Author Topic: Negotiated with Auto Insurance Company and got monthly rate down to $23 from $33  (Read 1647 times)

jnw

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Two years ago with signed up with Farmers for homeowner's insurance along with two vehicles.

They gave us a great rate on the home owner's insurance beating competition, they also bundled in $25 per month for liability insurance on each of our old vehicles.

But they increased the auto insurance for each vehicle to around $29 per month starting a year ago.  And now they all of a sudden want $32.50 or so -- about a 30% increase from the $25 per vehicle just 2 years ago. I understand they would need to increase for inflation but not 30% my goodness.

I called them and at first they said there is nothing they could do about it and the main office sets the rates.  I told them to talk to their boss there at their location and to call me back.  They called me back and got us each $23 per month instead of $33 -- using their sister system whatever that means.

So we just saved $216 per year with a quick phone call, along with a little bit of guts and persistence.  (I told them I didn't want to have to go looking for a new homeowner's insurance policy along with vehicles.)

EDIT: I just paid $279.68 for a sixth month policy on both of our vehicles, instead of the $388 they just recently billed us.
« Last Edit: March 21, 2023, 05:15:17 PM by JenniferW »

bacchi

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Nicely done. I'll try that next time.

I only got a deal when I called to cancel. I didn't want to play that internet provider game so I canceled anyway.

tj

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Insurance rates are regulated by the state. There is no bartering. You don't see any evidence of your coverage changing?

jnw

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Insurance rates are regulated by the state. There is no bartering. You don't see any evidence of your coverage changing?

Nope it's minimum liability.  Both the old policy and new.  We only ever buy the minimum amount of auto insurance to remain legal.

I find your comment a bit confusing. If it was regulated by the state, then all agencies would charge the same, and then people wouldn't have to shop around for auto insurance.
« Last Edit: February 25, 2023, 03:58:35 PM by JenniferW »

tj

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Insurance rates are regulated by the state. There is no bartering. You don't see any evidence of your coverage changing?

Nope it's minimum liability.  Both the old policy and new.  So maybe the state's set rate is $23 that I am getting now and the extra $10 was profit for them. 

I find your comment a bit confusing. If it was regulated by the state then people wouldn't have to shop around for auto insurance.

The state regulators have to approve each company's requested rate increases. They can't give someone a better rate because X, Y or Z.  It's not about an "extra $10 profit"

Does the declarations page have a different insurance company name on it?

Maybe they put you with a different subsidiary if you credit profile or some other thing had changed since you opened the policy.

jnw

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Insurance rates are regulated by the state. There is no bartering. You don't see any evidence of your coverage changing?

Nope it's minimum liability.  Both the old policy and new.  So maybe the state's set rate is $23 that I am getting now and the extra $10 was profit for them. 

I find your comment a bit confusing. If it was regulated by the state then people wouldn't have to shop around for auto insurance.

The state regulators have to approve each company's requested rate increases. They can't give someone a better rate because X, Y or Z.  It's not about an "extra $10 profit"

Does the declarations page have a different insurance company name on it?

Maybe they put you with a different subsidiary if you credit profile or some other thing had changed since you opened the policy.
Yeah they used their sister company or whatever.. I mentioned that in the original post. Perhaps a different company.

EchoStache

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I'm impressed!  Spending so little compared to most, and still found a way to save.  I can relate; as long as I've been working to optimize and minimize expenses, it seems that every time I put my mind to it, I find a way to save more.  I also recently just drastically lowered my car insurance by shopping around a bit.

GilesMM

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Did they explain how the “sister system” offers lower cost? Are you in a different risk pool? Diffferent coverage? Different service?

jnw

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I dunno, we have the same minimum liability insurance as we did before. We are both over 50 and I guess low risk.  My credit rating is near 800 as well.  $23 per month is pretty good.. best I've ever had in my life actually lol.

jnw

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I'm impressed!  Spending so little compared to most, and still found a way to save.  I can relate; as long as I've been working to optimize and minimize expenses, it seems that every time I put my mind to it, I find a way to save more.  I also recently just drastically lowered my car insurance by shopping around a bit.

