Category Archives: rates

05.21.15
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When your “competition” helps you

So I was playing around with on-line quoting and of course had to use Geico.  Recently, now about 3 months late I received a well done email.  Obviously now part of a drip campaign.  This is not remarkable but what was there certainly is.

Coverage Coach

FANTASTIC.  First of all it is a very cool tool.  Clean screens, easy to use, etc.  But why is this important?

BECAUSE THE COVERAGE THEY OFFER IS NOT AS GOOD AS WHAT YOU DO!

That’s right.  I went through it ten times with a variety of combinations and every time I came up with less coverage than what I would offer a similar person.  Baffled by this but not surprised.  I’ve been replacing Geico policies for years.  When not replacing them I am encouraging(sometimes begging) people to please take higher coverage.  Most of the time it works.  Let me speculate on why;

  • They think they are saving you money?  In theory they might be.  In reality, 9 out of 10 times they aren’t.  Really.  If you could save $50 a year or have $400,000 which would you choose?
  • “But you don’t need that much coverage…”  Prove it.  While you are at it go to the store and by me a lotto ticket.  Same scenario.  Also, if you have not noticed, companies partially base your rates on previous liability limits.  Lower limits typically leads to higher rates.  Your call.
  • $250 deductible?  $500 deductible?  No coverage on a $5000 vehicle?  Baffled.  When it comes to your comprehensive and collision coverage(also known as physical damage) consider a few things.

1. If your car is safe to drive and presentable would you get that small dent fixed?

2. Ask a body shop how much work $500 actually is?  Also ask about $1000.  Oh, by the way, the odds of your rate going up for a claim less than a $1000 are as good as over $1000.  Basically whatever you collect for the claim you’ll likely pay back over the next 3-5 years.

3. What your car is worth and what it is worth to you may be two different things?  Math doesn’t lie.

Just some quick thoughts.  Unfortunately the philosophy behind Gecio may be getting more of a life with some of the new “quoting” companies.

Just some thoughts.  Use if you want.

 

05.14.15
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Dear State Farm,

One thing that seems to continually bother me is when the wealthiest people and companies choose not to really do the world some good.  When they choose profits over people.  When they are genuinely in a position to change an industry for the better which will increase their profits and genuinely help the American public and they choose not to.  Baffled by it.

Why write today?

  • Because every time I receive another letter from you I wonder why another tree branch had to die.
  • Because I wonder why a huge company allows their product to be so diluted by advertising.
  • Because I wonder about the last time you or I calculated any savings in percentages.
  • Because I am wondering if there is anyone who can accurately calculate a discount on an insurance policy.
  • Because I am wondering why, in the age of specialization, personalization and niches you still send to “or Current Resident”
  • Because I am wondering why, if you are really a good neighbor, you don’t use local printers and mailing operations.
  • Because I am wondering why you are still using white envelopes when there is science behind using colored envelopes.
  • Because I am wondering why you use a standard #10 envelope when you can mail one twice the size for the same cost.

Oh, and your copy stinks.  Seriously, do any of your agents have enough time to “take a long, hard look at all the possible ways you can save….” Really, if you are still combing through policies you have bigger issues.

But then again you are the largest insurer in the U.S.A.  You also have fifteen agents within about ten miles of my home.  **That is scary**  What do I know.  Either way, thanks for reading.

Sincerely,

 

Billy Van Jura

 

Disclaimer; There is good and bad in everything and advertising/marketing is no exception.  We are reminded of this every time we open our inbox, our mailbox, drive around, listen to the radio, watch T.V. etc.  I suppose the other side of this is that the lazy, spam like advertising perpetrated by many companies actually makes average advertising look good and good look great.

01.22.15
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Let’s go shopping

So it is time to take my own advice again.  With renewals for auto and home insurance pending I decided to do some shopping.  I’ve definitely written about what to do when your rate goes up but this time I did things  a little different.

