GEICO, Allstate to Raise Auto Insurance Premiums

By | May 4, 2015

  • May 4, 2015 at 1:37 pm
    Cindy says:
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    What did they think would happen? You swallow up a huge market share and you’re bound to have losses!!!

    • May 4, 2015 at 2:19 pm
      Agent says:
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      State Farm has reported some big losses on their Auto book because of rising repair costs on Autos among other things. The lizard will find it the same way. Better re-figure the algorithms and give insured’s the rate increase. It is impossible to offer a $496 savings for everyone and Allstate has found that out.

    • May 4, 2015 at 5:08 pm
      SWFL Agent says:
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      Geico didn’t lose money in the 1st qtr of 2015, they just didn’t make as much. The real issue is how tight they operate. They can tolerate a higher than average LR and still experience an underwriting profit. You can bet that Travelers, Liberty Mutual and other IA carriers wouldn’t last long with loss ratios of 75%-80%.

      • May 11, 2015 at 10:17 am
        Bill Wilson says:
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        The tight operating margin they allegedly have presents its own unique problems. If you’re operating about as efficiently as you can and you’re losing money or not earning enough to satisfy stakeholders, you have two choices: (1) increase rates, or (2) reduce loss and loss adjustment expenses.

        For carriers in this position, especially those competing almost exclusively on price, look for reductions in coverage even greater than currently exist in their products vs. an “ISO standard” policy and/or more restrictive claims practices.

        • May 19, 2015 at 7:18 pm
          Dawn says:
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          I say they are going to be forced to join the majority of the market with tighter underwriting guidelines and yes, increased rates. Maybe even a look at the current books’ insurance score etc, would be a good idea instead of just snatching up all the business you can with low rates and improper coverages, and now experiencing more losses than anticipated

  • May 4, 2015 at 1:47 pm
    Mark says:
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    Somehow I just don’t think the jingle “15 minutes could save you 12 and a half percent or more on car insurance” has the same ring.

  • May 4, 2015 at 5:03 pm
    Patrick says:
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    It was bound to happen. I’m just curious to see how much they increase rated in California.

    • August 12, 2017 at 7:51 pm
      Holly says:
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      Ours went up 100%. Apparently our “5 year good drivers” discount expired and one minor accident even though record has a clean history previously. Worse rates for each car on the multiple policy went up not just the driver and car on policy involved in accident!

  • May 4, 2015 at 5:32 pm
    Christian says:
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    My wife and I recently started a new Geico auto policy. We have been receiving mail almost daily from Geico since initiating the policy, and often multiple items of correspondence in the same day’s mail. WHY SO MUCH? Most of the documentation is repetitive, meaning I’ve already gotten insurance cards, or coverage details. If they mailed less, that would be an area of cost savings. I’m sure there are a lot of other ways to cut costs rather than just jump to increase rates to keep their margins high enough for the shareholders.

    • May 5, 2015 at 1:35 pm
      Jared Smith says:
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      Right, because saving on paper will make up for millions lost…

    • May 5, 2015 at 4:36 pm
      KimKim says:
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      I am not sure why you are getting duplicates, but most companies offer online delivery of documents. This not only saves them costs on mailing supplies and paper, but helps support “green” initiatives. It is a pity more people do not opt-in.

    • May 8, 2015 at 2:39 pm
      Agent says:
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      GEICO is not publicly traded, it is owned by Berkshire Hathaway. Their operating expenses are VERY tight. I speak from experience in meeting with multiple insurance carriers and execs, other companies spend much more freely/frivilously than GEICO.

      • May 12, 2015 at 4:14 pm
        insurancecomp says:
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        Berkshire Hathaway is a publicly traded company

    • May 11, 2015 at 10:18 am
      Bill Wilson says:
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      More important…have someone compare the COVERAGE you have to that provided by other policies/insurers.

      • August 19, 2015 at 7:59 am
        RAL says:
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        Need to and will now that my premium went up over 20% for no good reason

  • May 5, 2015 at 8:19 am
    Random guy says:
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    Perhaps they could just spend $988 million dollars on advertising the next year to make up that $30 million they lost. I can’t see the article now but I think it said $1.018 BILLION on advertising. They could cut that significantly down. They have too many commercials as it is.

