Car insurance is a fairly straightforward concept. You pay a monthly premium, and in exchange, the insurance company covers you for things like crashes or theft. That monthly premium depends on a lot of things, including your age, your gender, where you live, how much you drive, and, importantly, your driving record.
The more speeding tickets and car crashes on your record, the more of a liability you are to an insurance company. And if you’re a bigger liability, the insurance company will charge you a higher premium. This leads to people avoiding insurance claims for things like crashes, instead opting to have the damage fixed under the table—that is, without getting insurance companies involved—as to keep their rates down.
According to a new survey from LendingTree, over a third of drivers questioned would rather eat the cost of the damage caused by a crash than have their insurance—which they pay for—cover the bill. And an even greater number of people have admitted to paying out of pocket to keep their rates down. From the survey results:
Insurance is designed to be a peace of mind. For some, it’s a source of fear.
A little over a third (35%) of our insured drivers have avoided filing a claim because they were afraid their premiums would go up. A similar LendingTree survey found that 39% of drivers opted to pay out of pocket for car repairs after an accident. Of those, 42% said they didn’t file to avoid a rate increase.
Interestingly, this number swung wildly depending on the age group surveyed. According to LendingTree, 78 percent of baby boomers said they’ve never avoided filing a claim due to fears of a premium increase. That percentage falls all the way to 44 percent for Gen Z drivers, with Millennials following closely behind at 43 percent.
Source: Brian Silvestro
There are some instances where it’s probably better to avoid calling your insurance company, like if you cause superficial damage to your own vehicle (LendingTree mentions rubbing against a guard rail or bumping a light post as fine examples of this). There’s no reason to add curbing your wheels or bottoming out your front lip to the record if you don’t have to.
It’s also important to note that not all claims will be held against you. If you have comprehensive insurance—the type that covers your car for non-collision incidents like theft, vandalism, hail, flood, or fire—LendingTree says that most companies won’t raise your rates for those types of claims. So make sure to check your policy before swiping your credit card for a huge repair bill. In the long run, the math might not work out.
The survey also asked about the rising costs of insurance, with some fascinating results. Over half the people surveyed (54 percent) said that rising premiums have them considering cutting back insurance coverage. And 48 percent of those surveyed said that financial constraints have them considering the same. And 58 percent say auto insurance “is a financial burden.”
Source: Brian Silvestro
Considering some of the rates I’ve been quoted recently, I’d agree with these people. I remember trying to get my old Mitsubishi Lancer Evolution comprehensive insurance a couple of years ago, only to learn it would be several thousand dollars for six months of coverage (I have no accidents or speeding tickets on my record). So I settled for the basic liability-only stuff required by law in New York, where I live. It’s tough out here.
The most surprising statistic from LendingTree’s survey is the sheer number of people who have driven with no insurance at all—something that’s fully illegal in every State except New Hampshire. An entire 30 percent of the folks surveyed say they’ve driven with zero coverage in the past. Millennials were most likely to pull this off, with 40 percent of those surveyed having admitted to doing it. Weirdly, 43 percent of parents with kids under 18 years old admit to driving without insurance.
Here’s some controversial advice: Don’t do this! Driving without insurance leaves you personally liable for any damages you may cause to your car or someone else’s. You’d also be responsible for covering medical expenses for injuries, which can easily reach tens of thousands of dollars (or more). Insurance might be expensive, but going into generational-level debt because you didn’t want to pay a few hundred bucks for your premium is not the move.
I left USAA Auto Insurance after 28yrs (Still use their Banking Services). 2022 renewal was a 37%increase for a 7yr old F-150, 6yr old GTI and a 4yr old Golf Cart. Wife and I both have little safe driver stars on our FL licenses which means no tickets or infractions in the last 6yrs. No claims in the past 20. Home owners with good credit. Reason for increase was a lot of corporate lingo that amounted to “you live and insure in Broward County, deal with it”. I am now with Progressive but will be shopping as they hit us with a 10% increase with no reason givien.
Possibly due to increasing flood risk from Hurricanes due to the hoax of climate change? I’ve been USAA for over 40 years with zero claims. I get quite irritated when updating my policy and one of their questions is “and your last traffic violation was speeding in 1988?” My response is that this should be off my record, but I get the response that it “technically” is no longer on my record. Irritating.
You’re required to report incidents to your insurance company as part of your contract with them. Language can vary, but is usually broad enough to cover any damage to your vehicle. And the insurers share information through the ISO and other databases.
