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The best thing you can do is shop for auto insurance every year or two. The longer you stay with a particular company the more likely they are to very slowly a

The best thing you can do is shop for auto insurance every year or two. The longer you stay with a particular company the more likely they are to very slowly and carefully hit you with small rate increases until you're paying far more than their competitors will charge you. Insurance companies understand and exploit consumer behavior better than even the best marketers.

toomuchtodo 7y ago
I want a product like policygenius.com, but instead of life insurance they have my entire insurance portfolio (auto, home, renters, umbrella, personal property) and constantly price shop for me automatically as a broker between me and every major insurer. I would also like such a product to be structured so that they can never be bought by Intuit or another incumbent, preferably in some sort of employee owned coop mutual company model (if Vanguard and USAA had an insurance broker child with a tech first demeanor). Sidenote: I’ve been with State Farm for over 20 years, and my rates have only gone down.
- fignews 7y ago
  A few months ago I switched insurance. I did some shopping with getjerry.com was very slick, didn’t end up going through them though because of large savings when going directly through the insurance company. Will try them again one year in the future. Saved $1.5K/yr
- chrisplotz 7y ago
  I have a lot of sympathy for this feeling - I am a USAA member, but through family, nothing I did. I feel fortunate that I qualify. My cofounder and I are trying to build a company a lot like you describe to bring "USAA style" to more people. We just did our launch HN last week (Goodcover). It's renters only right now so won't do exactly what you describe, but just wanted to say I totally get where you're coming from.
  - deleted 7y ago
    [deleted]
unlinked_dll 7y ago
State Farm has only ever reduced my rate. They do it about once a year. I have shopped around and changing policies would cost be upwards of $50/month more than I currently pay. Granted the best thing you can do for low auto insurance rates is to barely drive. Personally I drive less than 5k miles a year, and my rate reflects that.
- bradfa 7y ago
  Similarly, I've been with GEICO for over a decade now for my car and homeowner's insurance. GEICO is just a homeowner's broker in New York, Liberty Mutual actually insures my house. I shop every year or two and I've never been able to find a better deal than I already have for comparable coverage, even directly quoting through Liberty Mutual. Regardless, my GIECO rates have been consistently going up these past few years, but it seems every other insurer is also raising rates for people like me (location, history, etc) every time I check. I've never had to file a claim for my homeowner's insurance and I've never been at fault in a car crash, but I've heard some not so great stories about GEICO so hopefully I'll never have to find out.
  - astura 7y ago
    I have to say, I was impressed with my GEICO claims experience. A GEICO customer hit my car, entirely her fault, so I just went through her insurance, didn't even notify mine. GEICO was extremely helpful, polite, and prompt and I wasn't even their customer. I opted to use their "full service claims center" which was located at [local reputable body shop/dealership]. I showed up with my car, they had a loaner ready for me up front ready to go with the keys in the ignition and the loaner car was very nice (just a family sedan but a nicer one). The whole process was just very straightforward and easy. Several years later my car was hit by a State Farm customer, entirely their fault, I went through their insurance again. That whole experience was just shit. First they were disorganized and unhelpful. I decided to use their "full service claim center" since my GEICO experience was so good. The place they sent me to was out of the way and somewhere I wasn't familiar with. When I arrived it was some shady looking dumpy body shop. [I almost walked away then, wish I did]. Clerk didn't seem to be expecting me and wasn't prepared, even though I had an appointment to drop off the car and nobody else was there, so I had to fill out paperwork because State Farm didn't send over my information, I guess. After that I had to wait forever for Enterprise to pick me up (so "full service" means that the clerk will make a phone call). Then at Enterprise I had to stand in line and fill out more paperwork. They gave me a Fiat 500, which doesn't have a full back seat and at some point I had two passengers who couldn't fit into the back seat. After they finished the body work they literally didn't put the wheel back on right and it was a couple inches from falling off my car while I was driving. My usual mechanic was shocked.
inetknght 7y ago
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.
- astura 7y ago
  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.
  - perl4ever 7y ago
    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.
- reaperducer 7y ago
  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.
- unexpected 7y ago
  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".
RHSeeger 7y ago
I have USAA and can't say enough good things about them. Whenever I call them, they're there to walk through whatever I need with me. The first thing they ask is if everyone is ok; it's trivial, but means something. In general, their rates are really good; it used to be that, when other companies called, you could tell them you have USAA and they're acknowledge they can't match the rates and hang up. Admittedly, not everyone has access to USAA but, if you do, I highly recommend them. Noting this because I've been using them for insurance for decades with no intention of switching.
- frayesto 7y ago
  Another USAA member here. I haven't had to do an auto claim yet, besides simple windshields, but have had several property claims. They have been great. In fact, right now USAA is in the subrogation process against the offending party for a claim on a bicycle. I've been happy with their insurance products, their even better customer service, and have no plans of changing.
  - rmcpherson 7y ago
    When I had a bicycle accident, they fully covered my new bike and related damaged equipment under my renters insurance policy. Service has been uniformly excellent for car claims as well.