Congratulations :)  Yeah I am always trying to figure out ways to save money without really sacrificing comfort.  We just recently switched to black tea from coffee and are saving about $662 annually on that alone.  Tastes wonderful and still get our caffeine :)

Gonna get rid of escrow on mortgage loan so I can put that $2000 per year in money market and get like $90 of interest on it instead :)  I don't need a bank to baby sit me and earn interest on my cash :)

Currently reading the Complete Tightwad Gazette on my ipad and taking notes with apple pencil and bookmarking.  Not much applies to me there but I do take note of little things I have been overlooking.
« Last Edit: February 26, 2023, 07:50:24 AM by JenniferW »

RWD

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Well done. I just renewed our policy for $750 for six months, nearly triple your cost. Getting a speeding ticket recently certainly didn't help...

EchoStache

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Well done. I just renewed our policy for $750 for six months, nearly triple your cost. Getting a speeding ticket recently certainly didn't help...

5.4x. About the same as what I'm paying, but I have super spendy pants full coverage on super spendy pants new EV's.

EchoStache

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I'm impressed!  Spending so little compared to most, and still found a way to save.  I can relate; as long as I've been working to optimize and minimize expenses, it seems that every time I put my mind to it, I find a way to save more.  I also recently just drastically lowered my car insurance by shopping around a bit.

Congratulations :)  Yeah I am always trying to figure out ways to save money without really sacrificing comfort.  We just recently switched to black tea from coffee and are saving about $662 annually on that alone.  Tastes wonderful and still get our caffeine :)

Gonna get rid of escrow on mortgage loan so I can put that $2000 per year in money market and get like $90 of interest on it instead :)  I don't need a bank to baby sit me and earn interest on my cash :)

Currently reading the Complete Tightwad Gazette on my ipad and taking notes with apple pencil and bookmarking.  Not much applies to me there but I do take note of little things I have been overlooking.

 Another opportunity!!!  Thanks for the tip about escrow.  Never thought about it before.  Even if I just make a monthly payment into my MMF throughout the year equivalent to the monthly escrow, I'll make around $150 of interest.  Time to call my bank.

jnw

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Another opportunity!!!  Thanks for the tip about escrow.  Never thought about it before.  Even if I just make a monthly payment into my MMF throughout the year equivalent to the monthly escrow, I'll make around $150 of interest.  Time to call my bank.

I'm driving down to my bank tomorrow to find out all the details to see how much money they hold onto for how long, how easy it would be for me to make my own payments and report back to them etc.  They told me in the past I could do this. We'll see tomorrow.  I made a thread about this here:

https://forum.mrmoneymustache.com/ask-a-mustachian/should-i-get-rid-of-escrow-w-my-mortgage-loan/

tj

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I dunno, we have the same minimum liability insurance as we did before. We are both over 50 and I guess low risk.  My credit rating is near 800 as well.  $23 per month is pretty good.. best I've ever had in my life actually lol.

Minimum liability seems rather risky. Do you think you are invincible from causing an accident?  I'm glad I have my uninsured/underinsured motorist coverage because it will pay for the injuries the uninsured driver caused me over the summer.

jnw

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I dunno, we have the same minimum liability insurance as we did before. We are both over 50 and I guess low risk.  My credit rating is near 800 as well.  $23 per month is pretty good.. best I've ever had in my life actually lol.

Minimum liability seems rather risky. Do you think you are invincible from causing an accident?  I'm glad I have my uninsured/underinsured motorist coverage because it will pay for the injuries the uninsured driver caused me over the summer.

I don't understand the question, liability insurance, which we have and is federally required to have, covers me if I cause an accident; so no I don't think I'm invincible from causing an accident -- although in the 30+ years I've been driving I've never caused one (knock on wood). 

We don't have uninsured motorist, that adds a bit.  We both have cars worth less than $3000.  I have Medicare for medical care and it's copays & deductibles are really low.  So we self insure with respect to that.

Also personally I only drive my car at most once per week for a short trip to grocery store , doctor or w/e.