So, you don’t report the incident because you think you’re not making a claim, but the other guy in a fender bender does to his insurer. Then, once you’re in a crash where you want to use your insurance, your carrier does a fun little thing called “post claims underwriting” and asserts you’ve materially misrepresented and won’t provide coverage, often times slipping a premium refund check in the mail that some people will deposit, not realizing what it connotes.
Carriers are not a good neighbor or any of the other jingles that they pump out in their billions of dollars ad campaigns. They’re a business that makes money and doesn’t want to pay it out. Give them any excuse not to pay and they’ll take it.
This is a great point. It pays to know your state. In a separate post, I wrote about our neighbor crashing our car on loan to him as a neighborly gesture. He required some medical care, but Alaska State Troopers said that in the event of a single vehicle crash, there is no accident unless someone claims an accident in their insurance. So oddly, driver was not cited for being stupid, driver agreed that any health care he incurred was on his personal health insurance, and our insurance company never heard about it. As far as the troopers were concerned, nothing happened. Strikes me as odd, but it worked out in our favor (as well as a situation like that can). I know for a fact that our name, license plate, and VIN were never recorded.
I’m pretty sure that there are (almost) no other states that have similar statutes.
Had insurance with one carrier for over 15 years. Moved to it because it was $250 less per year than previous carrier who raised their premiums every year over year. Replacement carrier had small understandable annual raises each year, not a problem. Last year they tried to raise it 20%. Nothing had changed, Ive never had an accident, not a ticket in two decades, have never had a claim my entire life, same car. My agent found a smaller, regional carrier with excellent ratings for almost the same pre-raised premium, so I switched just not the auto but my renters insurance as well. Interesting business model: Gouge your best customers and drive them away. Brilliant.
Also, insurance companies use FICO scores to adjust premiums as well.
I was shopping for insurance after I received a 20% rate increase (no claims, tickets, accidents, etc.). A quote came in that said it was affected by something negative in my history. I called them up and talked with an agent who couldn’t find anything (because it doesn’t exist). They suggested it might be my credit score, but that’s over 800, so that doesn’t make sense either. What I learned from this is that if they can’t find a reason to increase your rates, they’ll make one up.
The idea of using FICO scores to set your rates is just another contrived way of separating you from your money. Luckily, there are some states like California that said absolutely not. Not legal.
FICO scoring models are contrived as well. I had my FICO score lowered for not having a recent loan. Then when I partially financed a car to address this, the FICO score was initially lowered once again because I added debt. However, it did not take long to bounce back above 800 by making monthly payments a month in advance of each due date. If you wish to understand how sketchy credit rating agencies can be, read ‘The Big Short” about the 2008 mortgage CDO scam / crisis. It is not about FICO, but same idea.
I don’t think they have a ‘paid early’ benefit to your score, in fact that costs the lender interest so it’s not really a benefit to them.
I was going to ask if your state had any laws change on coverages or the like (mine’s had a couple over the last few years), but figure your agent would be aware if that occurred.
I do not believe there were any changes in State requirements, the new policy matched the coverage of the previous one as well, same deductibles, etc.
I’d love to see the numbers on homeowners insurance. We made one claim (vinyl siding on one wall after a wind storm) and our premium tripled for years until we finally sold the house. The next house was broken into the day after closing and our appliances were stolen. The insurance company told us that if we made a claim on that they’d drop us, so $2500 of replacement appliances just so the mortgage company wouldn’t give us a hard time about not having insurance.
The requirement that everyone have it just makes true competition a non-factor in setting premiums. That’s as much the cause of high costs as any other issue.
When I was an undergrad way back in the early 1980’s, I took an elective political science class. Being a SUNY campus, one part of the course studied the New York State Legislature. Found out that the majority of the representatives were made up of insurance brokers, real estate agents, or car dealers.
Why am I not surprised? Cynical me….
The system is broken when the thing consumers are supposed to use to repair their cars ends up being so expensive that consumers are afraid to get them involved. If your paperwork and bureaucracy needlessly adds a ton of costs to the process to the point where people are purposefully not using the thing they paid for, then you probably shouldn’t exist in your current form.
Just like our useless healthcare system in the US.
Long ago I raised my deductibles to $500. I knew this meant I would pay fully for new windshields but it certainly helped my rates. I used to sell cars and lot of my customers would pay for one month of insurance just to get qualified.
> 78 percent of baby boomers said they’ve never avoided filing a claim due to fears of a premium increase. That percentage falls all the way to 44 percent for Gen Z drivers, with Millennials following closely behind at 43 percent.
