Hacker News Reader

Comment by exhilaration | Hacker News Reader

The best thing you can do is shop for auto insurance every year or two. The longer you stay with a particular company the more likely they are to very slowly and carefully hit you with small rate increases until you're paying far more than their competitors will charge you. Insurance companies understand and exploit consumer behavior better than even the best marketers.

View on HN

I have USAA and can't say enough good things about them. Whenever I call them, they're there to walk through whatever I need with me. The first thing they ask is if everyone is ok; it's trivial, but means something. In general, their rates are really good; it used to be that, when other companies called, you could tell them you have USAA and they're acknowledge they can't match the rates and hang up.

Admittedly, not everyone has access to USAA but, if you do, I highly recommend them.

Noting this because I've been using them for insurance for decades with no intention of switching.

Another USAA member here. I haven't had to do an auto claim yet, besides simple windshields, but have had several property claims.

They have been great. In fact, right now USAA is in the subrogation process against the offending party for a claim on a bicycle.

I've been happy with their insurance products, their even better customer service, and have no plans of changing.

When I had a bicycle accident, they fully covered my new bike and related damaged equipment under my renters insurance policy. Service has been uniformly excellent for car claims as well.

Counterpoint, had USAA auto for 20+ years, added 2 young drivers and premiums went up 4200 per year. Switched to Geico and recouped 2700 of that.

Always shop around.

Geico is so huge I expected their customer service to be an absolute shitshow. Then I totaled my car, and they were actually helpful and easy to work with. I remain shocked to this day, and I’m still 90% convinced it was a fluke.

Geico seems to do a good job at auto insurance. But like everybody, they try to get you to also sign up for other insurance, and it appears all other insurance under their banner is actually from random other companies that aren't run by them or seamlessly integrated with their systems. And furthermore, their partners seem to be only interested in the association so they can overcharge, more than making up for any multi-line discount.

Tip, Geico will give you an 8 percent discount for owning shares of Berkshire Hathaway.

Do you just let the customer rep know?

Probably a joke from a bored Allstate agent.

Recently filed a collision claim with USAA. They undershot the original estimate but had no issues paying the full amount for repairs when getting the quote.

They refused to replace car seats for me when a USAA member hit me.

Not sure what the specifics of the accident were, but car seats are rarely damaged unless the accident is major, which may very easily total the car. If the car wasn't totaled, which certainly sounds like the case, then it seems unusual to have an accident serious enough to damage the seats. Unusual, but not impossible. Maybe that's the reason for the denial.

I personally had no issues when one of their insured drivers hit my car. I waited for the police report, which clearly stated the other driver was at fault, and I was promptly paid by them for the damage to my vehicle. I didn't have to file anything through my insurance and they were very easy going about the whole thing.

They sent me to the only authorized repair center within 200 miles, then the repair center left my car outside in the rain and filled with water for two months), then USAA fought me over my demands to have the car replaced. Only for the repair shop to have an unlicensed tech work on the car and do 80k in damage due to his failed welding / repairs.. It took 9 months to get that sorted out and USAA was horrible the whole time. I couldn't believe it.

Previously I had an M3 that had the bumper ripped off while parked and they had it taken care of fast, even going after the repair shop for non oem parts under the bumper.

I guess it's a really mixed bag with them over the past few years they've been expanding.

I was hit in a chain reaction collision started by a USAA member. No particular problem with them paying, but I chose subrogation.

> when other companies called, you could tell them you have USAA and they're acknowledge they can't match the rates

This is funny, I actually do say this. I co-founded Goodcover, we provide renters insurance and USAA is an inspiration. But we still have a really hard time beating them! I'm also a USAA Member (car insurance) and also can't say enough good things about them.

I want a product like policygenius.com, but instead of life insurance they have my entire insurance portfolio (auto, home, renters, umbrella, personal property) and constantly price shop for me automatically as a broker between me and every major insurer. I would also like such a product to be structured so that they can never be bought by Intuit or another incumbent, preferably in some sort of employee owned coop mutual company model (if Vanguard and USAA had an insurance broker child with a tech first demeanor).

Sidenote: I’ve been with State Farm for over 20 years, and my rates have only gone down.

A few months ago I switched insurance. I did some shopping with getjerry.com was very slick, didn’t end up going through them though because of large savings when going directly through the insurance company. Will try them again one year in the future. Saved $1.5K/yr

I have a lot of sympathy for this feeling - I am a USAA member, but through family, nothing I did. I feel fortunate that I qualify. My cofounder and I are trying to build a company a lot like you describe to bring "USAA style" to more people. We just did our launch HN last week (Goodcover). It's renters only right now so won't do exactly what you describe, but just wanted to say I totally get where you're coming from.

I've been with State Farm for over a decade in Texas. While I agree that I should have spent a hell of a lot more time shopping around, I'll also admit that I have _no idea_ how a lot of insurance works and frankly I don't care to spend that mental budget to learn to game it. My insurance rates are affordable to me and have only ever gone _down_ over the past decade. It even went down after having a collision and claiming about $6k in damages. The claims process was not a nightmare (contrast with stories from my parents' insurance companies) and was quite easy to deal with.