    • May 5, 2015 at 9:33 am
      Agent says:
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      You are right Random. They could cut their advertising down to about what Allstate and Progressive combined spend and still save some money. They would rather hike the premium to their policyholders.

      • May 11, 2015 at 12:01 pm
        KP says:
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        And their employees won’t see any of that either.

  • May 5, 2015 at 11:23 am
    Michael says:
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    From a competitors perspective seeing them run 75 to 80% loss ratio AND grow policies in force over 30% is scary! I don’t know of another carrier that could do anything close to that level of growth while keeping losses under 100%. It’s way past time for the big boys to wake up and treat Geico as the legitimate threat that they are! I started seeing them them with in preferred type households with high limits and rates are half what my carriers offer.

    • May 11, 2015 at 10:23 am
      Bill Wilson says:
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      They can do it because consumers have been duped (and not just by GEICO) into believing that auto insurance is a commodity where there is no difference between products and service providers other than price. Advertising works.

      “There is hardly anything in the world that some man cannot make a little worse and sell a little cheaper, and the people who consider price only are this man’s lawful prey.” – John Ruskin

  • May 6, 2015 at 10:24 am
    RHONDA says:
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    I GUESS THEY SOLD INSURANCE TO TOO MANY CAVEMAN DRIVERS! LOL!!

  • May 6, 2015 at 1:25 pm
    phoenix says:
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    Last I heard, GEICO’s marketing expenses equalled 6% of their GPW.

    You heard that right. NOT 6% of their total expenses. 6% of GPW!

    • May 6, 2015 at 3:43 pm
      SWFL Agent says:
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      I guess you heard correctly. And this article, using 2014 WP #’s and the 2013 advertising #’s, pretty much confirms this as well.

      • May 8, 2015 at 2:43 pm
        Agent says:
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        well with out the market share they have, they wouldn’t able to keep rates low and absorb turbulent trends and losses and expenses, so I guess that is money for advertising to get them at nearly 11% of the market share is well worth. Its the law of large numbers people.

      • May 11, 2015 at 3:37 pm
        Agent says:
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        How about picking another moniker bud. You can be Agent69 if you want, but I am the original Agent.

  • May 6, 2015 at 4:12 pm
    random says:
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    As a former employee of Geico and now major competitor, I can say the cost of advertising is not paid by the premium generated from insurance policies but from a marketing account through berkshire

    • May 7, 2015 at 10:59 am
      V says:
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      Dear Random,
      So the cost of GEICO advertising, does not come out of the premium bucket, but instead comes from a Berkshire marketing account. So where does the money come to fund that marketing account? Does it magically appear out of nowhere to fund GEICO advertising of OVER 1 BILLION YEARLY? Do you really believe that nonsense?

      • May 7, 2015 at 12:07 pm
        Agent says:
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        V, maybe it comes from Uncle Warren’s stash.

      • May 20, 2015 at 2:52 pm
        Analyst says:
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        Berkshire is an unbelievably large conglomerate and a billion to fund advertising is just an accounting entry. They have a great long term strategy where components are structured to feed other components. Raw materials to transportation to manufacturing to retail to real estate to furniture to auto dealerships to… hopefully you get the picture. GEICO is one piece of the strategy and it does not stand alone.
        Does it appear out of nowhere? No, but that doesn’t mean it hits GEICO’s bottom line directly either.

        • May 21, 2015 at 10:02 am
          Agent says:
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          Something hit their bottom line or they wouldn’t be raising their rates Analyst.

        • August 19, 2015 at 8:04 am
          RAL says:
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          I was just thinking that Analyst. “Creative Accounting”. The wonders of being a large conglomerate. One companies profit is another companies “expense”; under the umbrella of course.

  • May 7, 2015 at 1:03 pm
    R says:
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    “Some insurance companies may exacerbate price competition by selling their products for a period of time at less than adequate rates. GEICO will not knowingly follow that strategy,” the management said in its year-end 2014 filing.

    So, that’s their strategy… now. Does that mean that it WAS a strategy they were following? Or perhaps, does that mean that Top Management was staying insulated while indirectly allowing lower management to behave in this manner?

