Is it worth switching auto/home insurers?

[Mackenzie Click-Mickelson]

Advice #3: Before changing carriers, know your state law. Many states have "Guaranteed Renewal" laws built in. These laws vary. In the state of Louisiana, for example, a Homeowners policy cannot be non-renewed after 3 years in force, except due to VERY specific reasons. You don't want to switch carriers to save 100 bucks, only to find yourself Non Renewed because you make 1 claim in the first 2 years.

That pans out to many states. Not necessarily the 3 years part but that after your Discovery period (usually 45-60 days since inception) there's a lot less non-renewals that can be done. That's mostly home as auto there's a lot more leeway on that.

I non-renewed quite a bit of autos but almost never did homes because there wasn't as many reasons I could do it for. It was also rare for me to be able to legal notice cancel which meant a cancellation before renewal date. Autos I could do it for things like non-rated exposures, misrepresentation by the insured (often an insured engaged in a business not appropriate for personal lines), insured moved to another state, etc.

Homes would mostly be either claims experience or inspection related (either at new business or random periodic inspections later on). Those were either handled by claims or by Account Underwriting (licensed underwriters) but when I got a call about an insured's policy being non-renewed due to wood rot I was the one who would look over the photos to see if it was rectified and could reinstate the policy at that point.

 

[sdk1231]

That pans out to many states. Not necessarily the 3 years part but that after your Discovery period (usually 45-60 days since inception) there's a lot less non-renewals that can be done. That's mostly home as auto there's a lot more leeway on that.

I non-renewed quite a bit of autos but almost never did homes because there wasn't as many reasons I could do it for. It was also rare for me to be able to legal notice cancel which meant a cancellation before renewal date. Autos I could do it for things like non-rated exposures, misrepresentation by the insured (often an insured engaged in a business not appropriate for personal lines), insured moved to another state, etc.

Homes would mostly be either claims experience or inspection related (either at new business or random periodic inspections later on). Those were either handled by claims or by Account Underwriting (licensed underwriters) but when I got a call about an insured's policy being non-renewed due to wood rot I was the one who would look over the photos to see if it was rectified and could reinstate the policy at that point.

Ahhh... you sound like an Underwriter. I'm Executive VP, Underwriting. 30 years. Ugh. You are correct, it's much easier to Non Renew a policy than it is to Mid Term Cancel a policy, which is only done in very rare situations. Non Renewal is closely regulated by all states, for both Property and Casualty. Auto Non Renewal is "easier", because you have tickets and accidents... but some states still require a certain number of either/or in order to Non Renew after a policy has been in effect for a certain period of time. It pays to know where you are before switching carriers.

 

[mjkacmom]

I switched homeowners after 25 years, what a decrease! Then I switched back, it was even cheaper! Car insurance, 7 drivers, I was just happy not to be dropped (now just 5, 3 vehicles, under $6000 a year, happy).

 

[Mackenzie Click-Mickelson]

Ahhh... you sound like an Underwriter. I'm Executive VP, Underwriting. 30 years. Ugh. You are correct, it's much easier to Non Renew a policy than it is to Mid Term Cancel a policy, which is only done in very rare situations. Non Renewal is closely regulated by all states, for both Property and Casualty. Auto Non Renewal is "easier", because you have tickets and accidents... but some states still require a certain number of either/or in order to Non Renew after a policy has been in effect for a certain period of time. It pays to know where you are before switching carriers.

Yeah underwriting was a lot of what I did although a ton of that was the agent calling "why is my insured's rate what it is" and cue the investigating I had to do lol.

I honestly never non-renewed due to tickets because that was taken care of in someone's rate if their MVR was run during renewal. To my knowledge CA was the only state the company I worked for wrote in that required someone's MVR to be run every renewal as part of CA rules. Otherwise it was more a periodic one. I remember one year MO did a bulk running of MVRs for example. But the products most states had with the insurance company I was with had a large allowance for points, they just charged you for it. I once saw a NB policy where the person had a decent amount of DUIs and still was eligible with the standard company (vs non-standard subsidy). Their premium wasn't pretty though lol. But that 17 yr old you didn't add to your policy but got into an accident? Yeah I non-renewed you for that. So long as you added and rated them I could rescind that non-renewal. Sometimes I would have claims call me and ask how much premium would we get if so and so was added the day before the accident and this would be for claims making the determination if they would cover the loss or not.