The GP is not suggesting that anyone "game" insurance rates, just that one should get a couple quotes after a several years to make sure you aren't being price gouged for being a loyal customer.

It's free, takes less than a half hour, and there's no obligation to purchase anything, it's just a quote.

People get mad if their rates go up for no reason. Geico appears to have a rather clever (perhaps obvious) algorithm - it seems like after a few years, they start raising your rate when you make any change to your policy, no matter what it is. So they aren't jacking up your rate at random times, but it's always ratcheting up.

if you've been with State Farm for over a decade, I would reckon you're getting hosed. State Farm agents only get quote from State Farm - they're not an independent brokerage. When I was shopping around (mid-30's, family, standard 2 cars) in the DFW area, they were the most expensive.

Go check out an independent insurance agent. It's not "gaming" it literally takes 20-30 minutes, and could save you $1500 over the whole year (especially if you have multiple cars).

To "nudge" you in the right direction, buy not switching, you're basically saying, "I make money at $1000/hour, so it's okay that I don't expend the mental budget to compare quotes".

That seems like a low time estimate to me, because the products being compared are opaque. What insurers promise they'll do and what they actually do when you need them are not always closely tied. So quickly shopping based on price alone encourages companies to shift from visible to invisible costs.

Car insurance is not that opaque. They are fairly standard policies, with only a few optional items. An independent insurance broker can quickly navigate through these for you.

You're right, though, that what insures promise to do and what they'll do are two different things - its hard to price that in upfront. I don't think the insurer in question, State Farm, is exceptional in that regard either. They dropped a family members coverage after 2 hail storms. They dropped a friend's company's policies after a single claim.

State Farm makes its money by bilking people with it's solo agent model. "Talk to your friendly neighborhood State Farm agent"...who only gets quotes from State Farm.

We would not do that in any other industry. Insurance is a commodity. It's like electronic items. We price hunt Amazon vs. Newegg vs Monoprice because we're nerds, we should do the same thing from our insurance providers.

You don't have to settle on some no-name insurance agency - you can set a high bar, but expanding your marketplace of options from 1 to 5 or 6 can only mean good things for you as a consumer.

Commodities are goods whose properties are standardized and, frequently, graded by an authority. As you give examples of yourself, the real test is what happens long after the initial purchase. Figuring out that side of the bargain takes more than a few minutes getting a price quote.

Car insurance is definitely not like a given electronic item, which is made to the same standards by a single manufacturer. It it's like some nerd purchase, it's more like flash drives. In theory commodities, manufacturers have a complicated set of incentives and the actual quality of the product may be hard to determine without extensive use.

I'm not against people shopping around. If people want to invest the time, by all means do it. But I object to the notion it's as simple as getting a quote. Getting more options can in fact sometimes mean a bad thing if you switch from a proven-reliable product to something that is cheaper up front but worse later.

I had State Farm in Texas. I knew I was paying more than other people, but didn't bother to switch.

Then one day while I was on the way to IAH to fly to Europe, an illegal alien in a stolen van (so no license, insurance, etc...) crossed the median and hit me head-on.

State Farm took care of everything. Ev. Ry. Thing. Even made sure I didn't miss the flight.

When I came back to America a couple of weeks later, my completely repaired car was sitting in their parking lot waiting for me. That's why I stick with State Farm, and am OK paying more than I would for "discount" insurance.

State Farm has only ever reduced my rate. They do it about once a year. I have shopped around and changing policies would cost be upwards of $50/month more than I currently pay.

Granted the best thing you can do for low auto insurance rates is to barely drive. Personally I drive less than 5k miles a year, and my rate reflects that.

Similarly, I've been with GEICO for over a decade now for my car and homeowner's insurance. GEICO is just a homeowner's broker in New York, Liberty Mutual actually insures my house. I shop every year or two and I've never been able to find a better deal than I already have for comparable coverage, even directly quoting through Liberty Mutual. Regardless, my GIECO rates have been consistently going up these past few years, but it seems every other insurer is also raising rates for people like me (location, history, etc) every time I check.

I've never had to file a claim for my homeowner's insurance and I've never been at fault in a car crash, but I've heard some not so great stories about GEICO so hopefully I'll never have to find out.

I have to say, I was impressed with my GEICO claims experience.

A GEICO customer hit my car, entirely her fault, so I just went through her insurance, didn't even notify mine. GEICO was extremely helpful, polite, and prompt and I wasn't even their customer. I opted to use their "full service claims center" which was located at [local reputable body shop/dealership]. I showed up with my car, they had a loaner ready for me up front ready to go with the keys in the ignition and the loaner car was very nice (just a family sedan but a nicer one). The whole process was just very straightforward and easy.