Yet again, nobody cares about GenX.
Whatever
What this is making me realize is that I should switch to liability only on all my cars. If I have a fender bender, I will pay for it myself so my rates don’t go up.
But what if I total a car by wrapping it around a tree? I pay about 5% of my car fleet’s value in insurance per year. I think there’s less than a 5% chance that I will obliterate one of my cars.
And if I total a car and pay for the replacement myself… I’m a nice guy, so I won’t increase the rates I’m charging myself for imaginary comprehensive insurance.
There is a bit of false logic here though. If you are basing coverage on a 5% chance of totaling your car because you are paying 5% of the value of your car, you need to remember that the 5% premium will now become 20% for the indefinite future because wrapping your car around a tree confirms that you are a high-risk driver.
I look at insurance as a way to finance your accident. They pay for the damage, but then they reclaim what they paid (plus profit) over the next decade through high-risk driver premiums. You buy insurance only if you cannot afford to take the financial risk of a total vehicle loss out of pocket.
I think your idea further justifies going liability only. If I wrap my car around a pole, I will part it out, or sell it for scrap, or turn it into a dune buggy. No insurance claim needed.
The number might seem a little high, but I can see how parents of younger kids could be too broke to afford insurance, which may be particularly outrageous if they have poor driving records and/or live in lower income areas with higher rates of crime (and claims). Not that I’m condoning it, but they’re likely saving thousands, not hundreds of dollars that they can’t afford to spare. I would also bet most of them have few to no assets and are living more or less day-to-day where future planning is a luxury, so their real world liability is low since judgements can’t take what they don’t have and there are no debtor’s prisons (yet).
Debtor’s prisons were outlawed in the US in 1832. With the rise of modern neofeudalim I can see a return. We work, and belong to the 1%.
I’ve always had insurance. No speeding tickets, I’m still leary about filing insurance claims.
I know it’s illegal to go without insurance. Which when you think about it, seems weird. I wonder if Jason would do a write up on this history, like his chicken tax one. If we’re legally required to have it, why don’t we just have it, and it’s subsidized by the government. If it’s required… I mean it benefits everyone to have it, so… Kinda like other insurance that… Le sigh…
You don’t have to have a vehicle, so people who are non drivers would probably complain about subsidizing drivers, (rightly so).
Public transit is subsidized, and baby areas have insufficient systems. Por que no los dos?
I think there’s a risk of moral hazard here. I mean, if I knew my car would get fixed every time I messed it up, it would impact how I drive. Probably not that much, however I don’t have faith in my fellow motorists.
Now I’m wondering if there are any countries with “single payer” auto insurance. Curious how it works, if it exists.
“I think there’s a risk of moral hazard here. I mean, if I knew my car would get fixed every time I messed it up, it would impact how I drive. Probably not that much”
Easy enough to find out. Go rent a car and opt in for the no deductible, full coverage insurance and see how it goes.
There’s nothing stating it would have to be equally cheap for everyone. You would be assessed based on your risk, and charged based on that, similar to how things are now. You can remove the profit motive from something without fundamentally altering its intent.
That’s a truly awful idea. The moral hazard inherent in subsidizing an 18-year-old buying a Charger comes to mind.
Most people – myself included – are happy to see government services directed towards the truly needy. I’m happy to subsidize public transit in a way that the individuals (namely, lower working class) who need it to get to work can do so. I’m perfectly fine dealing with certain types of road work subsidies (like, when you need a fire truck or ambulance, those need roads to get where you’re at). Give people who make under X amount of money per year a free public transit pass and up to Y amount in municipal transit service credit (lots of munis have an Uber-equivalent rideshare service for off-hours transport)? I’m in. Free public transit at 2AM so people who just dropped a hundred bucks at the bar can dodge a 20-dollar Uber fare? Hard pass.
However, I would never endorse some kind of insurance-subsidization scheme. I own cars and enjoy cars and I understand many working-class people have to pay a big chunk of their budget for their cars (I’ve been there), but insurance – at a hundred bucks a month – just means you should be financing less car.
While I don’t want to pay drunk ppls’ uber bills either, universal access is probably cheaper in the end than all the hassles of making it means-tested.
Here in CA we have universal free school lunch and breakfast. Part of the rationale was it’s actually cheaper this way than if they had to deal with processing applications, hiring ppl to make sure no one is getting a $3 lunch they don’t “deserve” and so on. The downside is plenty of ppl are getting a literal free lunch they could easily pay for. While unfair, that seems less an injustice than making low income families apply every year and potentially stigmatizing their children if the cafeteria is setup so it’s obvious who is “poor” vs who pays.