    When you market yourself on price, you get people to shop you for price. In my experience, 4 out of 5 people who shop solely on price are going to be high risk individuals. I’ve also heard that GEICO skimps on their upfront underwriting in the quote and bind process, so I can imagine why their UW expenses increased as well.

    • May 8, 2015 at 7:44 am
      glassflower says:
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      Sorry R, but I believe every intelligent, informed consumer is going to consider price when buying any product.

      You may choose to pay the highest price even though competitors offer the exact same product at a lesser price, but I do not believe the majority of consumers are going to follow your choice.

      • May 11, 2015 at 10:28 am
        Bill Wilson says:
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        “competitors offer the exact same product at a lesser price”

        In general, insurers who heavily advertise have inferior products to what you can buy from other carriers, often for the same or lesser price. Consumers give too much credence to advertising and there’s a limit to how far they will go to get competitive quotes. But, again, this is not a consumer’s biggest mistake. The biggest mistake is believing advertising and comments that they’re comparing “the exact same product.” Not even close in too many cases.

        • May 11, 2015 at 11:59 am
          SWFL Agent says:
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          I think if you meant to write that “insurers who heavily advertise” attract a large segment of policyholders who make poor coverage choices that are centered around price then that my be accurate. I wouldn’t agree that insurance companies that advertise heavily are inferior.

          • May 11, 2015 at 4:13 pm
            Bill Wilson says:
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            It’s a short list of insurers who heavily advertise to consumers, especially on local media. Generalizations are dangerous but, in general, the products they sell are inferior to an “ISO standard” personal auto policy and they more commonly sell minimum limits.

          • May 12, 2015 at 10:09 am
            Agent says:
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            Liberty Mutual also advertises fairly heavily and I like their ads the best since they talk in terms that most people understand instead of just pushing price all the time.

    • May 8, 2015 at 9:40 am
      SWFL Agent says:
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      R, I have no reason to defend GEICO but they’ve got a pretty good track record of growth and profitability. I doubt their Sr management was “insulated” from a lower management strategy to price business at loss. From an auto perspective, State Farm is more guilty than most for operating at an underwriting loss. Geico isn’t always the lowest price but they have many consumers thinking they are, which helps retention and profitability.

      • May 8, 2015 at 11:33 am
        Agent says:
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        Our Progressive rep told us they plan for a combined L/R of 93%. They have long taken trash business with multiple violations, accidents, charged for them and made money. We put all our troubled business with them because we don’t want to ruin our L/R with our other Standards. Besides, our Standards don’t want the business anyway.

        • May 11, 2015 at 3:38 pm
          SWFL Agent says:
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          I believe the Progressive rep should have told you – CR of 93%. But we all knew what you meant.

          • May 12, 2015 at 10:07 am
            Agent says:
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            SW, I did say combined. Sorry if you misunderstood.

          • May 13, 2015 at 2:57 pm
            SWFL Agent says:
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            No Agent, I did not misunderstand. Your statement that included “combined L/Rof 93%”, with L/R being an acronym for Loss Ratio, is not Progressive’s goal. I know you have a penchant for accuracy and since most of us aren’t as well rounded in the insurance industry as you are, I pointed out the correction for the benefit of others. After all, I know you would do the same for any one of us.

    • May 16, 2015 at 1:57 pm
      CS says:
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      YES I have heard that too. They wont rate for wrecks or tickets in the beginning.

  • May 8, 2015 at 2:05 am
    aliza mekil says:
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    maybe it comes from Uncle Warren’s stash.

  • May 8, 2015 at 2:46 pm
    Bill Wilson says:
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    The real issue to regulators and the public should not be rate increases, but rather coverage decreases. What some carriers are allegedly doing is reducing coverages and applying more stringent claims settlement practices.

    When you compete almost exclusively on price and you can’t cut expenses any more than you already have, next comes cuts on the loss/loss adjustment expense side. Increasingly onerous exclusions in the policies of price-focused insurers should be regulators’ overriding concern given public policy issues.

    • May 8, 2015 at 3:52 pm
      Agent says:
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      Bill, I have seen numerous policies from GEICO and Allstate & Farmers which had no U/M, no PIP, minimum liability limits, high physical damage deductibles all to keep the price down. God help the poor policyholder if there is an at fault accident or if they get hit by a U/M.

