GEICO commercials

[Chad]

I thought I switched to Geico, but they just f'ed me out of $75.
They quoted me a rate lower than state farm, so I dropped state farm and switched. Three weeks later, Geico upped the rate ~30%. I asked why, since I had a previous quote. They said in 2002 I had an accident that I didn't disclose. Their questionaire didn't go back that far (from what I remember), and anyway, can't they do their own checkup on me before they quote if I am soliciting a quote from them?

They refunded me all but $75 for some reason. I was too busy to call them on it unfortunately at the time, but went back to State Farm.

I wish insurance companies would spend less of their clients advertising and more lowering rates. Same goes for drug companies. No wonder rates/prescriptions/insurance are so high.

I'm guessing the $75 was a pro-rate premium for coverage provided from the day it started until you cancelled. If so, that is totally normal and fair.

As far as the timing of their premium increase, that is a little cheesy. The reason they don't do that up front is that MVRs/CLUE reports cost $. I've been out of the game for almost 4 years, but a full MVR/CLUE used to run anywhere from $7 to $15 PER DRIVER...that may have increased by now. I can see them not wanting to spend that on EVERY SINGLE QUOTE...but they should have run it immediately after you showed committed interest....not three weeks later.

As far as spending $$ on advertising....GEICO, Progressive, and SafeAuto are the 3 that do that the most in my area. A lot of independently represented insurance companies barely advertise at all. I saw many cases where our quotes would beat the direct sellers.

As far as insurance premium variances....it isn't like buying a hamburger. When I quit insurance, we were processing 50-100 pieces of information just to give an auto insurance quote. It's probably more complicated now. There's tons of actuarial and statistical analysis that has gone into the set rates. Plus, (at least in Indiana) all rates have to be approved by the state government. Variance in rates is very complicated and usually not the result of any one thing, but dozens of things.

[Spivonious]

I got a quote on their website once. It was over $200 higher than my current insurance with Allstate. Plus I want to step on the gecko every time I see him on TV.

[442w30]

I'm guessing the $75 was a pro-rate premium for coverage provided from the day it started until you cancelled. If so, that is totally normal and fair.

As far as the timing of their premium increase, that is a little cheesy. The reason they don't do that up front is that MVRs/CLUE reports cost $. I've been out of the game for almost 4 years, but a full MVR/CLUE used to run anywhere from $7 to $15 PER DRIVER...that may have increased by now. I can see them not wanting to spend that on EVERY SINGLE QUOTE...but they should have run it immediately after you showed committed interest....not three weeks later.

As far as spending $$ on advertising....GEICO, Progressive, and SafeAuto are the 3 that do that the most in my area. A lot of independently represented insurance companies barely advertise at all. I saw many cases where our quotes would beat the direct sellers.

As far as insurance premium variances....it isn't like buying a hamburger. When I quit insurance, we were processing 50-100 pieces of information just to give an auto insurance quote. It's probably more complicated now. There's tons of actuarial and statistical analysis that has gone into the set rates. Plus, (at least in Indiana) all rates have to be approved by the state government. Variance in rates is very complicated and usually not the result of any one thing, but dozens of things.

I can buy that explanation, but if I remember correctly when talking to gieco, they went back 2 years farther than any other insurace company, and I believe 2 years further than their online questionaire. I may be mistaken, but that's what I remember.

As for the $75, that's the way I looked at it too, but to me it was BS that they "quote" you a price, then change it later. It's not a "quote" if they don't stick to it. It's an "estimate".

Regardless, they will never see a penny from me unless they legitimately save me hundreds or thousands in the future. I'd rather get a "quote" in a few days or hours from a good company than a "quote" that gets renigged instantly.

[Chad]

Companies vary a lot in how they treat violations/claims and how far they go back. It's really whatever makes a particular company's actuaries feel warm and fuzzy inside. It sounds like GEICO looks back 5 years.

Regarding them changing the rate after the fact, I can't say for sure why they did what they did. But as mentioned before, it would be prohibitively expensive for insurance companies to run MVRs/CLUEs on every single quote. Plus, collecting the info required to run those reports "just for a quote" would probably "off" most people.

Where I worked, we relied on the info provided by the proposed insured when preparing a quote. If they showed committed interest, at that point we would run the reports if a company allowed us to. Some required that you send it all in and they would run the reports....that could cause a delay exactly like you mention.

One thing I ran into time and time again, was extremely "bad memory" from proposed insureds when it came to driving history. As I got better at the game, I could get proposed insureds who initially would say they "had no idea" what had happened in 3 years, but after 5 to 10 very carefully worded questions I could usually nail down their history almost to the day and time. Many amazing memory miracles took place. lol. Others never would surrender the information. Then we or the company would run the reports and the insured would get anywhere from a surcharge to complete termination of the policy. Then they'd get mad at us, for providing a quote based on the inaccurate info they provided. ????

Not saying that's what happened, but that's some of the stuff that I witnessed. If GEICO only asked for info back to 3 years, then penalized you for something that was past that time frame, then I'll agree that was lame. Really, a huge direct company like GEICO should be able to run the reports right when you say "I'll buy", then they could deal with any problems right on the spot. Then again, they may hold off, so they can at least get some earned premium to offset their expenses to run the reports.

Sorry for the book....insurance was a very complicated and sometimes frustrating business.....but being away from it for awhile it's kinda interesting to look back and think about the process.

Edit: just like you saw an increase, I also saw cases where something would end up in the insured's favor and they'd be notified of a premium decrease a little while after they applied for the policy. I didn't hear too many complaints when that happened. Bottom line is that the rates are filed and approved with state government (at least in Indiana) and they have to charge what they're supposed to charge.