EDIT: My net worth is only $86k currently and that is mainly the equity in the home.  So minimum liability is okay at the moment.  Perhaps 15 years later when I have $500k in my taxable personal brokerage account, I might get a policy to cover most of that perhaps.

EDIT #2: Can a person's home be taken away if they cause a large auto accident that exceeds the amount covered on auto insurance policy?   Or just bank accounts?
« Last Edit: February 26, 2023, 10:16:49 AM by JenniferW »

meadow lark

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Jennifer - sounds like you are working your butt off to better your financial situation - way to go!  Completely impressed by your insurance #’s.

patchyfacialhair

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I dunno, we have the same minimum liability insurance as we did before. We are both over 50 and I guess low risk.  My credit rating is near 800 as well.  $23 per month is pretty good.. best I've ever had in my life actually lol.

Minimum liability seems rather risky. Do you think you are invincible from causing an accident?  I'm glad I have my uninsured/underinsured motorist coverage because it will pay for the injuries the uninsured driver caused me over the summer.

I don't understand the question, liability insurance, which we have and is federally required to have, covers me if I cause an accident; so no I don't think I'm invincible from causing an accident -- although in the 30+ years I've been driving I've never caused one (knock on wood). 

We don't have uninsured motorist, that adds a bit.  We both have cars worth less than $3000.  I have Medicare for medical care and it's copays & deductibles are really low.  So we self insure with respect to that.

Also personally I only drive my car at most once per week for a short trip to grocery store , doctor or w/e.

EDIT: My net worth is only $86k currently and that is mainly the equity in the home.  So minimum liability is okay at the moment.  Perhaps 15 years later when I have $500k in my taxable personal brokerage account, I might get a policy to cover most of that perhaps.

EDIT #2: Can a person's home be taken away if they cause a large auto accident that exceeds the amount covered on auto insurance policy?   Or just bank accounts?

It's not just a catastrophic accident that can ruin you.

Minimum liability means you may only be covered for something like only $15k property damage liability in some states. So if you run into someone's car that is worth $20k, and your coverage is only $15k, you can expect a lawsuit for you to personally pay the remaining $5k. You may have more coverage, and you may have less, but going for the absolute minimum puts you at risk of something like that. To answer your question, most states have some protection for primary homes and retirement accounts but that varies a ton.

jnw

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It's not just a catastrophic accident that can ruin you.

Minimum liability means you may only be covered for something like only $15k property damage liability in some states. So if you run into someone's car that is worth $20k, and your coverage is only $15k, you can expect a lawsuit for you to personally pay the remaining $5k. You may have more coverage, and you may have less, but going for the absolute minimum puts you at risk of something like that. To answer your question, most states have some protection for primary homes and retirement accounts but that varies a ton.

Thanks, I'll probably be increasing the coverage as my net worth increases.  I do rarely drive though and I have never caused an accident in 30 years of driving, so pretty low chance.   But if I got a couple hundred K sitting in my personal taxable brokerage account, it makes sense to have better than minimum coverage.  Perhaps some umbrella insurance  as well.

RWD

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It's not just a catastrophic accident that can ruin you.

Minimum liability means you may only be covered for something like only $15k property damage liability in some states. So if you run into someone's car that is worth $20k, and your coverage is only $15k, you can expect a lawsuit for you to personally pay the remaining $5k. You may have more coverage, and you may have less, but going for the absolute minimum puts you at risk of something like that. To answer your question, most states have some protection for primary homes and retirement accounts but that varies a ton.

Thanks, I'll probably be increasing the coverage as my net worth increases.  I do rarely drive though and I have never caused an accident in 30 years of driving, so pretty low chance.   But if I got a couple hundred K sitting in my personal taxable brokerage account, it makes sense to have better than minimum coverage.  Perhaps some umbrella insurance  as well.

Umbrella insurance may require you to carry the maximum limits on your other insurance.

Sibley

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For whoever was looking to drop the escrow on their mortgage - you may be required to have an escrow account as part of the mortgage. If that's the case you would need to refinance or pay off the mortgage to get rid of escrow. The mortgage paperwork will tell you.

jnw

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For whoever was looking to drop the escrow on their mortgage - you may be required to have an escrow account as part of the mortgage. If that's the case you would need to refinance or pay off the mortgage to get rid of escrow. The mortgage paperwork will tell you.