  - hnburnsy 7y ago
    Counterpoint, had USAA auto for 20+ years, added 2 young drivers and premiums went up 4200 per year. Switched to Geico and recouped 2700 of that. Always shop around.
    - prostheticvamp 7y ago
      Geico is so huge I expected their customer service to be an absolute shitshow. Then I totaled my car, and they were actually helpful and easy to work with. I remain shocked to this day, and I’m still 90% convinced it was a fluke.
JKCalhoun 7y ago
They call it the "loyalty tax". Sad world we live in, right?
- JMTQp8lwXL 7y ago
  I'd imagine each of these companies has a bean counter for growing their subscriber base. When all insurers raise their prices a little on every policy renewal, people will rotate insurers and who's ever in charge of growth looks good due to new sign-ups, it justifies marketing spend, etc.
- dawnerd 7y ago
  Probably why AAA likes to make a point of how long you've been a member. People don't want to lose that 'status'
_bxg1 7y ago
Sounds like a classic case of frog-boiling.
noisem4ker 7y ago
In Italy, auto insurance contracts are limited by law to one year in length, so that people are encouraged to re-evaluate their position and get new quotes more often, promoting competition.
- lotsofpulp 7y ago
  I've never seen one longer than 6 months in the US. And I don't even think it's a contract for 6 months, you can cancel anytime and get a refund for the months you don't have it.
  - lostapathy 7y ago
    One year auto insurance in the US is actually super common. I never had it offerered/suggested to me until I became a homeowner - at which point my broker got me a small discount for doing a full year policy for both home and auto.
rexf 7y ago
Shopping for auto insurance has been completely useless for me. When I compared across multiple insurance companies, I was able to pick the "lowest cost" provider. However, when I went to sign up, the price offered was completely different from what I saw shopping on their website. Also, I recently tried to compare my current auto policy with a different insurance provider. The new insurance agent told me my rates would go up with them, so I obviously declined to change my auto insurance. I understand that periodically shopping for better rates is the logical thing to do, but in my auto insurance shopping experience, the numbers all seem arbitrary so shopping is not useful.
- Marsymars 7y ago
  > However, when I went to sign up, the price offered was completely different from what I saw shopping on their website. In my experience, the websites use an entirely different algorithm than whatever phone agents have access to. I don't bother going through insurance websites' lead generation workflows, I just call a handful and get quotes on the phone from them.
njx 7y ago
This and also do not signup for e-delivery of new policies. I had this on with farmers for home insurance and never realized they had increased the premiums every year. It was my problem that I did not bother to login and check for the documentation section and then open the docs to see the price changes.
jedberg 7y ago
Or build a personal relationship with your agent. I occasionally check my rates with competitors, and they can never beat my existing rate. My agent will call us any time there is a new program or discount that might save us money. My agent understands the value of a long term customer who brings in other long term customers. When we started with him it was because my mother in law was already a customer. We just had car insurance at the time. But as we moved on in life, we added a second car, then a house, then an umbrella policy, and so on.
losttheplot 7y ago
Why is it that almost every company that provides a service with the potential to be in perpetuity, like insurance, always fee creep their customers to the point that you switch because you know you're being fucked compared to what the market "intro rate" for new customers is? You switch only to be back what you were paying before the switch after three months or another time lapse. When there are few providers in any market, they are colluding to fuck consumers, that are forced into a musical chairs game for little savings.
- turc1656 7y ago
  I imagine it's because these are almost always public companies that need to show earnings growth. They are always trying to improve margins and their stock price. That's much easier than actually figuring out a great marketing plan to acquire new customers. And also far cheaper, too.
- munificent 7y ago
  I like to think of this as "attention arbitrage". Bank fees are a good example. To you and I, an extra $3 bank fee is annoying but not worth allocating enough of our attention to avoid it. We aren't in the business of spending our whole damn day minimizing random bank fees. But bank administrators are in that business. They spend their whole day trying to figure out how to maximize thieir profit and when they roll out a fee they can apply to millions of customers. There are enough customers hit by this they could summon enough total attention to push back, but the attention is divided among all those people and easily conquered. Meanwhile, the bank's effort to apply that fee is concentrated among a small number of people whose very job it is to do stuff like this. So banks and other businesses discover cases like this where the quantity of attention they are willing to devote to something is larger than what any individual customer is, and that's where they squeeze.
- astura 7y ago
  Because someone ran an analysis that says you can make $X more by doing one thing that doesn't cost you anything. Many companies just look at the numbers and say "sounds good." It helps that since they are insurers, they know how make this analysis with a large degree of confidence.
kamilszybalski 7y ago
I wish this was a reality here in BC, Canada, unfortunately our required basic car insurance provider is a crown corporation. So instead of competition we get to pay the highest rates in Canada, incur annual increases despite ZERO claims and finally, watch growing debt because of an inherently flawed insurance model. Good thing we have oceans and mountains..
phlox 7y ago
Yes, and you can shop easier by just uploading your current declarations page PDF or linking your account at gabi.com. Most people don't know they are overpaying. [Disclosure: I work there]

