Car insurance question (1 Viewer)

[Joel C]

I just got my renewal for my next 6 month car insurance policy and discovered my rates have risen to the tune of around $80, though I have had no claims, tickets, points, or anything (never had any claims at all, or even been ticketed for parking, and I also have excellent credit, around 770, last I checked). I am with Allstate, and have been since I turned 16; I am now 23. Last year when I bought a new car, I left my parents' policy because the person we dealt with (not our regular agent, but someone at the 1-800 number -- it was late night) said I wouldn't pay any less by staying and I didn't want the hassle of "owing" my parents a check every six months.

My coverage is bodily injury/ property $100,000/$300,000/$50,000. Uninsured motorist coverage is $100,000/$300,000. Deductible for collision/comprehensive is $1,000. I drive a 2004 Toyota Prius which I am financing (though it will be paid off in a year).

Anyway, this time, Allstate said they made a mistake, I paid $646 for 12 months (that is, $646 every six months for two terms), but now must pay $720 because I wasn't supposed to be getting the multi-policy holder discount that I would have if I'd stayed with my parents. Which, okay, I guess, but why did it take so long for them to figure that out?

Anyway, this got me looking for other options, and as I see it I have three. Stay with Allstate, which has helped us out in the past but also threatened to cancel after we had a few claims over a number of years (on my parent's policy).

I could switch to Progressive (which my brother uses) and pay $620 for the same coverage. The downside here is, of course, that I don't really know much about Progressive, other than it is a well-known company.

The final option is esurance.com which, for the same coverage, would cost only $405, or $370 if paid in full (according to my on-line quote). That means I could save $600/ year! I searched the net and found nothing alarming about the company, but the fact that it doesn't have local offices made me question how they handle claims. It all seems to be over the phone, and I wonder how good they are at defending you without jacking up the rates.

I know it is a gamble, because chances are good based on the fact that I live in a rural area and drive like 9 miles to work that I won't be in an accident, but you never know. So I am looking for input. Go with esurance, or stick with a "name" like Progressive or Allstate?

I'm sure someone out there has some thoughts. Thanks.

 

[SteveLa]

Did you check with other major insurers? My State Farm policy is significantly less than the rate I was quoted by Allstate and I never had a problem filing a claim (two comprehensive claims from theft/vandalism and one collision claim after being rear-ended.) What about Geico? They look for people with spotless driving records. Not sure if they have a minimum age for drivers they insure. The $75 for the multi-policy discount sounds in line with what myself and others have gotten.

 

[Joel C]

I should have mentioned, all other rate comparisons I've done have been more than Allstate. GEICO was $8XX last time I looked. Don't know specifically about State Farm, but every place seems to be between $620 and $750, except esurance.com and I must say, that $370 is tempting, but I don't know anyone who uses them and has had a claim. I think they have like 200,000 policy holders nationwide, though they are, according to what I can find, the fastest growing online insurer and A rated by A.M. Best.

 

[ChrisMatson]

I switched from Allstate to Progressive.

Quick summary of experience:
I have saved a bunch of money.
One vandalism claim on my car was handled quickly and did not affect my rates.
One fender-bender involving someone hitting my wife's car was handled quickly and did not affect our rates.
Needless to say, I have been very happy and have recommended Progressive to friends and family.

 

[LewB]

I just signed up with Allstate for the same reason that you are considering leaving. I'm in New York, have a clean record for the last 5 years and was with Travelers. Travelers wanted $780 for 6 months to insure me. I just signed up with Allstate who will cover me for $450 ! Allstate also kicked Travelers butt for my homeowners policy too ! The Allstate guy told me that my FICO was 'sterling' and that he had the best rates for people with good credit scores.
I wish I could figure out the deal as to the rates that are quoted. I checked with other companies, and they were pretty much the same as Travelers was. I wonder if Allstate is trying to get more customers in N.Y. or something ?

 

[Mort Corey]

Check with your state insurance department about esurance. They should be able to tell you if there have been any problems.....probably even on their web site.