I contacted the bank and found out they were not paying any interest at all on my escrow account.  It currently has around $800 in it.

I just got an email from them:

"Hi Jennifer,
 
I have reviewed your account and I have approved the escrow waiver for you.
 
I will need to prepare the documents for your signature before we can update this information in our system and remove the escrow account.
 
Once I have prepared the documents, do you want to visit a branch for signing or would you like to do this online through DocuSign?
 
Thank You"

So no pay off or refinance for me.


Peaksandvalleys

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Insurance rates are regulated by the state. There is no bartering. You don't see any evidence of your coverage changing?

Nope it's minimum liability.  Both the old policy and new.  We only ever buy the minimum amount of auto insurance to remain legal.


You are underinsured and leaving yourself open to a potentially catastrophic situation. And yes I know you don't drive much and haven't ever caused an accident, you are still woefully underinsured.

Metalcat

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Insurance rates are regulated by the state. There is no bartering. You don't see any evidence of your coverage changing?

There's also no bartering because I think OP accidentally used the wrong word for "bargaining."

Bartering = trading

jnw

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Insurance rates are regulated by the state. There is no bartering. You don't see any evidence of your coverage changing?

There's also no bartering because I think OP accidentally used the wrong word for "bargaining."

Bartering = trading

You are right!  I meant haggling :)

jnw

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Insurance rates are regulated by the state. There is no bartering. You don't see any evidence of your coverage changing?

Nope it's minimum liability.  Both the old policy and new.  We only ever buy the minimum amount of auto insurance to remain legal.


You are underinsured and leaving yourself open to a potentially catastrophic situation. And yes I know you don't drive much and haven't ever caused an accident, you are still woefully underinsured.

Yeah I've addressed this earlier in this thread.  My liquid assets are only $15-20k.  So minimum liability works for us for now. I said I would look into bigger policies as my cash in the bank increases, along with possibly an umbrella policy.  So for now we are self insuring yet remaining legal.
« Last Edit: March 02, 2023, 01:16:25 PM by JenniferW »

RWD

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Insurance rates are regulated by the state. There is no bartering. You don't see any evidence of your coverage changing?

Nope it's minimum liability.  Both the old policy and new.  We only ever buy the minimum amount of auto insurance to remain legal.


You are underinsured and leaving yourself open to a potentially catastrophic situation. And yes I know you don't drive much and haven't ever caused an accident, you are still woefully underinsured.

Yeah I've addressed this earlier in this thread.  My liquid assets are only $15-20k.  So minimum liability works for us for now. I said I would look into bigger policies as my cash in the bank increases, along with possibly an umbrella policy.  So for now we are self insuring yet remaining legal.

Even without assets you could have wages garnished in a judgement.

Peaksandvalleys

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Insurance rates are regulated by the state. There is no bartering. You don't see any evidence of your coverage changing?

Nope it's minimum liability.  Both the old policy and new.  We only ever buy the minimum amount of auto insurance to remain legal.


You are underinsured and leaving yourself open to a potentially catastrophic situation. And yes I know you don't drive much and haven't ever caused an accident, you are still woefully underinsured.

Yeah I've addressed this earlier in this thread.  My liquid assets are only $15-20k.  So minimum liability works for us for now. I said I would look into bigger policies as my cash in the bank increases, along with possibly an umbrella policy.  So for now we are self insuring yet remaining legal.

Even without assets you could have wages garnished in a judgement.

This. I saw your reasoning earlier in the thread and think it's flawed. You are not protected just because you have minimal assets. You are just as much a risk to your financial future underinsured with minimal assets as you are underinsured with sizable assets. Protect yourselves and protect others, your insurance is dirt cheap, you can afford a policy that doesn't leave you at risk, not doing so in my opinion is penny-wise and pound foolish.

jnw

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So I changed my policy to 100/300/100 liability coverage and it's now $31 per month.  How much would I need to increase liability to to get umbrella insurance?  What is typical cost of umbrella insurance?

tj

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So I changed my policy to 100/300/100 liability coverage and it's now $31 per month.  How much would I need to increase liability to to get umbrella insurance?  What is typical cost of umbrella insurance?

