Hacker News Reader

Comment by inetknght | Hacker News Reader

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.

View on HN

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.

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.

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.

Reply on news.ycombinator.com