General insurance question

[PK3]

Not quite sure where to post this so thought I may start here. Just a generic insurance question to all...

How often do you switch insurance companies? I have had the same carrier for many years with very few claims. Is there a benefit to switching companies every few years or is it better to stay with the same one long term? This would be for complete insruance needs. I hear of people switching every couple of years and they have all said they save quite a bit of money.

Thanks all. Thoughts?

[nofishfisherman]

It really depends on a case by case basis. By shopping around you can sometimes find better rates and save some money, sometimes your best rate will be your current rate. Usually you can find something thats at least a little cheaper but one thing to keep in mind is that a company that offers a lower initial rate may not be all that cheap after your rates change at first renewal. After renewal and rate increases you may end up paying more than you are now which means another round of insurance shopping. I know some people who get into the cycle of shopping insurance every year or two because they always go with the cheapest rate but then get burned at renewal. After awhile it can be a hassle to constantly chase the cheapest rate and the more companies you end up using the higher the chanes are that you'll end up dealing with a bad company or two.

I've been with the same company for 10+ years now. I could probably save a little money if I shop around but there is also some piece of mind in knowing the company and agent and having that relationship. I've had a few claims over the years and have always been very happy with the outcome of each. Thats not always a given in the insurance world so once I build trust in a company and agent there is a value there that offsets at least some of the savings that might be found by shopping around for new rates and new companies every year or two.

If you do decide to shop rates I'd strongly suggest talking with an independant insurance agent. They will be able to compare rates from many different companies and do most of the work for you. They may also be able to advise you on the claim services of each comapny you are considering. Even if a comapny is the cheapest if they have terible claim service you'll regret your decision to save a few dollars.

[SkunkedAgain]

I'm not advocating either way, but when you shop around it's always difficult to compare apples to apples. You really have to read into the details to make sure that all of the coverages, exclusions, and what-nots are the same. That would be a benefit of staying put, is knowing (hopefully) that you've got everything that you need.

[Tom7227]

Consider asking independent agents for their advice and a quote. If all you care about is price go as cheap as you can but don't cry when you get jacked around when you file a claim.

The one eye opener for me was that I would get dinged a 3 year 10% overall rate increase if I filed for the garage door that I wrecked. It would have cost me more to make the claim that what I could have gotten for the claim. I ended up raising my deductible and saving a couple hun a year.

[BoxMN]

I ended up raising my deductible and saving a couple hun a year.

Yep, I did that too. Ask the agents before you file claims, for sure. Sux that it works that way, but it does.

[shizzy]

I make a few phone calls about once a year or so. I haven't switched yet, but for a few minutes of your time once a year its good to check.

[LightningBG]

My independent agent rechecks everything for me every couple of years. Sometimes its amazing the difference. When I switched from the company my parents had to shopping it myself, my auto alone went down by $1000 a year. Their agent certainly wasn't doing me any favors.

[Tom7227]

I make a few phone calls about once a year or so. I haven't switched yet, but for a few minutes of your time once a year its good to check.

I don't know if that would work for everyone. The nuances of coverage can make it difficult, and you really don't know what the reputation of the company is unless you have some other sources.

Just a thought, but maybe the one's that advertise the most are ones to be wary of. How can one company have an 'accident forgiveness plan' and no one else does? Probably by charging more to begin with, or by being tough on claims.

Another thought = are smaller local insurance companies better? Some of the big boys are getting nailed with the Hurricane Sandy claims. If there is a company that only writes Minnesota maybe that's a better deal. Just wondering on this one, have no clue if it is accurate.

[nofishfisherman]

A comapny will have different rates for each state and different rates for each zip code within the state. The states in hurricane territory will be paying higher rates because of that risk. Rates for the area affected may go up after the fact if losses were way above planbut rates shouldn't go up in MN because of too many claims in NY. However, shouldn't doesn't me can't. If the company wants to raise rates here because of losses else where that it technically possible but all proposed rate changes have to be approved by the Dept. of Insurance in each state where the change is proposed.

Insurance can be a complicated game. There are advantages to being smaller but there are also advantages to being larger. The smaller company can focus rates a little more and target narrow elements of business and potentially offer better rates in their niche market. Large companies can offer the economy of scale to get prices lower. A devestating storm in one area could crush a small company but a large company can absorb the loss because they have premium coming in from all over. The loss ratio in the area effected by a storm like Sandy would be horrendous but it would be off set but the lower loss ratios in various other parts of the state. As long as the average loss ratio nationwide is accpetable then they are still profitable.

Larger companies also tend to have more sophisticated pricing models so they can be more accurate when determining a level or risk. The more accurate a company is in determing level or risk the better the price they can offer.