toomuchtodo 7y ago

I want a product like policygenius.com, but instead of life insurance they have my entire insurance portfolio (auto, home, renters, umbrella, personal property) and constantly price shop for me automatically as a broker between me and every major insurer. I would also like such a product to be structured so that they can never be bought by Intuit or another incumbent, preferably in some sort of employee owned coop mutual company model (if Vanguard and USAA had an insurance broker child with a tech first demeanor). Sidenote: I’ve been with State Farm for over 20 years, and my rates have only gone down.

fignews 7y ago
A few months ago I switched insurance. I did some shopping with getjerry.com was very slick, didn’t end up going through them though because of large savings when going directly through the insurance company. Will try them again one year in the future. Saved $1.5K/yr
chrisplotz 7y ago
I have a lot of sympathy for this feeling - I am a USAA member, but through family, nothing I did. I feel fortunate that I qualify. My cofounder and I are trying to build a company a lot like you describe to bring "USAA style" to more people. We just did our launch HN last week (Goodcover). It's renters only right now so won't do exactly what you describe, but just wanted to say I totally get where you're coming from.
- deleted 7y ago
  [deleted]

unlinked_dll 7y ago

State Farm has only ever reduced my rate. They do it about once a year. I have shopped around and changing policies would cost be upwards of $50/month more than I currently pay. Granted the best thing you can do for low auto insurance rates is to barely drive. Personally I drive less than 5k miles a year, and my rate reflects that.

