Author Topic: Help me destroy my car insurance bill  (Read 20530 times)

Meowmalade

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Re: Help me destroy my car insurance bill
« Reply #50 on: January 07, 2016, 07:10:57 PM »
Here is the long, torturous AAA story.  I will warn you I am emotionally in a bad spot right now due to family issues, so my anger towards AAA is probably exaggerated.  (I'm trying to be fair here.)

...

Ugh, so sorry about your family issues, and for the huge hassle with AAA during a very stressful time.  It sounds like the underwriting process is ridiculously strict. 

I do have to say that I'm glad your story wasn't about how you got screwed over during a claim.  I've had their insurance since 2007 with no issues... the only time I felt that I should have done something differently was when someone swiped off the side mirror of my car.  I went to the AAA recommended repair shop, and the new mirror that they put in was so flimsy that it would bend if I pushed on it.  They were within their rights to use the cheapest parts possible, but I have rights to pick my own shop (next time I won't just go with their default) and to ask for OEM parts.  So that was a big learning for me!

I'm guessing everyone has a bad story about any insurer.  I still feel some anger when I think about the Allstate lady telling me I was getting "feel-good massages" when my back was in pain for so long.

merula

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Re: Help me destroy my car insurance bill
« Reply #51 on: January 08, 2016, 07:39:58 AM »
Example of terrible treatment by AAA

I'm really sorry to hear about your current situation, and then the insurance issue on top of it. It sounds like what happened was that AAA was taking advantage of a law common to many states that insurance carriers can non-renew policies within a certain period of time if they discover something they didn't know when they first wrote the policy. It's meant to give the carriers a way to deal with fraudulent applications.

When you're up to dealing with it, my suggestion would be to contact your state's attorney general or insurance commissioner, or both. Use words like "bad faith". The state DOJ and Department Of Insurance *love* the opportunity to stick up for the little guy against the big, mean insurance companies.

And because those independent agents get paid on commission, with presumably a larger commission when initially signing someone up rather then when they renew (no idea if that is actually true, but I'd think so), they'll be more than happy to shop you around when the 1st company you picked jacks up your rate after a year or 2. You continue to get lower rates and they continue to get a nice commission for signing you up to a new company, win-win as long as the rates continue to be less or comparable to online rates you could find  yourself.

Depends on the carrier and their relationship with the agent, but generally speaking the commission from writing a policy new and renewing it are the same. Sometimes carriers will run special promos ("We'll give you an extra 5% commission on everything new through March!"), and sometimes they'll have extra compensation deals with the carrier ("If you're one of our top agents at the end of the year, we'll pay you an extra 1-2% commission on everything"), though that has been majorly controlled since the Spitzer cases (https://en.wikipedia.org/wiki/Contingent_commissions).

The real reason an independent agent is happy to market your business for you is that it's way cheaper to keep an existing client than to find a new one, and they know that if you're asking them to shop you're probably looking at other options, too, like other agents or online. If the agent only makes a half effort and you find something way better, you're leaving, as well you should. And even if you have the cheapest price and you don't like your independent agent, you can move your business to another agent while keeping the same carrier. (This is called an "Agent Of Record Request". How it works is that while Agent 1 represents Carriers A, B and C, Agent 2 represents Carriers A, B, D and E. Let's say you're with Agent 1 and Carrier B. You like your coverage but don't like your agent's service. You can contact Agent 2 and say "Can I move my Carrier B policy to you?". They'll say "Sure!", put in the request with Carrier B, and probably also check Carriers D and E to see if they can get you a better deal. This would not work if you were with Carrier C, because Agent 2 doesn't represent them.)

StacheInAFlash

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Re: Help me destroy my car insurance bill
« Reply #52 on: January 08, 2016, 08:07:02 AM »

And because those independent agents get paid on commission, with presumably a larger commission when initially signing someone up rather then when they renew (no idea if that is actually true, but I'd think so), they'll be more than happy to shop you around when the 1st company you picked jacks up your rate after a year or 2. You continue to get lower rates and they continue to get a nice commission for signing you up to a new company, win-win as long as the rates continue to be less or comparable to online rates you could find  yourself.

Depends on the carrier and their relationship with the agent, but generally speaking the commission from writing a policy new and renewing it are the same. Sometimes carriers will run special promos ("We'll give you an extra 5% commission on everything new through March!"), and sometimes they'll have extra compensation deals with the carrier ("If you're one of our top agents at the end of the year, we'll pay you an extra 1-2% commission on everything"), though that has been majorly controlled since the Spitzer cases (https://en.wikipedia.org/wiki/Contingent_commissions).

The real reason an independent agent is happy to market your business for you is that it's way cheaper to keep an existing client than to find a new one, and they know that if you're asking them to shop you're probably looking at other options, too, like other agents or online. If the agent only makes a half effort and you find something way better, you're leaving, as well you should. And even if you have the cheapest price and you don't like your independent agent, you can move your business to another agent while keeping the same carrier. (This is called an "Agent Of Record Request". How it works is that while Agent 1 represents Carriers A, B and C, Agent 2 represents Carriers A, B, D and E. Let's say you're with Agent 1 and Carrier B. You like your coverage but don't like your agent's service. You can contact Agent 2 and say "Can I move my Carrier B policy to you?". They'll say "Sure!", put in the request with Carrier B, and probably also check Carriers D and E to see if they can get you a better deal. This would not work if you were with Carrier C, because Agent 2 doesn't represent them.)