I think it’s as fair as it is possible to get to offer free school lunch to everyone. There are lots of families that have more money than sense to feed their kids properly, and learning is much more difficult when you’re malnourished. This way, children whose parents have their ego tied up in their provider status don’t have to starve when said parents confuse nonsense with nutrition.
No child should have to go hungry, and they shouldn’t have to wade through adults’ feelings to avoid it. There is no moral risk to universal school lunch, especially when it’s the cheaper option.
All good points. My ONLY quibble is the assumption school lunches are nutritionally balanced.
As a parent it’s also nice for if my kid wants to bring last night’s leftovers or whatever for lunch–I can just decide instead of having to think about whether I’m going to end up wasting money paying for lunches my kid doesn’t use.
But if everyone gets free school lunch, there’s no money outlay to waste or use. They simply take the leftovers or eat what the school offers. No penalties for forgetting or simply being too tired. Nobody has to think about it at all. The kids just get to eat regardless.
Oh there is plenty of waste if everyone gets free school lunches and breakfast. One school I worked at had free breakfast for all students and made it mandatory. I’m not exaggerating when I say 2-5 kids out of 40 even bothered taking the bag and every other breakfast was thrown in the trash. It was a disgusting waste of resources.
It doesn’t have to be that way but some school districts have more money han sense.
I’ve had two glass claims in the past 6 years, one of them the insurance co paid double digits, the other they didn’t pay anything since I needed new glass and it was below my deductible.
When I switched companies for better rates this year (3rd time in six years), progressive penalized me over $100 every six months for the glass claims. The ones that cost double digits.
Auto insurance has become a thinly veiled protection racket.
Same here! MA used to make companies offer free windshield replacements as part of the package. When they rewrote the rules a little while back, they took that out, but I didn’t realize that they counted as claims, and they hadn’t before. I had the glass add on because it was dirt cheap, but then, due to bad luck (f’n scumbag dump trucks and their loaders), I had to replace a windshield every year for 3 consecutive years. When my prior company did the usual “raise rates arbitrarily because you’ve been with them for too long and we think you’re dumb to do so”, I switched to Progressive as they had the lowest online quote, but they told me their records found I had 3 recent claims. The damn windshields were under $300 installed each, so I would have just paid out of pocket it if I had known they’d count against me.
Speaking on behalf of insurance companies (I’m on the dark side). Insurance scams and fraud are absolutely off the charts so, unfortunately the niceties we all use to take for granted are getting pulled back due to POS people being POS.
It’s cutthroat in the industry
Duck tape. Never rule out Duck tape. And drywall screws.
Altima energy rules!
Sheet metal self-tappers for a *professional* look
This also helps highlight why there are a decent number of poorly repaired cars always in the used market with clean carfax reports. If insurance wasn’t involved it’s not on the vin reporting sites. And the quality of repairs made paying out of pocket tends to vary a lot more.
Driving without insurance is also a crime in many places.
Not to sound like I’m from Facebook, but you can’t tell me that a service you are legally required to pay for but are punished for receiving any benefits from is not legalized theft.
You are only *required* to have liability insurance. If you are liable, you are liable, and you would be insanely stupid to not use the coverage you are paying for. And since that insurance is only applicable when YOU fuck up and damage someone else’s stuff, you rightly should be penalized for causing an accident that results in damage to other people’s stuff. And if you don’t like it, nearly every state offers a way to self-insure, often by means of posting a bond with the state. It’s not cheap, but it does take the profit away from the insurance industry if you don’t like paying for their service. Heck, in Florida you don’t even need to post a bond, you just have to file a statement of net worth and some other documentation. Of course, if you cause an accident and get your ass sued off – good luck! Hope your net worth is legit. https://www.flhsmv.gov/insurance/self-insurance/natural-person/
Personally, I have had a few comp and collision claims not involving other cars, and my rates have never been affected. So I don’t worry about it at all.
My BIL was an actuary for awhile and highly recommended dealing with insurance companies as sparingly as possible. He almost always paid out of pocket if something happened to a vehicle in his household, including a $9K bill when my sister bumped into a concrete wall in her Infinity QX80.
Curious, did the study ask if the unreported claims were less than the deductible on the surveyed folks’ policy? I could see that being a reason, done it myself. But that’s likely not the majority of cases from the sound of things.
…if the repair is less than the deductible, what point is there in reporting it?