START; Unfortunately my home is basically unmovable, two claims in less than five years.  So I look at what the rate will be without a multi-policy discount.  But wait, it gets a little worse.  I had a stretch in 2012 and early 2013 with three tickets.  Not good.  But, on a plus side, my wife’s two claims are now over five years old so they fall off.

  • no your record.  no that all claims/tickets are not being treated equally
  • time on a record will vary as well
  • make sure you are not being charged inadvertently.

Now that I know my record and know my real home rate lets go shopping.  So I am trying to avoid the “lead” companies so chose; State Farm, Liberty Mutual, Nationwide, Comparenow, The Zebra, Coverhound, Geico and Esurance.  Remember; there is always a better rate available but your time is likely worth more than what savings you’ll find.  Best to limit your search. So I learned a whole lot.

  1. The future is on-line, yes you already know that, but in insurance we are still in the early phases.  Lots of room for improvement.
  2. Expect to give some basic personal data.  Your date of birth and address as well as those from other drivers
  3. Don’t be uncomfortable; if your vehicle information, prior insurance information and driving history comes back automatically it is ok.  Saves you time.
  4. Might as well disclose your tickets and accidents.  Saves you time
  5. PLEASE PLEASE PLEASE read the fine print.  There was lots of it.
  6. READ CLOSELY, there were lots of not so good things with the coverage sections.  I find many to be unethical and quite shameful but then again I’m human
  7. Some of these sites really need to work on their writing.  Lots of inaccuracies and false statements.
  8. Pay attention to ESTIMATES everyone had a disclosure about when a rate was accurate.  Some only provide estimates then sell your data to the companies
  9. You would not want your family to be hit by a car with what most of these options consider great coverage
  10. Computers are not human and this exercise further confirmed that the programmers behind the sites could use some education

My observations are a bit different than most since I am in this business.  I also have a lot more observations about how inefficient these sites actually are.  But where would I start?  Anything(just about) that saves me time is a good thing.  Copywriting/Content writers whatever they are called are pretty important, they should really sit down with the attorneys and think things through.  Could easily list 3-5 errors on each site.

Final thought; Geico and Esurance provided a pretty impressive “experience” despite their awful recommendations.  Like the rest of your life, it is buyer beware.  Computers can replace humans for many basic transactions but I have yet to find a site close to me or many of my counterparts.

12.06.13
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Math and value and flood insurance

Woke up early and was immediately thinking about one of my last conversations yesterday.  Let’s start with some math;

If you spend $1000 and in return I lower the cost of something by about $3000 what could you consider your return on investment(roi)?  $2000 not bad.  Not bad at all.

So in the first year of this new product you saved $2000 by spending $1000.  Now in the second year(assuming current numbers stay the same) you actually save $3000 since you do not spend the $1000 again.  So you have now made $5000 by investing $1000.  500% return.

Now let’s say you need to keep that product for 10 years so $2000 the first year plus $3000 *12 = $36,000 for a total of $38,000 . **Average time in a home is 13 years** All because you invested $1000.

DISCLAIMER; This is math based on the current situation in flood insurance.  Where a provisional rate is approximately $6000 but if  you invest $1000 there is a very good chance you will see that reduced by about $3000.  With this being a brand new situation(roughly 4 months old) it is to early to make these figures more accurate.

**Real Estate version;

Is not spending $1000 worth losing a buyer?

Is not spending $1000 worth delaying a sale…and possibly losing the buyer?

Is not spending $1000 today worth saving maybe $38,000?

This is no different than upgrading your bathroom, lighting, landscape, paint, etc.

So at the present time here is my explanation as to why I will not guarantee the above; http://www.youtube.com/watch?v=9MGTq0QHWCQ

Let’s look at it another way; DEDUCTIBLE math

So you are getting $250,000 in coverage and want the same $1000 deductible as your home.  Your rate is $6370 BUT factor in you think FEMA is nuts (they are) and you firmly believe there will be NO FLOOD at your home.  So you take a $5000 deductible.  New rate of  $4988 savings of $1382.  The math looks weird, you take on $4000 more in risk but this year you save $1382 plus year two $1382 plus year three and what do you know you are now in the clear (assuming you saved this savings)  risk averted.