That Allstate messed up and took six months to find out that you didn't qualify for a discount is your good fortune. That you've never filed a claim is really irrelevant to the rate increasing. The cost of cars, repairs and medical injuries IS increasing. If they had to pay out your policy limits for bodily injury in an accident, that'd be almost two centuries of your paying $1500 a year in premiums.

You might also want to call a local broker that represents several companies, just for the sake of comparison to the other options. From a California perspective, $750 for six months is pretty reasonable.

Mort

 

[Brian Perry]

You indirectly brought up an interesting point with respect to credit scores.

There was a recent article in the WSJ that said there is a battle raging over whether to allow insurance companies to use credit ratings as a factor in determining car insurance rates. Apparently, there is more of a scientific correlation between bad credit and higher insurance claims than there is for bad driving habits (tickets, etc). The insurance companies claim that they should be able to use this data, and consumer groups are fighting it.

I guess the question is whether using a variable unrelated to actual driving should be allowed, even if there is a huge correlation to the number and size of claims filed. Insurance companies already use "unfair" things such as marital status, age, gender, etc. Why not credit scores? And I guess you could ask, why not race?

 

[Chris_Morris]

A class action lawsuit was filed against Allstate for just that reason. I got a notice of class status letter the other week. Some will get money (the lawyers will get most of it), but all class members are entitled to a free credit report. Allstate claimed no guilt, but agreed to quit using the data.

I don't agree with this practice at all. I don't have a spotless credit record, but that is from bad financial decisions, not bad driving habits.

 

[Joe Szott]

Joel,

Thanks for starting this thread! We have been pissed at Travellers after they jacked up our isurance costs after one accident (wife hit a curb, no other car and no bodily injuries. Just $3K of autobody work.) Checked out that esurance link, looks like we can go from $155/mo -> $78/mo and get a lower deductible with improved coverage.

Have to do a little online dilligence on esurance, but 1/2 price is pretty darn compelling for us. Let us know here what you discover about esurance too.

 

[nolesrule]

I just did a quote at esurance.com. 6 months costs only $230 less than what I pay with Amica for a full year for identical coverage. And that's for two cars and 2 drivers.

 

[Joe Szott]

Hmmm, maybe esurance isn't such a great idea:

http://www.consumeraffairs.com/insurance/esurance.html

Lots of bait and switch on prices going on there.

 

[Joel C]

Yeah, but those are people who were approved without using their social security numbers or names, so it assumes good credit. If you have bad, the rates go up. But I used my SSN when I got my quote so it shouldn't change.

 

[SethH]

You should really consider upping the property coverage to $100,000. This will probably cost you all of $2-3 per 6 months. And think about how many cars are on the road that cost more than $50,000 -- not to mention the possibilty of a multi-car accident.

 

[Joe Szott]

I agree with Seth, best to purchase insurance for the 'worst case scenario' and not the garden variety fender bender. I usually have a $1000 deductible on our cars, and then the max $250K/500K/100K for accidents. I don't want someone sueing me out of my family's home or getting turned out of the hospital early if my insurance runs out.

If you go with esurance, let us know how it goes Joel. Those reports I posted have been mirrored elsewhere, so I'm still a little skeptical on the 'deal' you can get with that company. It seems like if nothing else, don't pay in one lump sum, but scale it out month to month in case they try to jack up your rates.

PS - THat isn't the only site that reports the 'bat and switch' with esurance. There were several reports of people that had already signed an agreement (hence full dislosure of record and SSN) and had esurance reneg on the price AFTER they had agreed to a lower quote. That's pretty shaky stuff IMO.

 

[Joel C]

Yeah, sounds like it. I will probably end up going with Progressive since, at least, it's a known quantity and the cost ($620 if I up to the $100,000 property damage, which I had considered) is even less than I was paying with Allstate before they bumped me.

Thanks for the comments, everyone. And if anyone does know more about esurance, let us know.