I had to replace a windshield on a car that was below my deductible by going through insurance I got their price on the windshield saved about $200 over paying for it directly on my own
That makes sense!
i dont live in the US, but does insurance there works differently? reading this article and all these comments makes me think so, that or people really dont know how insurance works
insurance cost in my country is not as high, and individual premiums dont go up for single incidents and policies are not cancelled unilaterally.
granted, claims may be denied, but usually according to policy conditions
full disclosure: i work for an insurance company
In the US just about anything can make your premium go up. Your claim can also be denied for a lot of reasons. Just like everything else in the US the insurer making money seems to be the primary concern.
i see, denials should be tied to policy conditions, but i guess it do is an US thing
insurance making money, well its a business after all, but what seems strange, to me at least, is that premiums are not an income for the insurer, that money should go to the reserves, and some part of that is invested, and some part the returns from that investment can be recognized as an income, almost all of the premium amount is held by the insurer, but its not money they can use… i mean, it obviously generates more money, but not directly as they are required by law (at least in my country) to hold on that money, and at least another similar amount, to face any potential loss due to a claim.
but if it does work differently in the US, then yes, greedy corporates just want the money, what a shame
I think someone on here posted about self bonded insurance which could run like what you described, you add in money every month and it sits in the account.
Yeah, its just about increasing the reserves to they can get more investment income.
Oddly enough, the vast majority of insurance companies are for-profit businesses, not charities. So you are damned right their making money is their primary concern. Same as about everywhere on the planet.
And the average idiot has NO IDEA how any of it works. No it doesn’t work differently than other places. Your claims history goes into the insurance rating that they use to set your rates (each company has a slightly different system, but they are all basically similar). In most cases, you get credit for every year you go without a claim, and of course claims (generally other than not-at-fault comprehensive claims) are of course counted against that rating. And where you live and your driving record factor into that rating as well. It’s not actually all that mysterious how that works.
Insurance actuaries are THE Zen masters of statistical data analysis. They have a very good picture of what your claims history is likely to be based on who you are, where you live, and what you drive. And they charge you accordingly. They are actually VERY good at forecasting the future when it comes to how likely you are to make them money or cost them money.
I have never once heard of an auto insurance claim being denied as long as the insured actually had that type of coverage. You can, of course, get into some pretty good fights as to who was at fault in a particular accident though. If that bothers you, get a dash cam. Of course, that can screw you as easily as help you.
Perhaps many insurance companies need to go back and be run as a mutual insurance model not under a for-profit model. Their declared core reason for existence is to serve customers in the event of losses. Maybe focusing on that and getting back to that is what is required.
If you want to found a mutual insurance company you are certainly able to do that. You only need to raise a few hundred million in capital to get started. Good luck!
There are still a few of them out there, but I don’t see that on average they are really any different (and they tend to cherry-pick who they will cover at all far more than most companies), and most end up getting bought out by for-profit entities eventually anyway.
In the U.S., we get zero visibility whatsoever into why insurance rates are raised. Most companies will raise your rates every year, but the amount varies a lot. Once you’re older than about 25, your rates will only go down when you switch providers, and typically not by much. So any rate increase is effectively forever.
You need an awfully big claim to offset an increase of a few hundred a year for the rest of your life.
where i live rates go up but are usually tied to inflationary rates, like less than 10%. also rates are way lower, comprehensive insurance for my 2023 prius is like the equivalent to 650 dollars a year, including liability, theft, accidental loss and some other quirks
liability only is way cheaper, and its required by law
i guess it does work differently in the US than other countries
No, this is how it works in the US also.
You pay what I pay on my BMWs and Mercedes, and two of them are insured in one of the more expensive states. I would be awfully surprised if rates don’t vary wildly depending on who you are, where you live, and what you drive, same as here. The other countries I am familiar with are the UK and Hungary, it’s WAAAY more expensive in the UK, and far more restrictive as to what you can do with your car than in the US. Hungary is cheaper – but the people are also a lot poorer.
My mother lost a car to a hurricane a few years ago. I handled the claim, along with most of the rest of her finances. The insurer payed out rather more than I thought the car was worth in less than two days. Zero complaints, and her rates did not go up since it was a no-fault comprehensive coverage claim. Her rates are notably higher than mine, but she is elderly and has had two at-fault accidents (thankfully minor parking lot stuff) in the past five years. She pays about $1200/yr for a ’22 KIA Soul – which is actually still on the cheap side for this state.Per Google, the state average is around $3600 for full-coverage (liability, comp and collision). Lots of crazy drivers, lots of uninsured drivers, lots of natural disasters. Also, the “average” Floridian lives in a FAR more urban area than we do, and rates are always much, much higher in cities.