But yeah in general when on the DIS I usually describe it as each insurance company is filed with the DOIs of each state and in order to stay in compliance they have to abide by them. States have their own rules as well as part of their DOI that all insurance companies would have to follow which is why some insurance companies refuse to do business in certain states. The insurance company I worked for did not write their standard company in FL. They also did not write in the Carolinas due to being very pro-insured. Michigan was highly unprofitable on the auto side. CA was highly unprofitable on the auto and home and the company should have pulled out of both states long ago but alas did not. CO experienced a lot of wild fires. OK a lot of tornadoes (so a lot of roof replacements).

Totally right to know where you are before switching. From my role unless against compliance I could choose to override a Decline with Legal notice for New Business if for say someone had a theft loss that would have made them ineligible but they were bringing to the table an Umbrella policy, auto, life, specialty, etc. It ebbed and flowed. Some times if the company was experiencing too many losses then we'd tighten the belt other times they would loosen it.

Discussing non-renew vs cancel with legal notice there were a handful of times that we would find out something and the renewal processed like a day or two prior, poor timing on our parts but a win for the insured until the next renewal.

 

[RamblingMad]

My vehicle insurance keeps going up. My significant other changed, and hers is going up. They are all raising their prices.

 

[robert chapman]

YES YES YES. I shop every two to three years. I end up saving $300-$400 every time I do it. I use one of those agents that shop all the ones for you. The better rates are usually with lesser known brands that do not advertise every second of everyday, I'm looking at you Geico. They are just as good and when ever I have had a claim (2 in 13 yrs), I have never had a problem.

 

[shh]

30 year insurance industry executive here. Worked for several extremely well known national and international carriers. I'd recommend finding a good, reputable Insurance Broker in your area. Phone them or set up a meeting to discuss your current carriers and coverages. Insurance brokers represent many different insurance companies. They will shop your package to those companies and present you with various recommendations. Insurance Brokers are different from Direct Insurance Agents. Direct Insurance Agents are "captive" to the company they represent and include State Farm, Allstate and Farmers. If you are only interested in Direct Writers, you have to do the work yourself - call around and get quotes. Direct writers are "starter" companies. A lot of people make the mistake of staying with Direct Writers even when they've outgrown those companies. Also of note, all property & casualty insurance rates are filed and approved by the State and are available for public knowledge. You can research to see what increases your company has taken year by year versus other carriers in the same state. States will not approve any rate increase that is not actuarially demonstrated need.

Advice #1: Find a good Insurance Broker and have them shop your package.

Advice #2: Take a good look at your deductibles. If you rarely file claims, and want your insurance mainly for significant / disaster scale events, do not keep a low deductible. Self-insure to some extent by increasing your deductibles. That's where all the rate is.

Advice #3: Before changing carriers, know your state law. Many states have "Guaranteed Renewal" laws built in. These laws vary. In the state of Louisiana, for example, a Homeowners policy cannot be non-renewed after 3 years in force, except due to VERY specific reasons. You don't want to switch carriers to save 100 bucks, only to find yourself Non Renewed because you make 1 claim in the first 2 years.

I know this may not apply to OP, but we have quite a few Florida folks on the DIS - including many residents who may have recently relocated or are considering it. Anyone living here may want to be a bit careful following some advice I'm reading in the thread.

Most auto insurance isn't really deductible sensitive here: it's high due to extremely agressive PI attorneys and so many unlicensed, uninsured drivers.

As far as home insurance, the biggest thing here is finding a company that won't go bankrupt - the market is extremely volatile. It's easy to find a slightly lower rate, only to lose one's policy a few months or a year later when the insurer is downgraded or out of business - and back to square one. Or worse - hit with a disaster claim and must fight a non-responsive fly by night insurer at every step.

Price shopping is great advice - anywhere but Florida. What one saves in short term premiums here may cause longer term grief.

 

[Mackenzie Click-Mickelson]

#2 was never the case for me. So much is state specific. Florida residents have very special circumstances and may want to be a bit more careful following some of the advice I'm reading in the thread.

One of the reasons explained to us about deductibles (discussing home at the moment) was in part that someone who has a very high deductible only truly expects to use it for catastrophe situations, those however are the situations that will cost the company a lot of money at once.

The idea is a higher deductible acts like a deterrent to filing small piddly claims which is something that does happen but there can be a sweet spot there where someone's deductible is neither too small (which means their financial burden is less to file more claims) nor too big (which means their financial burden is more but when a claim is filed it's usually going to be a bigger one).

Generalities spoken here but just giving some information on how we were taught.