bradfa 7y ago
Similarly, I've been with GEICO for over a decade now for my car and homeowner's insurance. GEICO is just a homeowner's broker in New York, Liberty Mutual actually insures my house. I shop every year or two and I've never been able to find a better deal than I already have for comparable coverage, even directly quoting through Liberty Mutual. Regardless, my GIECO rates have been consistently going up these past few years, but it seems every other insurer is also raising rates for people like me (location, history, etc) every time I check. I've never had to file a claim for my homeowner's insurance and I've never been at fault in a car crash, but I've heard some not so great stories about GEICO so hopefully I'll never have to find out.
- astura 7y ago
  I have to say, I was impressed with my GEICO claims experience. A GEICO customer hit my car, entirely her fault, so I just went through her insurance, didn't even notify mine. GEICO was extremely helpful, polite, and prompt and I wasn't even their customer. I opted to use their "full service claims center" which was located at [local reputable body shop/dealership]. I showed up with my car, they had a loaner ready for me up front ready to go with the keys in the ignition and the loaner car was very nice (just a family sedan but a nicer one). The whole process was just very straightforward and easy. Several years later my car was hit by a State Farm customer, entirely their fault, I went through their insurance again. That whole experience was just shit. First they were disorganized and unhelpful. I decided to use their "full service claim center" since my GEICO experience was so good. The place they sent me to was out of the way and somewhere I wasn't familiar with. When I arrived it was some shady looking dumpy body shop. [I almost walked away then, wish I did]. Clerk didn't seem to be expecting me and wasn't prepared, even though I had an appointment to drop off the car and nobody else was there, so I had to fill out paperwork because State Farm didn't send over my information, I guess. After that I had to wait forever for Enterprise to pick me up (so "full service" means that the clerk will make a phone call). Then at Enterprise I had to stand in line and fill out more paperwork. They gave me a Fiat 500, which doesn't have a full back seat and at some point I had two passengers who couldn't fit into the back seat. After they finished the body work they literally didn't put the wheel back on right and it was a couple inches from falling off my car while I was driving. My usual mechanic was shocked.

inetknght 7y ago

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.

astura 7y ago
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.
- perl4ever 7y ago
  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.
reaperducer 7y ago
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.
unexpected 7y ago
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".

RHSeeger 7y ago

I have USAA and can't say enough good things about them. Whenever I call them, they're there to walk through whatever I need with me. The first thing they ask is if everyone is ok; it's trivial, but means something. In general, their rates are really good; it used to be that, when other companies called, you could tell them you have USAA and they're acknowledge they can't match the rates and hang up. Admittedly, not everyone has access to USAA but, if you do, I highly recommend them. Noting this because I've been using them for insurance for decades with no intention of switching.

frayesto 7y ago
Another USAA member here. I haven't had to do an auto claim yet, besides simple windshields, but have had several property claims. They have been great. In fact, right now USAA is in the subrogation process against the offending party for a claim on a bicycle. I've been happy with their insurance products, their even better customer service, and have no plans of changing.
- rmcpherson 7y ago
  When I had a bicycle accident, they fully covered my new bike and related damaged equipment under my renters insurance policy. Service has been uniformly excellent for car claims as well.
- hnburnsy 7y ago
  Counterpoint, had USAA auto for 20+ years, added 2 young drivers and premiums went up 4200 per year. Switched to Geico and recouped 2700 of that. Always shop around.
  - prostheticvamp 7y ago
    Geico is so huge I expected their customer service to be an absolute shitshow. Then I totaled my car, and they were actually helpful and easy to work with. I remain shocked to this day, and I’m still 90% convinced it was a fluke.

JKCalhoun 7y ago

They call it the "loyalty tax". Sad world we live in, right?