“Lots of crazy drivers, lots of uninsured drivers, lots of natural disasters. Also, the “average” Floridian lives in a FAR more urban area than we do, and rates are always much, much higher in cities.”
As resident of Broward County, I vehemently agree with statement. As rule, I generally do not for any reason take I-95 south of 595. You are truly taking your life in your hands on that stretch of highway.
It’s a wild mix of Cryptkeepers, methheads, rednecks, and crazy Latinos.
None of which have insurance and probably have a suspended license.
Certainly the case for the ones most likely to hit you.
I also forgot – all the entitled trophy wives in mega-dollar SUVs with a phone surgically attached to their ear. Those bitches are a menace!
Insurance rates for me went down most every year until the recent inflationary times. Now they have remained mostly the same (I count that as a win), albeit I raised my deductibles (and also my liability limits), since I can afford to easily. Rates are going up for everyone because the cost of EVERYTHING is going up, from fixing cars to fixing people. Especially the cost of fixing people – or have you not been paying attention the past decade or so? There was a time when a minor fender-bender was a $100 fender, some paint and labor, and a $10 headlight. Today it’s a $2000 headlight, $1000 in sensors, a $1000 fender, and $2000 in paint and labor, now that it all has to be environmentally friendly in a special gazillion dollar paint booth. And God help you if you injure someone and even so much as send them to the ER for a checkup, never mind surgery or a hospital stay. A simple broken leg can be $50K+. And if you are at-fault, you are not getting those sweet negotiated hospital rates that the health insurers get – you are paying full retail.
It takes very, very little to have a claim that would utterly bankrupt you without insurance. Been to the hospital lately? If you cause a crash and injure someone, those medical bills are on YOU.
I would argue that insurance coverage in the US is NOT expensive as a general rule, considering in this country if you injure someone with your car and are at fault, you are potentially on the hook for *hundreds of thousands of dollars* in medical bills. Auto insurance is PRIMARY for covering accident related injury costs, even if the injured has medical insurance of their own.
As an advancing middle-aged dude living in homes I own in quiet boring suburbia with a bunch of relatively expensive daily drivers and a SQUEAKY clean driving and credit record, and no at-fault accidents in a couple decades, I pay about $600/car/year averaged out for full coverage with high limits and moderate deductibles (two daily drivers, three cars on limited use policies). One of my homes where two cars are insured is in a state that is actually very expensive relatively speaking for insurance. The other is in a much cheaper state. If you are a dumbass kid with a hot Mustang, living downtown with terrible credit and with a slew of tickets and a totaled car in your past, well, you are going to pay for that for a good while.
I have actually never heard of an insurance claim being denied here in the US, unless you don’t have the type of coverage that the claim would require. For example, you have an at-fault accident but don’t have collision coverage on the car. I’m sure it DOES happen, it’s a big country with a massive number of insurance companies – but it would be pretty unusual, and auto insurance IS a highly regulated industry (though of course, that varies by state).
The average idiot in the US has no idea how much of anything really works.
It also pays to shop. Some carriers actually penalize loyalty. I had my vehicle coverage with a large carrier that was once known for great service, I haven’t had a claim of any sort for decades, have excellent credit, bundled my house, and drive all the cars collectively less than 10K miles a year. Still, it kept going up, and up, and up. I finally opened my eyes, shopped around, and am now with a highly rated carrier, paying 1/3 as much for the same or better coverage.
Still… my day job has a lot of overlap with risk management. Some of the utterly petty crap that insurers pull is insane, occasionally to the point of spending dollars to save nickles and dimes.
Oh yes, I do my due diligence on the daily drivers every year. I have no particular loyalty to any insurance company, though for the past few years GIECO has been close enough to cheapest for the coverage I carry that I can’t be bothered to switch. And I WAS extremely impressed with how they handled the total loss of my Mother’s car in a hurricane. But if they jacked my rates I would be gone in a second if another company was notably cheaper. But I have pretty much rock-bottom insurance rates to start with, so there’s just not really much room for cheaper.
Annoyingly, bundling different lines of insurance in Florida is nearly impossible. There basically are no insurers who sell both homeowner’s and auto insurance, and the couple left that do are so wildly expensive that you won’t save anything anyway. I have a good enough deal on my place in Maine and cars in Maine that I wouldn’t save anything bundling up there anyway. But I am firmly in the area of “boutique” insurance due to the sorts of cars I own, and it being a rental property.
