050 per 6 month policy for auto at GEICO and ~ $1600 for annual homeowners with USAA. For whatever reason it's more expensive to bundle with either one, and many of the major providers can't beat those prices at same coverage rates.

Recently tried GABI, PolicyGenius, as well as getting direct quotes from major providers and Lemonade to see if potential for savings were there, given how our premiums had crept up in recent years.

Just switching to Lemonade homeowners would save us $475 annually with an even lower deductible ($1000 instead of $2000 currently).

Travelers homeowners bundled with auto would save us about $650 annually.

There's another insurer - Mercury - that would save us about $650 for bundled home and auto as well.

Our previous experiences with GEICO and USAA have been positive, but obviously saving hundreds would be positive as well. Any words of wisdom from the board on this? Especially those with experience with these companies or the insurance industry in general?

I'm not familiar with Lemonade but Travelers is a venerable company and if it saved me $650 annually, I'd switch.

Particularly if the homeowner's is guaranteed replacement coverage. Not every company offers it, but Travelers is one that does (in some states)

[teamDE]

I recently saved $900/yr by switching from Liberty Mutual to USAA. I didn't quote Lemonade, but I feel pretty good about the savings and the "quality" behind USAA. I now also have more coverage, a higher "bonus" level of coverage and a lower deductible than before.

Fwiw, USAA was the same as GEICO for auto insurance, but I switched anyways to keep it all together.

[talzara]

I use Lemonade for my renters insurance. They were the cheapest place I could find. I have know idea about their ratings or solvency as a company, which is important for most people when buying insurance, but wasn't for me, because I didn't care about having the policy other than to fulfill the landlords requirement that I have a certain amount of renters liability coverage.

That's another reason that Lemonade is so unprofitable. Lemonade has a much higher percentage of renters insurance policies than other homeowners insurers.

Renters insurance has much lower premiums than homeowners insurance, but it costs almost as much to acquire customers through advertising. That's why other insurance companies are not willing to spend much on advertising. They prefer to acquire their renters insurance policies for free by selling it to their auto insurance customers

When Lemonade started advertising renters insurance heavily, it had the field almost to itself. It was able to grow quickly, but it was using a strategy that other insurance companies already knew was unprofitable. However, if you call yourself an insurtech company instead of an insurance company, then investors will accept heavy losses as the price of growth.

[talzara]

I've always been hesitant to leave USAA because they have been so easy to work with when I actually needed to file an insurance claim. I have friends who practice PI law and they always tell me how USAA fights the hardest to defend their clients versus someone like Geico or State Farm. That's part of the reason why I stayed with USAA even though I could save $700/year in auto insurance.

USAA is always ranked #1, #2, or #3 in the J.D. Power surveys of auto and homeowners insurance claims satisfaction, along with Amica. The third company changes from year to year, but Amica and USAA are always at the top.

I'm not familiar with Lemonade but Travelers is a venerable company and if it saved me $650 annually, I'd switch.

Travelers is usually ranked in the bottom half of the J.D. Power surveys of homeowners insurance claims satisfaction. Its ranking jumps around from year to year, but it's never at the top.

It is a venerable company, and it is very safe. Travelers has an A.M. Best rating of A++, the highest notch. (As usual, Florida is not included in the rating because it is insured by a single-state non-pooled subsidiary.)

[Northern Flicker]

I believe there are 4 casualty insurers with AM Best ratings of A++

State Farm
GEICO
USAA
Travelers

[JoMoney]

I use Lemonade for my renters insurance. They were the cheapest place I could find. I have know idea about their ratings or solvency as a company, which is important for most people when buying insurance, but wasn't for me, because I didn't care about having the policy other than to fulfill the landlords requirement that I have a certain amount of renters liability coverage.

That's another reason that Lemonade is so unprofitable. Lemonade has a much higher percentage of renters insurance policies than other homeowners insurers.

Renters insurance has much lower premiums than homeowners insurance, but it costs almost as much to acquire customers through advertising. That's why other insurance companies are not willing to spend much on advertising. They prefer to acquire their renters insurance policies for free by selling it to their auto insurance customers

When Lemonade started advertising renters insurance heavily, it had the field almost to itself. It was able to grow quickly, but it was using a strategy that other insurance companies already knew was unprofitable. However, if you call yourself an insurtech company instead of an insurance company, then investors will accept heavy losses as the price of growth.

I was baffled when Lemonade insurance went IPO, the company presented itself to customers as not only being low-cost choice, but that they would be donating at least some portion of profits to worthy causes. I thought it was supposed to be run like some sort of non-profit or mutual insurance company. Who would want to own stock in that

[Evergreen2022]

I have Lemonade for homeowners with a pool add-on, it’s extremely user friendly and easy to get set up. I personally think it’s a cool concept and they are taking their shot at disrupting home and eventually auto markets. Yes, they are burning a ton of cash and are unprofitable. I’ve never had a claim so I can’t speak in that respect. They were actually one of the few companies to underwrite at a reasonable price (house from the 1920’s, slate roof etc etc).

[BobStrauss]

Bump. Original post updated.. Lemonade dropped from consideration, a few others added. Any final thoughts would be much appreciated.

[snackdog]

If you are going to leave a great insurer, go for the lowest rate you can get to make it worth your while.

[Northern Flicker]

Lowest premium may not be lowest cost once the claims experience is factored in. I generally no longer even consider companies other than State Farm, USAA, and Amica when comparing quotes. (I haven’t decided if I will add GEICO to my list of acceptable insurers as I don’t like that they will not offer homeowner’s coverage).

[tj]

Lowest premium may not be lowest cost once the claims experience is factored in. I generally no longer even consider companies other than State Farm, USAA, and Amica when comparing quotes. (I haven’t decided if I will add GEICO to my list of acceptable insurers as I don’t like that they will not offer homeowner’s coverage).

Why would other established companies like farmers, allstate, American family, auto owners, liberty mutual be unacceptable?