      • May 8, 2015 at 5:15 pm
        John says:
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        I’ve seen the exact same thing from State Farm, Farm Bureau, Progressive, Shelter, Nationwide, Liberty Mutual, Hartford, and EVERY single company you can name. Don’t play the holier than thou card to exclusivity.

        • May 12, 2015 at 5:19 pm
          Agent says:
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          My Liberty Mutual Insurance agent would not sell me a policy with less than 100/300 liability limits. I had 50/100 before switching. They explained why and said if I wouldn’t increase it they didn’t feel comfortable selling it to me.

          • May 15, 2015 at 11:17 am
            Agent says:
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            You don’t seem to learn very fast about using someone else’s moniker, do you? I will be glad to help you find another if you like.

    • May 11, 2015 at 10:35 am
      Bill Wilson says:
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      The broad coverages and limits you purchase are more a function of what the insurer’s agent is willing to do for carriers who sell through captive or independent agents. Good agents have “minimum limits” procedures. I know agencies that won’t sell auto insurance with limits less than $100/300/50. Needless to say, there are consumers that won’t buy from them, but that’s OK.

      A few years ago, Hulk Hogan’s son had an at-fault accident that seriously injured a passenger who filed a claim/suit against him. According to new accounts, Hulk’s family didn’t even have a personal umbrella policy, so their limits were grossly inadequate. So, of course, he sued their agent who won the suit when he was able to produce evidence of multiple offers of higher limits and deductibles.

      You’d be amazed at how many people with ample financial resources have minimum limits because that’s what they were sold. I can give you examples of these insurers’ direct sales reps recommending minimum limits and no UM.

      But, again, the big issue is not the broad coverages under policies but the exclusions that pare these coverages down. Here are some examples:

      http://www.iamagazine.com/magazine/read/2014/07/01/price-check

      I get new ones literally weekly.

      • October 15, 2015 at 10:17 am
        Agent says:
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        Bill, you might also be surprised at how many people with ample resources buy minimum limits because they are “tight” with their money. Then, they sue if there is an accident and try to blame the agent. That is why documentation in the file is so important.

        • October 16, 2015 at 11:47 am
          Bill says:
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          Wouldn’t surprise me at all. You may recall when Hulk Hogan’s son had a serious auto accident with injuries and a claim/suit was brought against him. Turns out that the Hulkster, with assets estimated in excess of $30M didn’t even have an umbrella policy. So, of course, he unsuccessfully sued his agent who, as I recall, had proof of multiple recommendations and offers of higher limits.

          I know a risk management consultant who says he often encounters very high net worth families that have bought auto insurance online.

    • May 12, 2015 at 10:05 am
      Agent says:
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      Bill, do you think Allstate is having any issues with their Claims Satisfaction guarantee if they are writing minimum limits, cutting coverages to get to a lower price? Their answer to the customer would be – Mr. Customer, you selected the low limits of liability and we are sorry you are light on your coverage, but we will not pay more than our limits we wrote. Sorry!

  • May 9, 2015 at 10:17 pm
    Tom Vivian says:
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    There are several things wrong with this picture that Geico is projecting by this report:
    1) They are spending about the same amount on advertising each year as on profit they EXPECT to make.
    2) They are claiming that their profit is off by 55% just in one quarter alone — the only way to achieve those results as far as I know, are with a HUGE natural disaster (which we haven’t had, or by creative accounting practices.
    3) Even assuming that the numbers are accurate here, Geico could double its profitability by cutting its advertising budget in half. GEICO is saturating virtually every medium with non-stop ads, I cannot go on a website or watch TV for fifteen minutes without seeing a GEICO spot (sometimes two or more). That much advertising doesn’t pay dividends — Once your message is out there, it’s out there.

    • May 11, 2015 at 9:59 am
      Agent says:
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      Tom, I think we call that the Law of Diminishing Returns. You are right about every major network and cable network being wall to wall lizards.

    • July 10, 2015 at 10:02 am
      Agent says:
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      I think GEICO took some pretty big hits in the spring floods in Texas, particularly in the Houston area. A lot of cars got completely ruined and had to be replaced. Let’s hope they will continue to see deterioration of their profits so the playing field will level off.