Sometimes it’s just not worth the hassle dealing with insurance and body shops for minor damage.
Best bet figure out the most you are willing to pay out of pocket and buy insurance with that as the deductible. That way the premium is a lot less but you are still covered.
Exactly. In well-funded middle age where dropping a couple grand is not an emergency in any way, I don’t need that $200 deductible anymore. I see both car and homeowner’s insurance as things for catastrophic events, not minor inconveniences.
But also as someone who is lucky enough to have a very decent net worth, I carry *massively* larger liability limits (plus an umbrella personal liability policy) than I did when I didn’t have two nickels to rub together and was effectively judgement-proof. But higher limits cost less than you save with higher deductibles. There is a cost to a claim that the insurance company has to account for, and higher deductibles save them dealing with those piddly claims.
Understandable. Insurance companies aren’t run like they were intended, and used to be. A claim, any claim, is an invitation to cancellation. Hell, try making a claim with home insurance, see what happens.
I once had a fire claim on a home. When I went to rent the place out a couple years later the insurance company dropped me because the policy change allowed them to. The agent couldn’t find me coverage, then had the gall to warn me that the coverage I actually could get wasn’t good.
It’s highly unlikely your claim had anything to do with it. That company simply didn’t want to be in the business of covering non-owner-occupied rental properties. That is a much riskier business to be in. If few companies in your area are interested in that market, that says something about what the claims experience for rental properties is in that area. I have had no problems insuring my rental properties, in Maine or in Florida – it just costs quite a bit more than my personal residence. Which gets passed along to my tenants.
They specifically said it was due to the claim. Years later I’ve had no issue securing insurance for rental properties in the same market.
They may have said that, but it’s unlikely to be the real reason. The way to get the money back is to keep charging premiums. Unless the fire resulted in much higher risks going forward.
So if you aren’t having trouble now – why did you have trouble then? That tells me it was really that you wanted to rent it. What has changed?
Ultimately, people take business decisions far too personally.
I had trouble then because I just had a huge claim. I have had no claims since.
Every response you’ve given on this thread appears to be pro insurance industry. Why don’t you come clean?
Nothing to come clean about. I got my professional start working for a non-profit health insurance company 30-odd years ago. So I have a decent understanding of how insurance works at a very fundamental level, and insurance is insurance is insurance. At the end of the day, the goal is to maximize revenue, and you do that by minimizing payouts on claims. It sucks, but it’s a necessary evil in modern society if you don’t have the net worth to self-insure – and unless you are a tens of millionaire, you don’t. So you play the game the best you can, and to the extent you can minimize the need to file claims. Not driving like an asshole and paying attention to what you are doing behind the wheel goes a long way towards minimizing car insurance costs. So does choice of where to live. Because as I said in another post, the absolute masters of statistical analysis are insurance actuaries. They can paint a very accurate statistical picture of what your likely cost in claims is, and charge you accordingly. Or recommend that they not insure you at all because they CAN’T charge enough for you to be worth their while due to regulations.
And I can assure you that “non-profit” is largely meaningless in terms of insurance. It’s mostly a scam. I used to refer to the company I worked for as “anti-profit” – but certainly not when it came to paying claims! That was in the bad old-days before the ACA curb-stomped some of the worst practices of the health insurance industry. Which actually made the financial situation for insurance companies much worse, of course – today they HAVE to cover much, much sicker people than they did back then. Which means everybody pays more. Rightfully so, IMHO, but that is the reality.
The lowest cost option is publicly provided insurance where the “risk pool” is the entire population and it is run as “non-profit” as possible. But while that is great for health insurance (particularly as it provides huge leverage in controlling costs), it’s not really great for car insurance. You have FAR more personal control over your car insurance costs than you do your health. In most places that do that, some Canadian provinces do for basic liability, what actually happens is people who would otherwise have the cheapest rates end up paying more, even though the worst drivers might pay less. But the real benefit is ensuring that nearly EVERYONE is ensured.
Home insurance is insane. At my first house I had a tree branch fall through the garage in a storm. I started into the claims process and then decided not to file as I could fix it outright for roughly the cost of the deductible.
Over ten years and two different insurance companies later, I had significant damage from another large tree falling on the house itself during a derecho. By this time I was renting it out and had structural insurance only. When the adjuster showed up he still grilled me about that branch through the garage.
I’m certainly hesitant because insurance companies seem to be looking for any excuse to raise rates.