 

[barkley]

I do the same for discounts, except my premium discount is for paying annually. I even have a spreadsheet where I track my mileage on a weekly basis to make sure I stay below my limit. Having an agent nearby is definitely a plus for me as well.

if i could i would pay ALL my policies on an annual basis but none of the auto insurers i've had over the year will do more than a 6 month policy so once a year i pay home/umbrella/atv/auto and then 6 months later i pay auto again.

while it's great to save on premiums, as far as homeowners goes it's even more vital these days to review your coverage to ensure you have enough/appropriate. we had wild fires in our region a couple years back and it has taken upwards of 18 months for rebuilds with owners learning that current costs have them in the high 5 figures under insured.

 

[tvguy]

One of the reasons explained to us about deductibles (discussing home at the moment) was in part that someone who has a very high deductible only truly expects to use it for catastrophe situations, those however are the situations that will cost the company a lot of money at once.

The idea is a higher deductible acts like a deterrent to filing small piddly claims which is something that does happen but there can be a sweet spot there where someone's deductible is neither too small (which means their financial burden is less to file more claims) nor too big (which means their financial burden is more but when a claim is filed it's usually going to be a bigger one).

Generalities spoken here but just giving some information on how we were taught.

My neighbor was an underwriter for Aetna/Travelers. He said with his company frequency of claims not the dollar amount was a huge factor in rates and cancellation. He said at the time he had signed off on canceling a homeowners policy for a customer of a few years who filed 3 claims in 2 years with them. I think he said the total payout was less than $5,000. It was the only policy the customer had with them. And at same time he was handling a homeowners claim that was likely going to exceed $1 million and that customer would never be considered for cancellation. That customer had been with them for 40 years, had no previous claims, and had their homeowners, auto, life and umbrella coverage with them. As he put it, from the stats we pretty much know how much to expect each year in major claims, the claims they have issues with are multiple small claims.

 

[fla4fun]

if i could i would pay ALL my policies on an annual basis but none of the auto insurers i've had over the year will do more than a 6 month policy so once a year i pay home/umbrella/atv/auto and then 6 months later i pay auto again.

while it's great to save on premiums, as far as homeowners goes it's even more vital these days to review your coverage to ensure you have enough/appropriate. we had wild fires in our region a couple years back and it has taken upwards of 18 months for rebuilds with owners learning that current costs have them in the high 5 figures under insured.

Yes, I prefer full coverage on both the house and the car. They send a breakdown of the coverage before they send out the bill each year, and three of us get together and go over everything to make sure it’s still okay. We don’t trust them to let us know when things change.

 

[Mackenzie Click-Mickelson]

My neighbor was an underwriter for Aetna/Travelers. He said with his company frequency of claims not the dollar amount was a huge factor in rates and cancellation. He said at the time he had signed off on canceling a homeowners policy for a customer of a few years who filed 3 claims in 2 years with them. I think he said the total payout was less than $5,000. It was the only policy the customer had with them. And at same time he was handling a homeowners claim that was likely going to exceed $1 million and that customer would never be considered for cancellation. That customer had been with them for 40 years, had no previous claims, and had their homeowners, auto, life and umbrella coverage with them. As he put it, from the stats we pretty much know how much to expect each year in major claims, the claims they have issues with are multiple small claims.

Yeah we discussed this before. Dollar amount of a claim isn't what gets you cancelled or not (usually that's about whether the claim is counted towards eligibility and chargeability) but you gotta go at it from the point I was making which was premium charged to the customer (as the conversation was about looking at ways to reduce your premium and effects a deductible can have on your premium).

Someone like myself who presently has a $1K deductible has a fairly low financial burden in filling a claim. BUT that also means that the type of claims I may file might be more likely on the smaller ends. (a notation that we find our premium to be good at the moment)

A person who has a $10K deductible has a higher financial burden in filing a claim but when they do file one it's going to be at least $10K before the insurance company will cover it. This is discussing claims related to your deductible as listed as some claims will have a lower deductible that is applicable.

It's just not as cut and dried the person who has a higher deductible is going to get lower premium because of that.

In terms of an insurance company filing a bunch of small claims means you're accident prone. That's a different type of risk but a risk for sure. That would get you cancelled/non-renewed potentially but not necessarily costing the company tons of money just by the virtue of filing small claims. We're talking about net profits to the companies which at least at my insurance company was referred to as CAT-smoothed meaning taking what the profits were AFTER the catastrophies were accounted for.

It's really hard to discuss this in brief concise enough terms but there's a lot going on in terms of insurance. What I was speaking of was discussing raising your deductible to lower your premium..that does not always work out.

 

[tvguy]

Yeah we discussed this before. Dollar amount of a claim isn't what gets you cancelled or not (usually that's about whether the claim is counted towards eligibility and chargeability) but you gotta go at it from the point I was making which was premium charged to the customer (as the conversation was about looking at ways to reduce your premium and effects a deductible can have on your premium).