  • May 11, 2015 at 3:09 pm
    shawn says:
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    Geico is funded by Warren out of his other business ventures and not just from the loss’s or gains of this pretend insurance company he operates. One of their employees told me themself when I asked them How they could afford to offer rates so low while experiencing high loss’s , they said, because the man who owns the company has allot of money. They cannot sell insurance for the rates they do with even higher risk exposure than the other major companies in the same market due to their no agent operation ( even though they lie and say they have numerous “local agents” and without taking these increases. I’m glad to see it and get sick of their market saturation of their brainless commercials that never educate the consumer about insurance in any way. What a huge waste of money they throw away on the mindless adds they bombard the public with. Allstate as well is the worst insurance company for claims fairness in the industry according to the survey done by the American association of justice. Tom Wilson’s excuse that their experiencing higher claims loss’s because the economy is good and more people are driving is hilarious. They probably just got sued multiple times for not paying open claims and have to offset it with an increase. Both of these companies are industry embarrassments and along with Regressive Insurance and their Low IQ Flo adds are the bottom of the barrel in my mind. Hope the rates continue to increase and Warren’s deep pockets dry up and they go under. Allstate just needs to stop committing fraud with their professing to be the best at claims handling and service when according to the facts they arbitrate most claims to see how little they can get away with paying. So much for the Allstate Agent gloating the other day about a competitor taking a rate increase when they are now taking one even higher. Couldn’t happen to 2 better companies.

    • May 11, 2015 at 3:40 pm
      Agent says:
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      Why are you on Flo’s case? After all, she just gives the prospect the gadget and tells them to pick their own price. That is very appealing to the low information people we have in our midst.

    • May 11, 2015 at 3:48 pm
      SWFL Agent says:
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      Of all of the Berkshire Hathaway companies, why would Buffet choose to fund Gieco’s losses with his profits from his other companies? Certainly Geico can be a little more aggressive with investment strategies because they have Berkshire Hathaway money to back them up. This is an advantage that Progressive and others do not have. Could be wrong but I just don’t see Geico rolling-up massive underwriting losses and then being bailed out by Buffet.

      • May 11, 2015 at 5:36 pm
        Agent says:
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        If GEICO, State Farm, Allstate, Farmers keeps rolling up underwriting losses, there will be consequences and rate increases. They are bound to be writing a lot of what another poster said – Cave Men drivers and those drivers will have at fault accidents which are expensive.

        • May 15, 2015 at 11:53 am
          SWFL Agent says:
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          Where in this article did it state Geico has incurred an “underwriting loss”?

    • May 12, 2015 at 10:16 am
      Michael says:
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      Yes – one of the wealthiest investors in the world is recklessly throwing money at his insurance company because he operates without a plan. I’m sure that is it.
      As the saying goes “don’t hate the player hate the game”
      My carrier would kill to have an 80% loss ratio.
      I’m glad to see Geico take rate but it won’t even come close to making us competitive with them.
      I’m not worried though – I have new signs for my office and my staff all took a class on how to sell value so I’m sure that will get more people to pay 30% to 100% more for their car insurance.

      • May 20, 2015 at 9:55 am
        Agent says:
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        Michael, if you can ever get in front of the customer and present your coverage against the competitor policy for coverage, tell them what could happen to them in the event of an accident at fault or not at fault, you will have better luck. Many consumers have no clue what they have or don’t have. The question they ask is – Do you mean that I don’t have Uninsured Motorists, PIP and they only write minimum limits? They told me I was covered.

  • July 8, 2015 at 7:03 pm
    Bruce Beeswax says:
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    As a soon-to-be former Geico customer, I say thank God for competition!

    • July 9, 2015 at 10:24 am
      Agent says:
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      The new watchwords in our industry is “Price Optimization”. It works like this. Take a loyal, long term customer with no claims, pays their bill promptly and give them a rate increase and hope it is not so high that the customer leaves. Then, you write someone new that you know nothing about and give them better rates to put them on the books. Allstate has been doing that for a while now and I would imagine many other carriers as well. That is how actuaries think and it is abominable.

      • August 11, 2015 at 5:22 pm
        Sonny says:
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        Amen and Amen!

