Author Topic: State Farm increased my auto insurance by 50% for no good reason!  (Read 2472 times)

Tuskalusa

  • Stubble
  • **
  • Posts: 115
State Farm increased my auto insurance by 50% for no good reason!
« on: September 02, 2017, 10:45:02 PM »
Ok. This is a rant with a question.

I got a letter from State Farm saying that are now using Consumer Reports data for their rate analyses, and my insurance has gone up as a result. It went up by 50%. This is a 10-year-old car and I have a clean driving record. What the heck is up with that?

Has anyone else seen this happen?

I will switch, cuz this is just robbery. But I don't really see the logic of the increase. Seems like they're gonna tick off a lot of customers. Any idea what's going on here?

EarthSurfer

  • Stubble
  • **
  • Posts: 126
  • Location: 5280
Re: State Farm increased my auto insurance by 50% for no good reason!
« Reply #1 on: September 03, 2017, 06:39:51 AM »
With a clean driving and claim record, you should be comparison shopping every two years. Consider this a nudge from State Farm to check your insurance pricing.

Scan the summary of coverage document, and contact a few independent agents who can make cost comparisons for you.  Include any homeowners, renters, or umbrella policies. 

I re-bid my entire insurance package 5 years ago when I purchased a new primary residence and converted another condo to a rental. I had a homeowners, 2 rental properties, auto with full coverage, some business insurance, and a $2,000,000 umbrella policies. At the time I was a decade long State Farm customer, but I couldn't ignore the 40% lower quote from both Nationwide and Travelers.

While I'm certain I won't have the high touch claims service of State Farm, I have the financial reserves and patience to wait, and the tenaciousness to fight for proper reimbursement for a loss.

I have never had a large personal claim, but I have managed a large claim dispute as treasurer for an HOA. I learned that even "high touch" insurers don't necessarily pay out the full claim without some negotiating.

Retired early, retired often since 1998...

YttriumNitrate

  • Stubble
  • **
  • Posts: 149
  • Location: Northwest Indiana
Re: State Farm increased my auto insurance by 50% for no good reason!
« Reply #2 on: September 03, 2017, 07:38:27 AM »
I switched cars/home insurance from State Farm a few months ago. It seems like insurance companies have taken up the Cable Company business model where they offer good starting rates, but then jack up your rates until you switch...I've already set a June 2021 reminder in Outlook to switch again.

Tuskalusa

  • Stubble
  • **
  • Posts: 115
Re: State Farm increased my auto insurance by 50% for no good reason!
« Reply #3 on: September 03, 2017, 09:06:27 AM »
Thanks for the advice. I've been hesitant to switch because of the high-touch customer service. But it's too hard to ignore the cost differences. Appreciate the advice.

moof

  • Bristles
  • ***
  • Posts: 385
  • Location: Beaver Town Orygun
Re: State Farm increased my auto insurance by 50% for no good reason!
« Reply #4 on: September 07, 2017, 03:12:06 PM »
Worth looking around now and then.  We switched to Ameriprise 3 years back, and it was a good 40% lower than the quote we got from Esurance for adding a used car to our stable.  We also switched home insurance, and that saved almost 50% a year.

ObviouslyNotAGolfer

  • 5 O'Clock Shadow
  • *
  • Posts: 80
Re: State Farm increased my auto insurance by 50% for no good reason!
« Reply #5 on: September 08, 2017, 02:56:43 PM »
21st Century (owned by State Farm, I think?), who I have used for years, continued to jack up my rates for no reason whatsoever (no accidents, tickets, points or anything in 20+ years!). My July renewal was another 150$ or so higher than the previous six month period, so I just switched to Geico and saved about $180 over what I would have paid with 21st. Sucka brand loyalty keeps many people tied into bad companies, and bad deals.

alexstjo26

  • 5 O'Clock Shadow
  • *
  • Posts: 5
Re: State Farm increased my auto insurance by 50% for no good reason!
« Reply #6 on: September 10, 2017, 02:31:19 PM »
If you live in CA or Oregon try wawanessa insurance.

ender

  • Magnum Stache
  • ******
  • Posts: 3893
Re: State Farm increased my auto insurance by 50% for no good reason!
« Reply #7 on: September 10, 2017, 05:49:24 PM »
I had similar issues with USAA and when I called them at length to talk through things, the rep I talked with indicated there were significant additional claims in my state over the past few years, resulting in insurance bumps.

It might be something similar. We just switched and saved a bunch though, since... I think it would have been $400/year more to have USAA for auto/homeowners (compared to Amica). I think Geico would be slightly cheaper than that, too?