Good info to have! My policies are up in a few months, and I'm pretty sure it is going to be shopping around time again....I let them raise my rates about 10% on year 2, but I'm not gonna put up with it for year 3.

Spork

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Re: Help me destroy my car insurance bill
« Reply #53 on: January 08, 2016, 08:26:48 AM »
Example of terrible treatment by AAA

When you're up to dealing with it, my suggestion would be to contact your state's attorney general or insurance commissioner, or both. Use words like "bad faith". The state DOJ and Department Of Insurance *love* the opportunity to stick up for the little guy against the big, mean insurance companies.


I will consider that. I don't particularly think what they did was illegal. I just think they're assholes. I'd like to complain in a way to get perspective buyer's attention.

Most places that have reviewed of insurance companies are just a laundry list of " Hate them. 0 stars. "  One insurance company pretty much looks like another on those sites.

One correction/clarification: talked to my Allstate guy again. He wasn't an underwriter for AAA. He was an independent agent selling many different policies from different companies. He said at one point they just stopped selling AAA because of their "cancel any time for any reason/find new ways to increase premium" habits.


robartsd

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Re: Help me destroy my car insurance bill
« Reply #54 on: January 08, 2016, 09:26:56 AM »
Growing up, my parents insured with AAA. I don't remember any complaints. When it came time to purchase my own insurance, AAA was too expensive for me - I went with 21st. I probably should shop arround more than I have, but my experience has generally been premiums lowering as I continue with the same company without making claims. Of course, I've also been moving towards a lower risk age during this period. Most of the time, I have been driving without any collision insurance, so reduction in premium was not due to depretiation. I could see an insurance company not reducing rates as rapidly for these decreasing risks for an existing customer as they would trying to attract a new customer - most people don't think, "My insurance premium has gone down a couple of bucks a month; I wonder if I could save more by switching companies."

My only bad insurance story is about Progressive. My wife (then fiance) was insured with Progressive when we were in a roll over acident while her brother was driving. I took her recommendation for a chiropractor and he told us that from his point of view Progressive was one of the worst companies. Progressive offered me a low-ball settlement which I refused. Eventually I consulted with a lawyer about the case. My injuries were mostly soft-tissue injuries and to force the insurance company to pay I'd have to win a lawsuit against my wife - not an easy situation. The lawyer told me about another case against Progressive where the damages were much clearer, but Progressive was still fighting hard and likely to spend more than they should overall by driving up legal costs on a case they were sure to lose. It was over a year after the accident before I settled with Progressive for about twice what their original offer. In the end I recieved only about 60-70% of my own estimate of the damages. I also have a relative that works for Progressive who does not recommend them.

FIPurpose

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Re: Help me destroy my car insurance bill
« Reply #55 on: January 08, 2016, 09:54:37 AM »
I insure my car through USAA which is known for being slightly more expensive than most, but the service and non-hassle that I've had from them is well worth the price. I've only had to use the insurance a handful of times in my 6 or so years insuring through them. The first time was when my wife totaled a car and we had C&C on the car. USAA came back with a number that was pretty much exactly the KBB value of the car minus our deductible. No issues or anything. Money hit our bank account within a week and they reimbursed any insurance that was paid after the wreck date without us having to ask them.

I've also used them when I locked my keys in my car, for towing the car, fixing the front windshield. All were paid full benefits with no hassle. Granted, I have yet to be in an accident that cost over $50k. Maybe that's when a company's true colors come out.

Here is what I pay with USAA:

Pontiac Grand Prix 2005 ~135k miles (I estimate about a $3,500 car; prices are 6-month cost):

Body Injury 50,000/100,000: 73.92

Property Damage 50,000: 49.32

Uninsured Motorist Body Injury 50,000/100,000: 30.48
Personal Injury Protection 10,000: 23.16
Uninsured Motorist Property Damage 10,000 [300 deduct.]: 6.12

Accident Forgiveness (no rate increase on future contracts for at fault): 3.24
Tow & Labor: 6.30

Total 6-month prem.: $192.50

At the suggestion of this forum, I looked at what it cost to increase body injury to 100k/300k and property to 300k. It increased my premium 2.74 a month and the 6 month to $208.92. I guess if I'm going to have a big wreck, might as well pay the extra 3 bucks a month to make sure I come out without a lawsuit.

Duchess of Stratosphear

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Re: Help me destroy my car insurance bill
« Reply #56 on: January 08, 2016, 10:16:53 AM »
Thanks for the responses! I think I am seriously going to look into this.


TheInsuranceMan

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Re: Help me destroy my car insurance bill
« Reply #57 on: January 08, 2016, 10:22:53 AM »
Thanks for the responses! I think I am seriously going to look into this.

You asked how insurance agents get paid?
Well, most of it is commission based of the policy premiums.  First year commissions for most are about 15% for the agency (agent may or may not get a split of that, depending on his position in the agency).  Renewal commissions sometimes are a lower %, sometimes they are the same as the new business cut. 

They also, depending on their companies, get incentive bonuses based on total written premium, increasing the size of their book with a certain company, loss ratio being low, and keeping a high retention ratio. 

And don't kid yourselves, most agents are killing it by selling $3,000-$4,000 home and auto packages.  Unless they are in a big city, but that brings competitive markets, and worse retention ratios.  Money is made off large commercial and ag accounts, as well as life insurance, health insurance (not really, unless it's group health), and annuities.