      • August 19, 2015 at 3:10 pm
        Bill says:
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        8 state insurance commissioners have issued directives that price optimization is a no-no. If you polled them all, I suspect you’d find that this opinion is unanimously held by any regulators that understand the profession.

        • September 18, 2015 at 9:31 am
          Agent says:
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          Bill, does that mean that 42 Insurance Commissioners let price optimization go on without consequence?

  • August 11, 2015 at 5:21 pm
    Sonny says:
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    “There are more accidents now over the last couple of years than there have been because economic activity has gone up” and more people are driving,” said Chief Executive Officer Tom Wilson. “We and other people have been raising our rates to account for that.”

    What a buffoon. The losses have increased because the company is losing 20+ year customers to new business from who knows where, because rate hikes are put on the back of loyal long time customers.

    • August 12, 2015 at 9:41 am
      Agent says:
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      Sonny, it has nothing to do with economic activity and more people driving. The economy has been in the toilet basically for 7 years now. There are more accidents because of distracted driving with people on their cells constantly and trying to text and drive. They have a losing strategy and their minion actuaries have a very bad model.

  • August 19, 2015 at 7:55 am
    RAL says:
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    As an 8 year customer of Geico; and loyal at that; in Illinois does anyone recommend an insurer that can give a fair quote with reputable coverage?

    My Insurance went up 20+% and have not received any moving violations or accidents in years. When I asked for an explanations through customer support; they just played verbal ring-around the rosey.

    • August 19, 2015 at 9:30 am
      Agent says:
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      RAL, if you want to go the direct route like you have done with GEICO, Liberty Mutual is quite good. If you want to go to an Independent Agent representing several markets, you may do even better. Don’t skimp on coverage taking state minimums like so many do to get a cheap price.

  • September 17, 2015 at 5:15 pm
    Robert Davis says:
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    Geico just canceled our policy, but waited 2 weeks to notify us, and sent us policy documents to make us think we were insured. Upon cancel notification, they refused to reinstate the original policy and demanded we pay literally 2x as much in premiums. So we went to allstate (did not see this article yet unfortunately). Paid the deposit the same day, then received notice that they too (allstate) would hike the rate after 15 days if we could not provide proof of insurance over the few weeks that geico refused to notify us. (i provided them the past 6mo of coverage, and also stated we could pay the full premium up front to avoid the hike, or send them the 11 years of coverage from geico) So… no matter how we slice this, we cant avoid the hike. We are now contacting local agencies to see if we can find one not underwritten by these giant evil insurance corps. I’m flabbergasted that both geico and allstate refuse to negotiate. We have 3 vehicles, and no claims in the past 5 years… it should be criminal for these companies to conduct business this way. Advice is welcome, but more so we need to spread the word, only moving our insurance away from the giants will fix this dirty practice.

    • September 18, 2015 at 9:39 am
      Agent says:
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      Robert, there are numerous factors that go into rating on Personal Auto. One factor may be credit score. Some carriers rate for location even down to the zip code. Another may be moving violations. One good way to get a better price is to bundle coverage with a Homeowners and you then get a discount on both. If you rent, a Renters policy will do just fine. Any underage drivers in the household? Some carriers really sock it to younger drivers on rates. You need a good local agent to go to bat for you since Direct Writers will cut you off at the knees.

    • September 21, 2015 at 11:28 am
      Bill says:
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      What you have sounds like a nonrenewal rather than a mid-term cancellation. They are different. But, in both cases, state laws usually prescribe how much advance notice you must be given if the insurer is terminating coverage. It is not clear in your case exactly what happened. Did the insurer tell you they were not renewing coverage? Or did you fail to respond in time to an offer to renew? Insurance policies are legal contracts…it’s important that you read your policy to understand what your rights and obligations are.

  • October 15, 2015 at 9:08 am
    Melvin Tiell says:
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    Been with Geico for 8 years. Never had an accident,moving violation or any claim in that time frame. Each year my premium is raised. Our two cars (2014 Hondas, Accord and Civic) are garaged and we live in a gated,24 hour security enforced community. We put less than 3,000 miles a year on both cars and we were told by Mr. Roger’s office (regional VP) that this was across the board, age related (I’m 71, my wife 68)and cost of repairs. Interestingly, my civic cost half my accord and is more expensive to insure in each category. I feel we are being ripped off and the Insurance department lets them. Seems they are not happy with millions in profit but want tens of millions. I guess Mr. Buffet is not as generous as he made out to be.