JLE1990

  • 5 O'Clock Shadow
  • *
  • Posts: 19
Re: State Farm increased my auto insurance by 50% for no good reason!
« Reply #8 on: September 20, 2017, 04:46:33 PM »
I might be able to provide a little insight into this. In 2015 state farm lost most of it's profit on the auto side(from 7billion to 400mil). When gas prices plummeted everyone and their mother decided to start driving, this of course caused more accidents. Newer vehicles are also much more expensive to fix. Of course neither of these are your fault but insurance is based on crowdsourcing so while you are a good driver and never hit anyone, there's lots of SF customers out there who are terrible and run into shit all the time. They have to pay out on those claims and that money has to come from premiums of good drivers.

I'm not sure why people seem to have such a "used car salesman" mentality towards insurance. It's highly regulated, any rate changes must be approved by your state's insurance dept. and the submission has to show a statistical reasoning behind the rate change. There's some shittiness, but not more than in any other industry.

SF, Farmers, Allstate have all significantly tightened their book of business and are actively trying to cast off bad risks etc. by raising rates on any vehicle models or profiles that have bad risk histories. It's very possible that you have a vehicle that younger drivers or careless drivers typically have, causing them to raise your rates based on that model.

One other note is that it's not just tickets and accidents but your rates are also based on your consumer reports. I doubt there's any problems there for you but if someone just finished paying off a debt it might be a good time to get new quotes.
« Last Edit: September 20, 2017, 05:28:46 PM by JLE1990 »

chasesfish

  • Handlebar Stache
  • *****
  • Posts: 1725
  • Location: Texas
    • Years in the making, I created a journal!
Re: State Farm increased my auto insurance by 50% for no good reason!
« Reply #9 on: September 23, 2017, 05:42:01 AM »
I've found I have to competitively shop rates every 2-3 years.  Auto Insurance seems to creep up every year, then I someone is an outlier on price, switch to them, and they raise prices back to the median over a few years.

I'll consider anyone but Geico, maybe most of their employees/claim representatives are fine, but I was treated unprofessionally five years ago when one of their insured drivers hit me.
Counting down the days until I Stop Ironing Shirts

I occasionally Blog

Ocinfo

  • Bristles
  • ***
  • Posts: 251
Re: State Farm increased my auto insurance by 50% for no good reason!
« Reply #10 on: September 23, 2017, 06:20:40 AM »
I dropped State Farm last March after 16 years (only car insurance I ever had). The rates kept going up for no discernible reason (no accidents, high credit score, etc.). I ended up with Geico and cut my rate from $600 to $240 per 6 months with higher coverage limits.

My 6 month renewal just happened and Geico wanted $20 more. I started messing with coverage amounts on their app and was able to raise the deductible to $1k (car is paid off but worth $10k so still worth having collision/comprehensive for now) and up liability to $1 million. I still have renters and a landlord policy through State Farm as they are actually still cheap for those policies.


Sent from my iPhone using Tapatalk

Tuskalusa

  • Stubble
  • **
  • Posts: 115
Re: State Farm increased my auto insurance by 50% for no good reason!
« Reply #11 on: October 01, 2017, 10:41:44 PM »
Did you have other policies with State Farm?  My challenge is that I'm afraid of seeing my rates go up on my homeowners and umbrella policies if I move my auto?  Am I overthinking it?

Dicey

  • Walrus Stache
  • *******
  • Posts: 6245
  • Age: 59
  • Location: NorCal
Re: State Farm increased my auto insurance by 50% for no good reason!
« Reply #12 on: October 01, 2017, 10:47:25 PM »
If you live in CA or Oregon try wawanessa insurance.
It's WAWANESA, and they're awesome. It's a Canadian company, with limited coverage in the US. Did I mention they're awesome? Yes.
I did it! I have a journal!
A Lot Like This
And hell yes, I am still moving confidently in the direction of my dreams...

chasesfish

  • Handlebar Stache
  • *****
  • Posts: 1725
  • Location: Texas
    • Years in the making, I created a journal!
Re: State Farm increased my auto insurance by 50% for no good reason!
« Reply #13 on: October 02, 2017, 03:48:16 AM »
I forgot to mention, State Farm is a mutual company.  They're really a giant not for profit and have to charge enough to cover losses.

I think their large increases all their clients are experiencing are from bad management and poor underwriting a few years ago and now trying to catch up.  Thats not easy to do when you can easily switch.

