Give Local Insurance Agents A Shot

My wife wrote an article last week about how you can save money going local for balloons and flowers, but here’s another reason you might want to go local – superior service.

In working for my how to buy term life insurance post yesterday, I emailed my insurance agent, Deborah from State Farm, to get some updated quotes on term life insurance. I’ve had the need to email her on several occasions and each time her responses were usually back in minutes. She knew me as Jim Wang, a recent new customer, and not as customer #XXXXXXX in a database somewhere.

It really underscored one thing I had missed when I was with Geico and Traveler’s, personalized service with a real person.

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Testing the Top Five Car Insurance Myths

Geico Wall at Nationals BallparkWhen I first started driving, I was amazed at how much car insurance cost. I, like many other newly-minted drivers clutching our licenses, was put on my parents’ car insurance policy, which I’m sure made my parents nervous, and didn’t really feel the full brunt of new-driver-car-insurance-rates. However, when I finally left the nest and had to insure myself, I finally started hoping that 25 would come sooner because everyone says that car insurance rates drop significantly after you turn 25. (I spent all my <21 years waiting to be 21, then my <25 years waiting to be 25… now I’m waiting for retirement… the waiting never ends!)

A few years ago, when I turned twenty-five, I had a great opportunity to test a few car insurance myths empirically and I’m happy to report the 25 year old rate drop myth is in fact very true.

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GEICO Paid Out A Fraudulent Claim

I had written a post in which I talked about some companies I love and one of them was GEICO, mostly because they were cheap, and bostonmichelle left the following comment:

You like Geico only because you’ve never had a claim or any other problem. Someone put in a fraudulent claim against me, and [Geico] just went ahead [and] paid them even after:

  1. I submitted professional photos (at a claim shop) documenting the total lack of damage to my car.
  2. I submitted my own photos of my car backed up against a truck of the exact same model of the claimant’s to show there was no way my little car could have damaged his huge truck’s back bumper, and
  3. I spent 2 hours on the phone with various people there begging them to look at the photos and tell me how I possibly could have caused that damage.

So, they pay anyway, and my insurance record gets dinged cuz they did so. I had to pursue this case because there was NO WAY I was going to pay higher insurance because they are so stupid. After spending many hours talking with MANY stupid, lazy people at Geico, I finally get a guy whose wife had a fraudulent claim against her. HE got it and fixed my insurance record. It still showed they paid out, but I was now shown as “not at fault.”

Idiots. I’ve gotten the best deal and the best service of my life going through Costco (one of your other favorites). They use Ameriprise, which has been wonderful so far. Plus, you can pay your premiums with a credit card. I bet you could save even more money with them – plus you won’t risk your sanity, insurance record, or finances should you actually need to use your insurance.

I was pretty surprised to hear this mostly because insurance companies aren’t in the business of paying out a lot of money needlessly, they’re usually on the other extreme, looking for ways to get out of paying for something. So I asked for more details and bostonmichelle provided:

The claim they paid was about $450. It sure would have been cheaper to listen to their customer and not the claimant (they lost me as a client immediately, and I’ve been telling my story ever since), but I’m sure they had their reasons.

There was no police report since we both agreed at the time that there was no damage. I hit the guy while I was rolling from a standing stop – about 1 or 2 miles per hour. He had a dented bumper on his tall SUV, but my bumper (on my short little Sentra) was far too low to do that damage. I had hit his tow package hanging down below his bumper. We both agreed there was no damage. Neither of us had a camera in our cars.

He later sent me a quote for $700 or so from a repair shop. It listed his make & model, so I went to a dealer who let me park up right next to the back of the same model and take photos. I had clearly hit the tow package. If he had no tow package, the front of my car would have gone clear under his truck, which certainly might have damaged MY car -but not his.

I sent those pics in AND I went to Geico’s claim shop which put a measuring tape on the front of my car and took their own pics. There was absolutely no damage to my car at all. They sent those pics in. When I talked with the various Geico people, most didn’t have access to the pics. And, no one WITH access ever called me back.

The one guy who helped me knew what it was like to have a fraudulent claim. He didn’t see the photos either. He just had been through it himself and was sympathetic. I don’t know the insurance business, so I can’t answer your questions any more than that. You can post this email if you like. Anyone who wants to help share the pain of dealing with Geico on a claim is doing a good deed, that’s for sure.

By the way, I have NEVER had an accident – one that was my fault or someone else’s. And, I’m 36 and have my license for 20 years.

Again, I would get the hell out of there, if I were you. At least look into Costco’s service. I think you’ll be pleasantly surprised.

Basically it sounds like the person she hit pulled a fast one on Geico and they fell for it, leaving bostonmichelle holding the bag. While you can’t do anything after the fact, this is why it’s crucial to keep a camera nearby (nice if you have a cell phone camera) to take pictures at the scene of the accident in order to have some sort of proof. Your word is nice but evidence is nicer.