    • October 16, 2015 at 11:42 am
      Bill says:
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      Why do you remain with them? Are you swayed by their advertising? if you’re in a gated community and driving new cars, it sounds like you likely are above average in assets. Why do you not have your home, auto, and umbrella insurance with a carrier that offers all of these as part of a package tailored to your unique exposures to loss?

      • December 28, 2015 at 10:45 am
        Agent says:
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        Bill, I just read a new story on Property Casualty 360 that brings out the fraud factor in insurance rates. It costs up to $80 Billion with a B in America. Every scheme known to man has been perpetrated trying to rip off the insurance industry. That has to affect rates and the problem is only getting worse.

    • November 5, 2015 at 2:37 pm
      Agent says:
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      Melvin, many carriers out there discriminate by age as part of their Price Optimization scheme. Also, certain models of cars rate higher than others due to their damageability in an accident and more expense to repair. Foreign cars are generally more expensive to repair than domestic because of the parts issue so they rate higher.

    • December 23, 2015 at 11:24 pm
      Tom says:
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      You didn’t say how much your premium went up.

      All premiums go up each year due to inflation. Auto repairs and medical bills are inflating faster than CPI, so auto premiums are also inflating faster than CPI.

      Premiums also go up with age after about age 65. If you drive fewer than 3,000 miles a year on both cars, then you should .

      Age-based underwriting actually reduces your premium. It’s the 17 year-olds who really get socked.

      Unfortunately, insurance companies are very opaque about pricing. They give you one rate, and they don’t tell you how to calculate it. I wish states would require them to print out the whole rate calculation, so you can look for any outliers.

      • December 28, 2015 at 2:45 pm
        Bill says:
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        THEY don’t know how the premium is calculated. I had an actuary tell me they are working on a data analytics model where the premium could be based on over 600 factors. It would be impossible to determine if the underlying rate is adequate, excessive, or unfairly discriminatory, a measure government by insurance laws in every state.

        At one time we were moving from specific to class rating, especially for commercial property coverages. Historically, personal lines and most liability insurance has been class rated. Now, with the advent of predictive modeling and data analytics, the days of class rating appear to be about over.

        One of the issues is GIGO. Credit scoring is notoriously subject to bad or erroneous data that is not adequately vetted. I’ve personally been the victim of improper credit scoring, but because I knew what I was doing, I was able to correct it. In the first instance, I was overcharged $1,000 when they used the credit score of another customer and in the second instance, it was over $700 when they used three incorrect “reason codes.”

  • November 5, 2015 at 12:55 pm
    Robert says:
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    I switched from GEICO and saved $300!!!

    • December 29, 2015 at 11:14 am
      Agent says:
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      Robert, did you bundle your Home & Auto together when you switched from GEICO? It usually works out better and discounts are applied to both policies making the overall cost less. Some carriers are a little higher on the Auto, but when you put both together, the overall cost is less.

  • November 6, 2015 at 7:18 am
    Den says:
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    Example of Geico quote and bind underwriting standards. Insured with 2 speed, improper turn and 2 at fault accidents in household gets surcharge for five figure loss. He come to office and complains. We explain reason and offer possible solutions. He leaves dissatisfied. Geico writes him at $500 lower than current policy. He leaves. That style of underwriting will catch up with them sooner or later.

    • November 6, 2015 at 9:41 am
      Agent says:
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      Den, one of my customers we have had for a while and had adverse experience with claims and moving violations didn’t like his renewal premium and took a no report quote from GEICO. He said he could save $500 on the premium even with 2 underage boy drivers. He sent me the quote. At the bottom of it, there was a disclaimer and said it was “subject” to driving records or credit factors. I told him to have them run a quote with reports. When they did that, their quote skyrocketed and was higher than ours. Had he blindly accepted their quote without checking, he would have had a very nasty surprise in the mailbox when it was issued. This is how GEICO operates and they lure in the unsuspecting with their low ball quote and then let them have it.