Ask your insurer?

patchyfacialhair

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So I changed my policy to 100/300/100 liability coverage and it's now $31 per month.  How much would I need to increase liability to to get umbrella insurance?  What is typical cost of umbrella insurance?

Those limits make much more sense. And you can see the minimal impact to your pricing.

Each insurer is different with required minimum limits for umbrella. Mine requires 300/500/100, and they require that you have all risks insured by the same company. Property risks are required to have 300k liability in order to qualify for the umbrella as well. For me, I have 2 cars, 2 drivers, 1 house, and I pay $222/yr for a $1 million umbrella.

So hypothetically, we can hit a car with multiple people in it, and the auto policy plus umbrella can pay up to a maximum combined $1.5 million. For me, this is adequate peace of mind, especially since we don't do much highway driving these days. As inflation erodes the buying power of that much money, and as our incomes increase, we'll add more to the umbrella limit.

jnw

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So I changed my policy to 100/300/100 liability coverage and it's now $31 per month.  How much would I need to increase liability to to get umbrella insurance?  What is typical cost of umbrella insurance?

Those limits make much more sense. And you can see the minimal impact to your pricing.

Each insurer is different with required minimum limits for umbrella. Mine requires 300/500/100, and they require that you have all risks insured by the same company. Property risks are required to have 300k liability in order to qualify for the umbrella as well. For me, I have 2 cars, 2 drivers, 1 house, and I pay $222/yr for a $1 million umbrella.

So hypothetically, we can hit a car with multiple people in it, and the auto policy plus umbrella can pay up to a maximum combined $1.5 million. For me, this is adequate peace of mind, especially since we don't do much highway driving these days. As inflation erodes the buying power of that much money, and as our incomes increase, we'll add more to the umbrella limit.

Thanks for sharing all that info, that helps me out a lot.  Sounds like a good deal: $222 for the umbrella insurance, to protect 1M.  Is that 1M beyond the liabilities the individual insurance covers?  e.g. Say you do 1.8M in damage in an auto accident where the auto policy covers 800K of it (300/500/100), would all of your 1M be protected?
« Last Edit: March 21, 2023, 11:31:24 PM by JenniferW »

patchyfacialhair

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So I changed my policy to 100/300/100 liability coverage and it's now $31 per month.  How much would I need to increase liability to to get umbrella insurance?  What is typical cost of umbrella insurance?

Those limits make much more sense. And you can see the minimal impact to your pricing.

Each insurer is different with required minimum limits for umbrella. Mine requires 300/500/100, and they require that you have all risks insured by the same company. Property risks are required to have 300k liability in order to qualify for the umbrella as well. For me, I have 2 cars, 2 drivers, 1 house, and I pay $222/yr for a $1 million umbrella.

So hypothetically, we can hit a car with multiple people in it, and the auto policy plus umbrella can pay up to a maximum combined $1.5 million. For me, this is adequate peace of mind, especially since we don't do much highway driving these days. As inflation erodes the buying power of that much money, and as our incomes increase, we'll add more to the umbrella limit.

Thanks for sharing all that info, that helps me out a lot.  Sounds like a good deal: $222 for the umbrella insurance, to protect 1M.  Is that 1M beyond the liabilities the individual insurance covers?  e.g. Say you do 1.8M in damage in an auto accident where the auto policy covers 800K of it (300/500/100), would all of your 1M be protected?

Almost. The limits are written as per person medical, total medical per incident, and total property damage per incident. The umbrella kicks in after that.

So in your example, more accurately we're covered for $100k in property damage, plus $500k of injuries if there are multiple people in the car, and then an additional $1 mil for everything else on top of that. Maybe it's for a more expensive car or damage to public property, plus all the extra medical expenses. The umbrella can cover both, for a total of $1.6 mil in coverage in this example.

 

Wow, a phone plan for fifteen bucks!