I changed to another not for profit, Liberty Mutual, now I'm seeing the same trend
Counting down the days until I Stop Ironing Shirts

I occasionally Blog

dogboyslim

  • Bristles
  • ***
  • Posts: 268
Re: State Farm increased my auto insurance by 50% for no good reason!
« Reply #14 on: October 02, 2017, 05:41:58 PM »
... now using Consumer Reports data for their rate analyses,...

In the letter that said they are now using consumer reports, there is likely a phone number where you can call and make sure there isn't anything that is incorrect in the reports they used.  Call that number and get a copy of the reports your new rates are based upon.  It may be that there is an error in your credit file or your driving record (Motor Vehicle Report) or your vehicle accident historical record (CLUE report).

Second, rates will increase with costs increasing regardless of your personal claim status.  Insurance is a pooled product, and your rate is based upon the expected losses of people "like" you, not you specifically.  In general, vehicle severity (the amount of a given loss) has been increasing for years.  In 2008 with the financial collapse, frequencies (the number of losses) started to decline.  The total rate is the combination of the number of losses and the amount of the cost per loss.  These offsetting trends kept rates flat for a long time.  In 2014ish, people started driving more, and frequencies and severity were both increasing, causing a compounding effect on the entire auto market.  Auto rates for the industry have gone up sharply in 2015, 2016 & this year they are still going up.  State farm writes their auto book to a loss.  They can do this because they have a huge capital base and make up the difference in the loss through investment income.  Other carriers don't have that luxury, so they are more careful with claim payouts, loss handling etc. are more challenging for claimants.

I say this because what SF did may or may not have been the right decision based upon the information they have.  From your perspective though, you need to find out if there is an error in your consumer reports because other carriers will use the same reports State Farm used.  Generally speaking, there is always a company out there with a lower rate.  If you want to find one and are willing to put in the work every year, that is the way to minimize your insurance costs over the long term.  Be warned that having lots of providers have different policy terms, so know what kind of coverage you are getting and be sure you are comfortable with that before switching.

Tuskalusa

  • Stubble
  • **
  • Posts: 115
Re: State Farm increased my auto insurance by 50% for no good reason!
« Reply #15 on: October 02, 2017, 11:23:45 PM »
Thanks for your perspective and advice. I will check out that CR data.

Ocinfo

  • Bristles
  • ***
  • Posts: 251
Re: State Farm increased my auto insurance by 50% for no good reason!
« Reply #16 on: October 07, 2017, 08:13:43 AM »
Did you have other policies with State Farm?  My challenge is that I'm afraid of seeing my rates go up on my homeowners and umbrella policies if I move my auto?  Am I overthinking it?

I still have renters and a landlord policy, which did not change. I believe it’s because I still have multiple policy types so that didn’t change when dropping auto.


Sent from my iPhone using Tapatalk

tj

  • Handlebar Stache
  • *****
  • Posts: 1138
  • Age: 32
  • Location: Phoenix
Re: State Farm increased my auto insurance by 50% for no good reason!
« Reply #17 on: October 14, 2017, 02:06:52 PM »
Quote
One other note is that it's not just tickets and accidents but your rates are also based on your consumer reports.

What if you have your consumer reports frozen?

MustachioedPistachio

  • 5 O'Clock Shadow
  • *
  • Posts: 75
  • Location: Memphis, TN
Re: State Farm increased my auto insurance by 50% for no good reason!
« Reply #18 on: October 14, 2017, 02:29:46 PM »
I noticed my auto insurance premium went up 20% with Nationwide. Admittedly, I got a speeding ticket during the 6-month period...but I decided to call them and see what was going on.

After a few transfers, I got on the line with a rep with an answer.

Me: "Hey there, just curious why my premium went up this term."
Rep: "Yes sir let me look into it for you...blah blah blah checking system...oh, it looks like we have switched you over to a standardized contract."
Me: "...Ok? Why did my premium go up? Did a change of address or something affect the rate?" (I had moved back to TN)
Rep: "No sir. A lot of our customers are going through this change. For some it is a minor effect, but for others like you, unfortunately, it is quite dramatic."
Me: ".....so your contract standardization is costing me an extra 20% on my premium, yet nothing else regarding me or the coverage has changed?"
Rep: "Uh, yes sir."
Me: "Hmm. Good to know. Thanks for your help today."

Immediately canceled and switched to *drumroll* Geico and saved...FOUR TIMES the proverbial 15%! Fucking Nationwide swindlers.

Not nearly as bad as 50%, but "contract standardization" is a profit-mongering crock of shit.