Also if using an independant agent you may find larger companies a little cheaper because they tend to pay lower commissions to the agent. The large companies assume you'll sell a larger volume so they can offer lower commissions. The company I worked for had to pay on average 2-5% higher commissions to agents then some of the bigger companies. That is also another thing to keep in mind when using an independant agent. They are not entirely unbiased since each insurer pays different commissions. Its not uncommon for an agent to guide a customer toward companies that offer higher commissions. It doesn't always happen but its not totally uncommon.

Because of all the variables there is no one size fits all answer for every person. It will depend so much on all the different pricing variables (age, location, gender, etc, etc, etc...) and also what you are insuring and what coverage you are looking for. And comparing various policies is no easy task. Often coverages, conditions, deductibles, exclusions, etc vary so much that its hard to get an apples to apples comparision.

[jameswilson]

Yes, I do save some $$$ by switching my insurance provider. You must take an advice of independent agent; he might give a good insight about the plans & offerings. That’s not essential to change provider, maybe the one you are with is the best for you!

[Stick in Mud]

Just a thought, but maybe the one's that advertise the most are ones to be wary of.

I believe this is true for just about everything.

[aanderud]

My advice would be to price shop the competition (using reputable firms of course) so that you know where your current company stands. Who knows, you might be with the cheapest company right now! You won't know unless you check. If you find someone significantly lower, be sure to ask yourself if your new lower quote includes any claims you've made in the past that could be affecting your current rate. Also, be sure to make sure it's apples to apples on coverage (ESPECIALLY on the deductible, since that is a huge determining factor on what your premium is).

If you find widely varying prices, call your agent and ask them why the variance. Tell them flat out what your other quote was for, and who it was with. They may be able to adjust your rate to match. Or, they might have your replacement value too high on your house (some uber-inflated-2006-value?), etc.

Also, don't overlook the fact that companies give discounts for insuring both your auto and home with them (and will often give further discounts for such things as life and umbrellas).

[ANPACMN]

Shopping out your insurance Is not a bad thing to do, however if you look at any insurance company within a 10 year period you might be surprised on how all insurance companies premiums will all be in the ball park of each other. The insurance industry is all hills and valleys, yes you might be able to get it cheaper on your current renewal but it may increase by the next. Every insurance company takes rate increases and decreases at different times. Insurance premiums should be a concern, however making sure that you are properly protected is the most important. My advice is to "self insure" as much as possible ( taking a larger deductible). By taking higher deductibles it will free up some premium dollars for you. I would always take those premium saving and put it Into a vehicle that is going to protect you in case of a major catastrophic loss, like a minimum of a 2M umbrella policy. By taking a larger deductible the most you are out is additional $500, $1000, or maybe even $2000 in a larger loss. More then likely this will not be a life changing event in an event of a claim, if you were planning a steak dinner that night it probably isn't going to change your plans. On the flip side if you have low limits of liability and you were negligent in a major catastrophic loss and have a law suit filed against you for $500,000 and you only have $250,000 worth of coverage that is definitely a life changing event!!!! The basic principal of business is you can not pay little and expect a lot, it can't be done! Combining your auto and home is a great pay to lower costs, by doing this you can get multi- policy discounts, common loss deductibles and great saving programs. I am with a company that if you stay claims free for three year and have your auto and home insured with them they will give you 25% of your insurance premiums back every year in form of a refund check. Long story short we all work very hard for where we are at today, we obviously cherish our life styles and loved ones, don't short change your self. Look beyond the premium and make sure you are properly protected and then way out the deductibles choices to make the most of your premium dollars.

[dougger222]

In the past 15 years have changed carriers 5 times. Currently with the same carrier as I've had in the past.

It's wise to hire an independant agent like others have mentioned. They have the option of contracting with seveal carriers.

Know two people who got rate increases and they talked to their agent and they got the price back to the old price. One was a staff agent the other an independant.

I work insurance claims so know the ups and downs of most carriers. What's true of most is they take turns at being good and bad. Won't go into the details but have seen some trends in the past 10 years.

[dougger222]

Deductibles can of course change your premiums. My three homes all have deductibles of $1,000 for all perils except wind and hail which is $1,500. Had a claim on the rental property two years ago and although the claim his $30K the premiums didn't go up a penny.

We've done claims with deductibles of $5K and as much as $10K!!! Some carriers are going to a 2% deductible. Some of the claims with these carriers have had deductibles up to $7,500.

A $1K deductible IMO would be industry standard for MN. Of course we see some $250 and $500 deductible.