JMTQp8lwXL 7y ago
I'd imagine each of these companies has a bean counter for growing their subscriber base. When all insurers raise their prices a little on every policy renewal, people will rotate insurers and who's ever in charge of growth looks good due to new sign-ups, it justifies marketing spend, etc.
dawnerd 7y ago
Probably why AAA likes to make a point of how long you've been a member. People don't want to lose that 'status'

_bxg1 7y ago

Sounds like a classic case of frog-boiling.

noisem4ker 7y ago

In Italy, auto insurance contracts are limited by law to one year in length, so that people are encouraged to re-evaluate their position and get new quotes more often, promoting competition.

lotsofpulp 7y ago
I've never seen one longer than 6 months in the US. And I don't even think it's a contract for 6 months, you can cancel anytime and get a refund for the months you don't have it.
- lostapathy 7y ago
  One year auto insurance in the US is actually super common. I never had it offerered/suggested to me until I became a homeowner - at which point my broker got me a small discount for doing a full year policy for both home and auto.

rexf 7y ago

Shopping for auto insurance has been completely useless for me. When I compared across multiple insurance companies, I was able to pick the "lowest cost" provider. However, when I went to sign up, the price offered was completely different from what I saw shopping on their website. Also, I recently tried to compare my current auto policy with a different insurance provider. The new insurance agent told me my rates would go up with them, so I obviously declined to change my auto insurance. I understand that periodically shopping for better rates is the logical thing to do, but in my auto insurance shopping experience, the numbers all seem arbitrary so shopping is not useful.

Marsymars 7y ago
> However, when I went to sign up, the price offered was completely different from what I saw shopping on their website. In my experience, the websites use an entirely different algorithm than whatever phone agents have access to. I don't bother going through insurance websites' lead generation workflows, I just call a handful and get quotes on the phone from them.

njx 7y ago

This and also do not signup for e-delivery of new policies. I had this on with farmers for home insurance and never realized they had increased the premiums every year. It was my problem that I did not bother to login and check for the documentation section and then open the docs to see the price changes.

jedberg 7y ago

Or build a personal relationship with your agent. I occasionally check my rates with competitors, and they can never beat my existing rate. My agent will call us any time there is a new program or discount that might save us money. My agent understands the value of a long term customer who brings in other long term customers. When we started with him it was because my mother in law was already a customer. We just had car insurance at the time. But as we moved on in life, we added a second car, then a house, then an umbrella policy, and so on.

losttheplot 7y ago

Why is it that almost every company that provides a service with the potential to be in perpetuity, like insurance, always fee creep their customers to the point that you switch because you know you're being fucked compared to what the market "intro rate" for new customers is? You switch only to be back what you were paying before the switch after three months or another time lapse. When there are few providers in any market, they are colluding to fuck consumers, that are forced into a musical chairs game for little savings.

turc1656 7y ago
I imagine it's because these are almost always public companies that need to show earnings growth. They are always trying to improve margins and their stock price. That's much easier than actually figuring out a great marketing plan to acquire new customers. And also far cheaper, too.
munificent 7y ago
I like to think of this as "attention arbitrage". Bank fees are a good example. To you and I, an extra $3 bank fee is annoying but not worth allocating enough of our attention to avoid it. We aren't in the business of spending our whole damn day minimizing random bank fees. But bank administrators are in that business. They spend their whole day trying to figure out how to maximize thieir profit and when they roll out a fee they can apply to millions of customers. There are enough customers hit by this they could summon enough total attention to push back, but the attention is divided among all those people and easily conquered. Meanwhile, the bank's effort to apply that fee is concentrated among a small number of people whose very job it is to do stuff like this. So banks and other businesses discover cases like this where the quantity of attention they are willing to devote to something is larger than what any individual customer is, and that's where they squeeze.
astura 7y ago
Because someone ran an analysis that says you can make $X more by doing one thing that doesn't cost you anything. Many companies just look at the numbers and say "sounds good." It helps that since they are insurers, they know how make this analysis with a large degree of confidence.

kamilszybalski 7y ago

I wish this was a reality here in BC, Canada, unfortunately our required basic car insurance provider is a crown corporation. So instead of competition we get to pay the highest rates in Canada, incur annual increases despite ZERO claims and finally, watch growing debt because of an inherently flawed insurance model. Good thing we have oceans and mountains..

phlox 7y ago

Yes, and you can shop easier by just uploading your current declarations page PDF or linking your account at gabi.com. Most people don't know they are overpaying. [Disclosure: I work there]