Several years later my car was hit by a State Farm customer, entirely their fault, I went through their insurance again. That whole experience was just shit. First they were disorganized and unhelpful. I decided to use their "full service claim center" since my GEICO experience was so good. The place they sent me to was out of the way and somewhere I wasn't familiar with. When I arrived it was some shady looking dumpy body shop. [I almost walked away then, wish I did]. Clerk didn't seem to be expecting me and wasn't prepared, even though I had an appointment to drop off the car and nobody else was there, so I had to fill out paperwork because State Farm didn't send over my information, I guess. After that I had to wait forever for Enterprise to pick me up (so "full service" means that the clerk will make a phone call). Then at Enterprise I had to stand in line and fill out more paperwork. They gave me a Fiat 500, which doesn't have a full back seat and at some point I had two passengers who couldn't fit into the back seat. After they finished the body work they literally didn't put the wheel back on right and it was a couple inches from falling off my car while I was driving. My usual mechanic was shocked.

Or build a personal relationship with your agent. I occasionally check my rates with competitors, and they can never beat my existing rate. My agent will call us any time there is a new program or discount that might save us money.

My agent understands the value of a long term customer who brings in other long term customers. When we started with him it was because my mother in law was already a customer. We just had car insurance at the time.

But as we moved on in life, we added a second car, then a house, then an umbrella policy, and so on.

Shopping for auto insurance has been completely useless for me. When I compared across multiple insurance companies, I was able to pick the "lowest cost" provider. However, when I went to sign up, the price offered was completely different from what I saw shopping on their website.

Also, I recently tried to compare my current auto policy with a different insurance provider. The new insurance agent told me my rates would go up with them, so I obviously declined to change my auto insurance.

I understand that periodically shopping for better rates is the logical thing to do, but in my auto insurance shopping experience, the numbers all seem arbitrary so shopping is not useful.

> However, when I went to sign up, the price offered was completely different from what I saw shopping on their website.

In my experience, the websites use an entirely different algorithm than whatever phone agents have access to.

I don't bother going through insurance websites' lead generation workflows, I just call a handful and get quotes on the phone from them.

Why is it that almost every company that provides a service with the potential to be in perpetuity, like insurance, always fee creep their customers to the point that you switch because you know you're being fucked compared to what the market "intro rate" for new customers is? You switch only to be back what you were paying before the switch after three months or another time lapse.

When there are few providers in any market, they are colluding to fuck consumers, that are forced into a musical chairs game for little savings.

I imagine it's because these are almost always public companies that need to show earnings growth. They are always trying to improve margins and their stock price. That's much easier than actually figuring out a great marketing plan to acquire new customers. And also far cheaper, too.

I like to think of this as "attention arbitrage".

Bank fees are a good example. To you and I, an extra $3 bank fee is annoying but not worth allocating enough of our attention to avoid it. We aren't in the business of spending our whole damn day minimizing random bank fees.

But bank administrators are in that business. They spend their whole day trying to figure out how to maximize thieir profit and when they roll out a fee they can apply to millions of customers. There are enough customers hit by this they could summon enough total attention to push back, but the attention is divided among all those people and easily conquered. Meanwhile, the bank's effort to apply that fee is concentrated among a small number of people whose very job it is to do stuff like this.

So banks and other businesses discover cases like this where the quantity of attention they are willing to devote to something is larger than what any individual customer is, and that's where they squeeze.

Because someone ran an analysis that says you can make $X more by doing one thing that doesn't cost you anything. Many companies just look at the numbers and say "sounds good."

It helps that since they are insurers, they know how make this analysis with a large degree of confidence.

I wish this was a reality here in BC, Canada, unfortunately our required basic car insurance provider is a crown corporation. So instead of competition we get to pay the highest rates in Canada, incur annual increases despite ZERO claims and finally, watch growing debt because of an inherently flawed insurance model. Good thing we have oceans and mountains..

This and also do not signup for e-delivery of new policies. I had this on with farmers for home insurance and never realized they had increased the premiums every year. It was my problem that I did not bother to login and check for the documentation section and then open the docs to see the price changes.

Yes, and you can shop easier by just uploading your current declarations page PDF or linking your account at gabi.com. Most people don't know they are overpaying. [Disclosure: I work there]

In Italy, auto insurance contracts are limited by law to one year in length, so that people are encouraged to re-evaluate their position and get new quotes more often, promoting competition.

I've never seen one longer than 6 months in the US. And I don't even think it's a contract for 6 months, you can cancel anytime and get a refund for the months you don't have it.

One year auto insurance in the US is actually super common. I never had it offerered/suggested to me until I became a homeowner - at which point my broker got me a small discount for doing a full year policy for both home and auto.

Sounds like a classic case of frog-boiling.

They call it the "loyalty tax".

Sad world we live in, right?

I'd imagine each of these companies has a bean counter for growing their subscriber base. When all insurers raise their prices a little on every policy renewal, people will rotate insurers and who's ever in charge of growth looks good due to new sign-ups, it justifies marketing spend, etc.

Probably why AAA likes to make a point of how long you've been a member. People don't want to lose that 'status'

Reply on news.ycombinator.com