Insurance - Be careful - A claim is a claim - nothing is free

[djw2112]

Hi, i just got off the phone with progressive. I was going to change my auto policy from geico to progressive because it would save me $60 per month when i did the online quote. I wanted it to start in january so i had to select the option for a callback so i could talk to a rep.

When we went to finalize the deal she gave me a total of $750 for 6 months, this was up from $450 when i got the quote and so i ask her why. She told me that i would have seen that new amount before i finished online because the driver report is not done until after you proceed to finalize policy and they are aware of it being in wrong order. Then i told her that the drivers record had nothing on it so why did it jump, here is where it gets scary folks...

She told me that i had several claims, one this year and one from 2019. I told her the 2019 was for a star in my windshield and geico did it for free. And the one from this year was for an awning for my RV from foremost. She said it makes no difference, when insurance companies look up records, every claim regardless of type, when, what company comes up on their computer, and any claims you have you pay more.

So this means folks that windshield repair is not free, if you replace your awning on an RV policy youll pay more if you renew your auto policy, any and all claims you have regardless and you will pay more. So they will get their money any way you slice it.

I think this is just nuts, i told her to forget it ill stay with geico. This is one reason i believe that somewhere up the company chain of all insurance companies that one person owns them all because they are making money from other companies claims.

Dont you all agree this is just total nuts that they do this?

 

[Utclmjmpr]

Where do you think all the money comes from to pay claims,, the company just uses your money for that..>>>Dan

 

[djw2112]

Where do you think all the money comes from to pay claims,, the company just uses your money for that..>>>Dan

Hi, yes i understand that if i have a claim from for xyz insurance company that xyz insurance is going to charge me more on my policy to pay for it. But this is xyz insurance company charging me more for a claim on abc insurance company. That is just nuts.

This is like paying more for a dodge because you also own a chevy.

 

[Compassrose]

Insurance is like casinos. The "house" always wins.

 

[DonTom]

So this means folks that windshield repair is not free,

It's often best to NOT file a claim for small stuff.

One way to make sure you don't, is to have very high deductibles, like I have.

-Don- Auburn, CA

 

[PJ Stough]

Nationwide is on your side. Have had them for over 20 years. Still happy with them. That is even after a claim for a new windshield on the motorhome, new roof on the house(hail), one claim for hail damage on a car, at least three claims for damage to cars, and we have never seen a drastic raise in rates.

 

[NY_Dutch]

I have approval from Progressive to replace both halves of our two piece windshield at a cost of $7600. I wonder what that will do to my premium when it renews next June...

 

[djw2112]

It's often best to NOT file a claim for small stuff.

-Don- Auburn, CA

I see that now. I just never knew that if i had a claim with geico years back that it would make any new auto policy with another company more expensive. And paying more for a new auto policy for some RV claim from a different company really blows my mind, they should have nothing to do with each other.

 

[8Muddypaws]

Having worked in the insurance industry for a while I can tell you that one company does not own them all. But through a practice known as reinsurance they do indeed share risks, expenses and data across many companies. This protects consumers as well as the overall insurance industry by spreading claims from natural disasters and such over many companies. The company I worked for specialized in workers comp.

You might be able to find a company that your current carrier doesn't share claims with. Accidents are another matter.

The insurance business made manufacturing and finance look like tinker toys by relative complexity.

They spent a small fortune training me. And then I left. Mostly because of my immediate boss.

 

[Old_Crow]

I need a new windshield on the Jeep. I have the lowest deductibles that they would let me have on an '03, plus no deductible on the glass, but I'll still pay cash for said windshield. it's less than $200 installed.

 

[Boat Bum]

It's no different than lending institutes, they're not just going to look at your last loan, they will deep dive.

 

[Tom]

... I'll still pay cash for said windshield. it's less than $200 installed.

Just had the windshield on our Explorer replaced (yesterday) - $1,200 billed to insurance, $100 to me, which insurance will refund. Last time I had a windshield claim on insurance (different company) was on a motorhome in the early 90's. When we needed a new windshield on our current motorhome earlier this year, I discovered that the insurance company didn't provide glass coverage, so I paid almost $3,000 out of pocket.

 

[Mark_K5LXP]

Insurance carries an overhead that some vendors will discount if you pay cash. For medical this is "self pay", for most anything else it's the cash price. I always ask what the cash price is and it's usually less, enough less that it gives me pause to compare to an insurance premium hike or delay of a rate discount. I usually omit glass coverage as I've had windshields put in cash price that were literally half of the insurance bill. Yep, it's "out of pocket" but pay me now or pay me later, after a few decades of playing the insurance game I like to think I've minimized their profit some small amount.

Mark B.
Albuquerque, NM

 

[Kodiak34SS]

The OP would do good to shop around. Insurance companies don't all calculate ratings the same way and you may have landed in a rate class that is unfavorable for whatever reason. When I've shopped our policy, not two insurers quote the same price for the exact same coverages on the same vehicles and drivers.

Recently I did get a ticket for 5mph over the speed limit. Will be interesting to see if that changes my rates.

 

[Gary RV_Wizard]

It should not be a surprise that insurers look at your history for any and all factors they think might impact your policy with them. Your driving record, financial responsibility (like missed payments for anything), credit report, employment history, and yes, your experience with other insurers. And each insurer determines the factors they use and how they weigh them in setting their rates, so you shouldn't assume that every insurer uses the same yardstick. Nor that your current insurer will automatically raise rates if you make a claim. Their rating algorithms may or may not do that, and the algorithm may differ for a new applicant vs a current policy-holder.

Insurance underwriting is a combination of data-gathering, statistical analysis and witchcraft. They try to forecast both your likelihood of making claims and your reliability as a paying customer (late or missed premium payments is a big expense for insurers).

Most people misunderstand the insurance business. It's not about collecting more in premiums than they pay out. It's a banking business, where they use your premium money to invest in high-return loans or developments. They know they are going to pay your premiums back someday in claims, but meanwhile they have the "float" to use to make money through investment. Basically they figure out how long they will have the use of your premium dollars until they have to use it to pay a claim.

 

[Kodiak34SS]

Yes. Most insurers actually pay out more than they take in insurance premiums. Each insurer has a "loss ratio" and some are better than others. Claims is a gamble of a business but it's a way to get cash to invest at low cost. The financial and banking arms of insurance companies use that to make profit from investments.

Keeping enough cash around to pay claims is called "reserve". When I worked in insurance, the application would automatically calculate the estimated reserve for each claim, and the finance arm uses that data to calculate the cash to keep on hand to pay for losses.

 

[Phil-T]

It is definitely a "rackett". My son leads a small group that sells small business liability in MA. Mandated by the sate. What deal - selling a product that folks have to buy.

 

[Kodiak34SS]

Purchasing insurance is typically more cost effective than posting a bond with your own money. State laws mandate that you have a form of insurance, but not that you have to necessarily buy it. Many companies are self-insured.

 

[DonTom]

Recently I did get a ticket for 5mph over the speed limit. Will be interesting to see if that changes my rates.

Different places handle such differently. In NV, less than 10 MPH over the limit on freeways doesn't get reported to insurance companies.

In San Francisco, a ticket for 5 MPH or less over the speed anywhere is automatically thrown out if taken to city hall to contest.

My info. is a bit old, so I cannot be 100% sure either is still true, but I assume so.

But perhaps there is something you can do there too, if necessary for such a mickey-mouse ticket.

-Don- Auburn, CA

 

[DonTom]

What deal - selling a product that folks have to buy.

Not really. Such things are considered agreements. IOW, if you do not want to buy car insurance, do not drive, etc.

-Don- Auburn, CA