 Personal Finance 

Four Companies I’d Promote for Free

FMF shared his list of companies he promotes for free and asked for everyone to share their list so here’s mine:

  • Vanguard – Not surprising, I’m a big proponent of Vanguard as well. They currently have my SEP-IRA, Rollover IRA, and my fiancee’s regular brokerage account; every single time I’ve talked to someone there, they’ve been courteous and able to help me within minutes. I had a couple tricky situations too but they were able to easily tell me how to fix it and I was on my way. Plus, their funds are ridiculously cheap…
  • Costco – Again, another one off FMF’s list, I heart Costco because of their low prices and their money back guarantee (I’m fine with them not taking back electronics after six months, screw the people trying to game the system) though sometimes the long lines can be a little frustrating if you want to walk out with only a couple things. I like how they’ve expanded their line of products to include more seasonal items. I love their ribeye steaks, great prices and pretty good cuts, and their tire center.
  • GEICO – For my demographic, I pay pennies for auto insurance and Geico is part of the reason why. I’ve been with them for as many years as I’ve been driving and every bill the amount they charge gets lower and lower. Just this past month I renewed my policy and the price had fallen $25 to $301.00, you can’t really beat that! (I don’t carry comprehensive or collision insurance, though if I added those with $1k deductibles the total would only be $607.00 — hmmm maybe I will get it.) Plus they have the Caveman and Gecko commercials.
  • Kingston – These guys make RAM and are currently owned by Micron but they have a lifetime warranty on their products that I’ve used twice without any complications whatsoever. In each case I just read them some numbers off the chip, they asked for my address and bam… next memory in a couple days.


Major Insurers Offer 5 Year Accident Forgiveness Policy

All-State has been touting their accident forgiveness policy, going so far as to use President David Palmer as their spokesperson (24 rules!), but did you know a lot of companies offer this benefit? In fact, All-State’s accident forgiveness plan is only better than the competition if you have their more expensive levels of insurance (7-15% more expensive). With their standard policy, you get the same level of forgiveness as most other insurers – one forgiveness in the last five years.

Who else offers one free accident every five years? Basically every one else.

Here’s GEICO’s accident forgiveness policy:

Accident forgiveness eligibility — In most states, many customers who haven’t had an at-fault accident in the previous five years of being insured with GEICO may qualify for accident forgiveness. GEICO will not increase your premium as the result of your first at-fault accident after qualifying for this benefit. (source)

You’ll notice the “most states” part (which will appear in every insurer’s mention of accident forgiveness), that’s actually not a restriction made by Geico but one made by the state regulators themselves. Some states have regulations that change the rules regarding accident forgiveness but a lot of other insurers offer accident forgiveness for five years of insurance.

That’s one more reason, outside of potential loyalty discounts, why you might want to stick with one insurer instead of going with the cheapest option every few years.

Does anyone know if accident forgiveness is required by some state laws? I see mention of how the rules for accident forgiveness depend on state law but I couldn’t seem to find anything for Maryland when I searched.


GEICO Good Student Discount

My girlfriend gave me a great idea the other day about how I should see if I still qualify for the Good Student Discount from Geico now that I’m back part-time at Johns Hopkins. Unfortunately, I’m not. These are the rules for the Geico Good Student Discount (from the Geico Rate Class Explanation sheet):

GOOD STUDENT DISCOUNT: Owners or operators who are age 16-24 and full-time students (including those in an academic home study program) may be eligible for this discount. The individual must be classified as a single or married male or a single female operator. Scholastic records for the immediately preceding school semester or quarter (or comparable segment) must show that each such operator was a full-time student and:

  1. ranked scholastically among the upper 20% of the class, or
  2. had a grade average of B or its equivalent, or
  3. had an average of at least three points for all subjects combined, or its equivalent, or
  4. was included in the “Dean’s List,” “Honor Roll,” or comparable listing for scholastic achievement, or
  5. ranked in the upper 20% of one of the following national standardized tests administered within the past 12 months: PSAT, PACT, SAT-I, ACT, Iowa Test of Basic skills, California Achievement test, or TAP.

I don’t fit in the 16-24 age group so I’m disqualified on that account plus I’m not full-time, I’m only part time. Oh well, it was worth shot!

 The Home 

Information Needed for a Homeowner’s Insurance Quote

I called up Geico, with whom I have an automobile insurance policy, to see about getting homeowner’s insurance because I’ll need a policy in place before we close on Friday. I was basically completely unprepared for the battery of questions the CSR asked me but we struggled through it and came up with a quote on a $295,000 policy with a $500 deductible of $843/year. I’ll be sure to compare that rate with other insurers but $70/month seemed reasonable to me at first glance but I have no experience with homeowner’s insurance. However, I probably answered some of the questions inaccurately so if you’re going to get a quote, here are the questions you should have answers to:

These were sent to me in an email by the CSR, who worked for Travelers (underwrites policies for Geico):
Here is a list of questions of good to know information because they will probably ask this of you.

  • Address of home
  • County
  • Year of construction
  • Type of construction
  • Square footage of home
  • Type of roof material
  • Condition of roof (Excellent, Good, Fair)
  • Type of heat (Oil, gas, electric, other)
  • Any form of alternate heat (woodstove, kerosene heater, or electric space heater)
  • Distance to fire hydrant (in feet)
  • Distance to fire department (in miles)
  • Is there a garage?
  • Is there a porch, deck, breezeway attached? What dimensions?
  • Security/protective devices:
  • Deadbolt locks?
  • Are there smoke detectors?
  • Do you own a fire extinguisher?
  • If home is older than 1990
    • Year roof was replaced or original
    • Year heating was updated or original
  • Electrical service- circuit breaker or fuse box?
  • Purchase price/Current coverage amount
  • If purchase price- contact person for lender, phone # and if possible, fax #

I hope that comprehensive list is helpful for someone so you don’t sound like a dope when you call in. 🙂

One company I’ve been told we should check out is Liberty Mutual because they give discounts to my alma mater. I’ll probably give them and perhaps one other company a call just to get an idea of the quality of the $843 quote.

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