Ask an insurance expert: the insurance non-bs thread

really good questions!!!!

insurance is an evil necessity. but it’s a free market, so you have some control over things. not much though.

there are probably well over 100 different rating factors insurance companies use. you will never know most of them. even i don’t know most of them!! i tell people to worry about the factors you can control - coverages, vehicles, drivers, driving history, etc. don’t worry about the factors you can’t control as that will just make you more upset. if you do a quote online with any company every question you answer will be a rating factor. highest level of education? occupation? zip code? relatives who live with you? how long you’ve had your vehicle for? safety features of your vehicle?

insurance companies will use only certain information contained in your credit report to calculate an “insurance credit score”. you’re not applying for credit with us, so we don’t use fico. good luck finding out what info we use. i don’t even know.

clue = comprehensive loss underwriting exchange.

this is a report which contains accidents and comprehensive losses insurance companies have reported in your name, to a company called lexisnexis. you can obtain a free report from their website and you can even dispute anything on there you feel is incorrect. good luck on that, however. we use this report and your mvr to find out about your driving history. remember calling your insurance company and telling them about your broken windshield? that’s a claim and it will be on your clue report.

thanks for the head’s up in the thread title. had no idea about that!

fee free to ask more questions. insurance sucks, but i’m willing to be honest at least. lol.

and of course..... although i am a licensed professional, anything i say cannot be construed as legal or binding, and always check directly with your insurance company to confirm how they operate.

 

Awesome, thanks for the quick reply!!!

You’re offering a terrific service to the community

 

use it, don’t abuse it.

roadside service is usually very cheap to add to your policy, sometimes costing you less than $1/month. but if you use it too much you could get fired from your insurance company.

this add on is so cheap it creates a loss for your insurance company the first time you use it. it can take the insurance company years to recoup that loss. so if you use roadside too often within a policy period, you may get dropped!!!

 

As you are aware, sometimes rates increase even after an accident that was clearly not the policy-holders fault. Why is this?

 

ah, the dreaded “not at fault” accidents.

people hate hearing this, but even not at fault accidents are still a rating factor because they are viewed as an additional risk. not the answer people like to hear, but it’s true. it can show a trend of unsafe driving habits.

 

So basically, if you have even potential claim-related contact, your “rating” is effected and your price rises.

The best method to keep your rates down, is just send in your money, never have a claim, never make contact (unless it’s to send in more money via new or expanded coverage), and shop for new policies every 5 years.

The only difference between insurance and racketeering, is that one is legal (and mandated in most cases) and the other isn’t.

 

Is this true even if say, I'm at a red light, and someone comes barreling in and rear ends me because they were on the phone, that my rates would rise? I don't know what else you could possibly do in that situation other than not have been driving to prevent something like that happening.

 

switching companies can have an adverse effect. your insurance history is also a rating factor, so if you’re always jumping ship, it can put you in a different category (tier), which can effect your new price. however, if you stay with a company long enough you’ll find that no other company can beat them. loyalty goes a long way but your premium is influenced by so many other factors, you really don’t know until you shop around.

 

I assumed rates still increased even after no-fault accidents because, depending on the accident, the insurance company can look at it as though you weren't being as vigilant/defensive driver as you could have/should have been.

My sister has had several 'no fault' fender benders over the years that have increased her insurance rates. I've only ever been in one accident (no fault) in 18 years of driving. I always tell her she needs to be more defensive while driving, even though she wasn't at fault she may have been able to prevent most of them by being more aware of the drivers around her

 

they *could*, yes.

 

exactly. at some point there could be a trend of non defensive driving, which would make you a risky customer.

 

How do insurance companies feel about all the new safety features on vehicles these days like lane assist, automatic braking, etc.? On one hand I could see them being in favor of it but long term it seems to be breeding a generation of lazy drivers that aren't as attentive to the road because they grow dependent upon these new automatic features.

 

usually, discounts!!!

depends on the company, state and policy but...

antilock brakes
auto emergency braking
airbags
daytime running lights
gps tracking services
passive alarms systems
vin etching

 

I’ve never stayed with a company less than 5 years. However, every time I’ve changed, it’s because my rates began to increase for no seemingly good reason. Go out and get some quotes, and usually save 25-30%. That cycle seems to be about every 5-7 years for me.

 

Great thread. I have one that I could use a good non-biased take on......

Guaranteed renewal clause in the auto policy. How important is it? there is a cost associated with this I am aware.

We have been with the same big name agency since we moved to NC in 2005. Married 20+ years, in our upper 40's, 1 son who will be getting his DL next week. He recently purchased his first car, saved up and got it done. We added that car to our policy with liability only, comprehensive / collision on a 12+ year old car on for an inexperienced driver is cost prohibitive. He wrecks it, he fixes it.

Once he gets his DL next week, he will go on the policy. We are also going to have them re-write the policy without the guaranteed renewal clause, big savings to be had. we have a long history of safe driving, no major claims (maybe 2 windshields in 15 years), and good credit we both are around 800 +/-

Also, recently shopped insurance around to a few different agencies / brokers for the fist time in 15 years. I felt we had an upward creep year to year in our premiums $$. Just to keep everyone honest. Ends up our current agency has been fair to us, and are very competitive in the current marketplace, we will stay with them. Good people, good service.

So, how important is the guaranteed renewal clause ?

Thank You for your insight.

 

very complicated topic, and very rarely discussed!!!

basically.... you will pay more and it may backfire. very few companies that i know of offer this for personal auto policies. here’s the issue - if the market or your rating factors change and your insurance company is going to lose money on your policy, they could drop you or make you write a standard policy.

is it worth it? it’s very hard to say, but most of the time, not. this greatly depends on any other perks you’re getting for things like bundles and such.

 

Thx ! in line with what they told me. muchas gracias

 

Just called my insurance company up to make some changes as I work from home full time now, and drive less than 50 miles a week now. Got my rates dropped down $21.13/month!

I also have additional coverage on all my skids, sliders, suspension, and RTT. I'm paying additional for this (which is fine), but how does this get paid out or factored in if something happens to my truck? If my truck is stolen, do they pay out what I have the items listed as? I put rough numbers for what each item is worth. What if it's totaled?

 

Dayum...color me jealous. I'm at $113/month right now which isn't terrible for how much I drive, but my deductible is high.

 

I think I phrased poorly. My rates decreased by a total of $21.13. I'm now paying about $108/month. It was at almost $130/month. I wish I was only at $21/month!