Remember insurance is an exchange of risk.  Flood rates are nuts because people were not paying enough into the big pool of insurance.  The only act of government that I believe will fix this is when the government GETS OUT OF THE FLOOD INSURANCE BUSINESS.

When deciding on how to spend your insurance budget don’t just settle for what the crowd says is right.  Your willingness to take on more risk is rewarded with a savings which you should value.  Especially if you place no value on the flood insurance you have to buy.

Just some thoughts.  Please open your mind to some new ideas.

 

07.29.13
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Who uses the phone book?

So like a lot of people, a phone book shows up in a plastic bag in my driveway.  Seems like it happens a couple of times each year.  For whatever reason this weekend I decided to open the bag.  Yes, it is smaller than I remembered.  It is also apparently very eco-friendly addition produced by Hibu .

Now, I am sure somebody keeps them and uses it a few times a year.  My household does not, fortunately today is garbage day so it is now in the recycle bin.  I did learn about www.yellowpagesoptout.com and have now opted out of the three available books.  Now what?

Do you have Google?  Then why would you need a phone book.  I feel kind of the same way about Angies List .  I firmly believe it is great to get recommendations but I prefer to get them from friends not strangers.  Again, I can see why some people need this sort of service.  Sort of a shame though, relying on an online forum rather than human beings you know.  So like all things I take a look at the insurance side of things.

In the yellow pages there are 200+ insurance companies listed.  Some are agents who take on numerous listings.  Others are names I recognized that are no longer in business.  I suppose I hope that they are not paying for these listings but some have full blow ads.   This is sad to me but hey; do whatever works for you.  I do wish I new who called them because of these ads, that would be much more interesting than the ad itself.

Bottom line, my phone book is my phone.  If there is not a number in my personal listings then I search via Google or even Facebook.  How about you?

 

Either way, just a thought.

06.10.13
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Can you send that to me in writing?

I say this a couple of times a week.  When it comes to insurance there are two specific times that this is a popular phrase; claims and loyalty.

With claims, I am asked “but will my rate go up?”  Odds are pretty good but it is not certain that your rate goes up if you file a claim.  I have seen plenty of awful driving records but since they have not had their records reviewed by the current company the rate is solid.  That doesn’t mean rates do not go up with claims, it just means that you have somehow avoided having your record looked at.  Also find it amusing to watch Nationwide and Allstate advertise “diminishing deductibles.”  Seriously, most people do not have claims.  The most common claim is an auto insurance glass claim and that already has no deductible.  In my opinion you are better off holding on to to your money.

 

How about loyalty?  I have said it before, please reserve loyalty for people that earn it not companies.  Should you be rewarded for your time with a company?  I think so, the longer you stay with a company the more profitable they can be.  BUT, Please show it to me in writing.  Unless you have it in writing let’s not “hope” your loyalty is worth something.

Just an idea, thanks for reading.

06.03.13
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The value of discounts

is not really what it seems when it comes to insurance.  Reality is they are a seemingly wonderful tool used to advertise to the masses of people that are required to have insurance.  Do they create a savings, yes they absolutely do.  Are they worth paying attention to?  Yes, if you  are entitled you should be asking about them and receiving the credit.

BUT, the reality is discounts are not nearly as critical as your credit score, home ownership status, marital status, education and driving history(sort of but not a factual priority list).  So why don’t the big companies advertise this?  Because it would really upset some people.  BUT it may also encourage some people to choose to improve their credit and driving history.  The other three don’t leave much room for adjusting but if you focus on improving your credit you will see more of a change then with any particular discounts.

It is what it is, not a pretty topic and although you may not agree it plays a role and there is more than enough evidence to support the use of credit.  Either way, since you and I will not change the system, let’s instead learn the rules and figure out how to use them to our advantage.

Just some thoughts, thanks for listening.