Last year I hit a coyote with my Mazda 3 and obliterated the front bumper. I basically had no choice but to make a claim and figured I’d somehow get screwed, but was pleasantly surprised when insurance told me straight up this won’t affect my rates.
Forget rate increases. Cancellation has the higher probability.
Yeah, and then the next company charges you the higher premium because now you have a claim history.
I was just speaking with my co-worker this morning about this very thing. He’s been with the same insurance company for over a decade. His daughter borrowed his car and got into an accident recently – the only hit on his policy in that time frame. Regardless of all the premiums he has paid to that company over the last ten or so years (the amount he paid in is much higher than the cost of repairs), they still dropped him.
And people wonder why I hate insurance companies.
Is it the same shit in other parts of the world?
No. Other parts of the world, other first world economies, haven’t been bowled over yet by American business school MBA thought. Whether they’ll achieve the same ‘race to the bottom’, scorched earth policies as American corporations is yet to be seen.
In many other parts of the world, he would have had the claim denied because he lent the car to someone else, and then they would have dropped him. She should have claimed it on her OWN policy. If she didn’t have her own insurance, was she a named driver on his? I have to specifically exclude my mother on my policy, but she is covered for my cars on her own policy, and vice-versa.
Looks like insurance companies have won. They’re officially mobsters. Pay protection. Scared to use it.
If the mob existed, which it doesnt, they would be perfectly fine with you calling in their protection
It’s still scary to call the person who threatens your life and livelihood unless you pay money, I would imagine.
And that’s exactly how the insurance industry likes it
Of course, body shops are increasingly coming under the control of big, national chains or car dealer groups, which often don’t want to take on any work that ISN’T insurance covered, so, if you do want to pay cash, you have to find one of the dwindling number of independent shops that’s also reputable
This is part of the reason I put a deposit down on the Slate Truck. User replaceable, unpainted, plastic panels? Hell yeah.
Well, that, and it was a whopping $50…
Doesn’t help everyone else. Anyone try and get a quote on a complete respray lately? Most (all) shops will refuse to do such work now. They’d rather do insurance work. The couple of body shops that said yes, quoted me $12K for a complete respray, in and out.
I find steel and paint as the solution to constructing cars to be exhausting, for the very reason you described and the fact when steel is exposed to water it turns to dust and paint can be scratched by a baby’s toy. Sure, It’s fairly durable, if done right, and when it is durable, shit still happens, it’s never the same, and it’s a pain in the ass to get fixed. My Ford had already started bubbling rust on the wheel wells at a whopping 4 years old. Thus, I will try and put my money where my mouth is and support ventures that think outside the box a little.
Yep. Aluminum or plastic body panels.
For a while I said that among the things that the Cybertruck should have had one of them was an aluminum body, hell you could anodize the body panels instead of painting them, and they can even keep their stupid bulletproof claims as there have been many an APC made of aluminum.
Stainless was certainly a choice. I love cars, but at the end of the day they are tools. Tools to get to work. Tools to have fun. I want them to be durable not fragile. Cars are fragile in a world of shit happens.
Stainless body panels with a stainless chassis would make some sense, however they’re stainless panels on an aluminum chassis, which is arguably the worst combination possible.
Just had an experience with a shop that only takes insurance. They wanted $4,500 to fix a single dent and another $4,500 to fix a peeling paint issue on a couple spots. They literally said, “the hourly rate is lower if you use insurance”
So, you want $9k to fix a single body panel on a fucking Ford Fiesta. L O L. Local independent shop quoted $2,600 to fix every little minor thing wrong on the entire car.
Who knew having to deal with insurance companies for payment was so much easier than cash.
That’s because the insurance companies are required to repair it to new quality.
I ran into this with some rust I wanted fixed. Most of the body shops said they’d need to install a whole new 2013 Malibu side panel to fix the rocker panel rust. Being certified to do those repairs means body shops must do all repairs the same.
I’m not living in the US, but my insurance refused to propose more than liability only.
The reason is that the car is 33 years old and they can’t even source a new windshield if needed…
That was also probably the ‘we don’t want to mess your job’ pricing.
Yep. It’s one of the reasons I think Aluminum Body cars and Aluminum Unibody cars are the way to go. Body shops don’t want to pull dents, they’re there to just replace shit, and if you’re just gonna replace stuff aluminum is the way to go body panel wise.
Either that or plastic body panels, but microplastics are bad mkay.
Basically, they’ve gone to what mechanics shops have been for years – unbolt and replace what the computer tells you to, no repairs, no rebuilds, no diagnostics beyond the scan tool
Yup!