Someone like myself who presently has a $1K deductible has a fairly low financial burden in filling a claim. BUT that also means that the type of claims I may file might be more likely on the smaller ends. (a notation that we find our premium to be good at the moment)

A person who has a $10K deductible has a higher financial burden in filing a claim but when they do file one it's going to be at least $10K before the insurance company will cover it. This is discussing claims related to your deductible as listed as some claims will have a lower deductible that is applicable.

It's just not as cut and dried the person who has a higher deductible is going to get lower premium because of that.

In terms of an insurance company filing a bunch of small claims means you're accident prone. That's a different type of risk but a risk for sure. That would get you cancelled/non-renewed potentially but not necessarily costing the company tons of money just by the virtue of filing small claims. We're talking about net profits to the companies which at least at my insurance company was referred to as CAT-smoothed meaning taking what the profits were AFTER the catastrophies were accounted for.

It's really hard to discuss this in brief concise enough terms but there's a lot going on in terms of insurance. What I was speaking of was discussing raising your deductible to lower your premium..that does not always work out.

I bought a new car in 2020 and Toyota Financial required I change my deductible from $1,000 to $250. I was shocked at how little the lower deductible changed my premium....literally $25 more for the 6 month policy period.

 

[Mackenzie Click-Mickelson]

I bought a new car in 2020 and Toyota Financial required I change my deductible from $1,000 to $250. I was shocked at how little the lower deductible changed my premium....literally $25 more for the 6 month policy period.

Yeah it's a good example of the deductible part. I saw where sometimes a $1,000 was more expensive than a $500 or a jump from $500 to $750 was a couple of bucks for 6 months when financially that doesn't make sense for an insured to do that if they were looking to save money.

My longer comment to you was talking about home deductibles, it's similar though not quite the same for autos just because there's a lot of variances in auto claims and threshold for frequency.

 

[focusondisney]

And right on cue, we got our homeowners bill today. The company we were with sold the homeowners division to Farmers early last year. This bill is after the first full year with them. Rate went up 25%. We were with the first company for about 36 years & had our auto & life insurance there too. So basically they unbundled us themselves. Hard to know why the rate increase happened.. is it just that company, is it because we don’t have any other policies with them, is it the increase all insurance companies are needing to make? I do think our previous rate was really good so maybe this isn’t out of line? I don’t think we want to change our auto insurance but if the rates are really better that way, we might have to.

 

[DLgal]

My vehicle insurance keeps going up. My significant other changed, and hers is going up. They are all raising their prices.

I hear this so much, but our insurance hasn't gone up on its own in over 5 years. The only times it has, it was because I choose to either increase coverage or decrease our deductible. Or, when I added my 18 year old son as a new driver, and even then, it was only +$155 per month (far less than I expected).

We have never made a claim in over 20 years with this insurer. Maybe that is why? We live in CA, cars are garage parked. Not sure why we haven't seen rate increases like everyone else apparently has.

 

[Frwinkley]

OP here:

Thanks for all the great replies. I've begun shopping around, using one of those online comparison websites. What a giant rabbit hole that is! Anyone have a good comparison website they can recommend?

Am I best to find a broker? Do they charge? I'd rather just do this over the phone if possible.

 

[tvguy]

I hear this so much, but our insurance hasn't gone up on its own in over 5 years. The only times it has, it was because I choose to either increase coverage or decrease our deductible. Or, when I added my 18 year old son as a new driver, and even then, it was only +$155 per month (far less than I expected).

We have never made a claim in over 20 years with this insurer. Maybe that is why? We live in CA, cars are garage parked. Not sure why we haven't seen rate increases like everyone else apparently has.

California from an insurance perspective has really been in it's own world since voters passed Prop 103 back in 1988
I love all the national insurance ads, especially for auto insurance, where if you read the fine print and see "Not Available in California" because whatever discount it is offering is illegal here.

 

[DLgal]

California from an insurance perspective has really been in it's own world since voters passed Prop 103 back in 1988
I love all the national insurance ads, especially for auto insurance, where if you read the fine print and see "Not Available in California" because whatever discount it is offering is illegal here.

Not too familiar with Prop 103. But we have very low insurance premiums, through USAA. I know that's not available to everyone.

 

[tvguy]

Not too familiar with Prop 103. But we have very low insurance premiums, through USAA. I know that's not available to everyone.

https://consumerwatchdog.org/uncategorized/proposition-103-resource-page/