06.01.13
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Thank you State Farm

Thank you for being so large and mostly doing things so good that you force the entire industry of personal insurance to raise their collective “game.” Of course the larger you are the more chance you have to make mistakes so I do not give a whole lot of thought to the usual complaints.

Now I have spoken previously about your awful use of marketing so will not be walking that road today.  I did want to imagine something though.  What if you spent a small portion of your money actually helping create better customers?  Well you have the most customers, by some estimates 1 of every 5 cars, so in theory you can have the biggest impact.

How about instead of letting 5 agents in Poughkeepsie send out the same stupid letter about multi-policy discounts and “saving” $825 you include some education.  Here are some thoughts;

  • You use credit as a part of your rate.  How about some basic tips on improving your credit
  • How about telling people taking a defensive driving course will help?  You can probably drive down the price of the course and maybe make it better?
  • How about pushing the annual review?  You know you have plenty of claims where a home was not properly insured.  Maybe you can get Accucoverage to release a wide scale version of their site.  Heck maybe you can make your own?
  • How about coordinating your marketing?  Maybe then you can print on 100% recycled paper or even use postcards.  Lot of waste here
  • How about you be the first company to institute rate reductions instead of rate increases?  My goodness this would be fascinating to see.  Don’t be like Allstate and charge people for the “privilege” of being rewarded for good behavior

Just some thoughts.  Your HUGE use your size to the advantage of an entire industry.

 

05.20.13
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Big portions = insurance discounts

Stumbling through any amount of commercials can be entertaining and also very revealing.   Many times entertainment takes precedent over information.  Actually more times than not things are done to get your attention in the hopes that  you will provide some attention/dollars to their product.

I have harped on insurance discounts for a while, bottom line is any list of discounts you can provide does not out do your characteristics.  Your credit score, education, residence and marital status mean way more than all the discounts.  But talking about this, the facts, is not appealing so we disguise it with discounts.  Same thing with food.

Everyone is different, my household prefers the produce from farm markets and local markets to big chain stores.  Having tried both  the local is just better and the cost is comparable.  This is true with meat as  well.  Local, grass fed meats are just better.

So what does this have to do with insurance?

Watch restaurant advertising; none of the dishes you see on T.V. or in print ever look like what you get?  Does getting a portion big enough for two people add value or take away?  If you can get three courses for $9.99 don’t you ever wonder what exactly are they serving you?

Look for VALUE not “deals”

Value means you are paying a sum  of money that you feel is fair for what you get in return.  If you spend a little more than average but the chef is better, the atmosphere is better and the meal is memorable  that is value.  If your insurance agent actually has ideas and a plan and is not just taking your info, putting it into a computer and then spitting out a “quote”  that is value.

Just an early thought.

04.04.13
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Who causes “higher” insurance rates?

Most people will immediately think it is the company.  The company sets the rates and the underwriting standards that you accepted when you signed your contract with them.  The company determines which of your tickets, accidents and claims will have an impact on your rate and for how long. ** Despite what you may have heard corporations are not people and cannot get tickets or have accidents or claims**

The company determines which of your personal  characteristics influence the rate.  They also decide which factors of the house or  other property you chose to buy will determine the cost to insure.  Insurance companies decide what the rates are where you  chose to live.  The company set up any billing fees that exist as well as any discounts that exist for paying your premium in one or two payments.  Each year before your policy renews the company mails you new paperwork to review so you have a chance to ask questions and make adjustments.  You  also have a chance to review everything on your policy and if you felt so inclined could call around to other companies for a review. **Per a Google search, there are about 2648 insurance companies doing business in the U.S. that offer auto and home coverage***

So who makes insurance rates higher?

P.S. You  also may be with an agent or company that takes advantage of your loyalty and offers you some sort of silly ploy about accident free credits, etc.

P.S.2 Just like when looking for somebody to date, there  is somebody out there that likes you and your characteristics.  Maybe it is time to find that company….and be willing to find a new one next year.

 

Just some thoughts to consider.  You have more control than you think.