  • November 6, 2015 at 8:40 pm
    Cindy says:
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    My husband and I (grown kids, no tickets, good area, no accidents in years and great credit) have shopped for other quotes. No one compares apples to apples price wise. My rates went up too.
    But less than eggs, chicken and my health premiums. Happy customer

    • November 9, 2015 at 11:47 am
      Agent says:
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      Cindy, you may have received “Maintenance Rate” or what we call “Price Optimization” that many carriers practice now in their quest for more premium.

    • December 3, 2015 at 8:32 am
      Bill says:
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      If, by apples to apples, you’re referring to GEICO’s policy vs. that of other insurers, then you’re not actually making an “apples to apples” price comparison. Compared to the “ISO standard” personal auto policy, GEICO’s product provides significantly less coverage. The same is true for many insurance companies who heavily advertise.

      • December 30, 2015 at 11:17 am
        Agent says:
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        Bill, a new article this morning on Berkshire Hathaway said Uncle Warren has taken an 11% downturn in the stock market, the worst performance since 2009. GEICO customers, prepare for another rate hike.

  • December 5, 2015 at 6:14 pm
    Ihate Guyko says:
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    Yeah they have raised my rate ever single time my policy is renewed.
    Drop dead.

    • December 7, 2015 at 12:23 pm
      Agent says:
      Well-loved. Like or Dislike:
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      Ihate, good moniker by the way. You have been optimized. If there has been no changes, no vehicle changes, no speeding, not tickets, no accidents, no driver changes, they are just applying their optimized rates.

  • December 29, 2015 at 3:13 pm
    ohiodriver says:
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    geico just raised my premium by 33%! I have no accidents or citations of any kind to warrant this increase. Apparently the lizard needs a raise. So long a-holes.

  • February 4, 2016 at 8:14 pm
    Mason says:
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    How did they rise the premium? what are the local gov. jobs are? I don’t know how they did it. But it’s ridiculous

  • February 18, 2016 at 4:16 am
    t says:
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    No tickets, no accidents, no claims, over 15 years and they raise my rates by 10%. Screw them. Ill find another company and change my HO also. Good bye lizard, stick it!!!!!!

    • February 18, 2016 at 9:47 am
      Agent says:
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      I saw another article by Property Casualty360 the other day that the major carriers are also discriminating against “Renters” The typical renter of a house or an apartment gets charged more than someone who owns a home. The bundling discount is much less if the customer has both lines with them. Also, it is primarily credit scored and income is less for renters than the typical Homeowner so here is your higher rate.

      • February 18, 2016 at 9:57 am
        Bill Wilson says:
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        The ardent supporters of credit/insurance scoring say the scoring is independent of race or income. Perhaps so, but it’s really, really hard to believe that’s 100% true. And, as I have posted before, in the past 3 years, twice the credit score information used for me was wrong. Questionable data with questionable accuracy and reliability doesn’t foster a great impression of an industry that is largely reviled by consumers. When this reaches a tipping point, the door swings wide open for “disrupters” offering a better product or experience.

      • August 11, 2016 at 1:01 am
        Mark says:
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        That’s because people who own homes are generally more responsible than renters. In addition, low income does not equal worse credit. Irresponsible behavior and not managing your finances causes bad credit. So, agent, please try to stick to what you know, which basically means stop posting.

  • May 19, 2016 at 7:16 pm
    Rob says:
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    Any suggestions as to whom to switch auto insurance to? State Farm? — Allstate just hit me real hard with an increase…and this says their profit went UP. Went UP by 13 percent!!!!

    • May 20, 2016 at 9:59 am
      InsuranceCommentary.com says:
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      The national profitability of an insurer may have nothing to do with YOUR profitability, that of your geographical area, experience with your type of vehicle(s), and on and on and on. But if you’re looking for comparisons, go to http://www.trustedchoice.com where an independent agent in your area can give you a number of quotes. Your first concern should be the POLICY you buy…they are not all the same. Many policies in the marketplace are sorely lacking in coverage. The last thing you want is to lose most of what you own and have your wages garnished for the next 20 years because you saved $100 by buying an inferior product.

      • August 11, 2016 at 1:03 am
        Mark says:
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        Some of those policies sorely lacking in coverage are peddled by independent agents just looking for the sale, including lots of those Trusted Choice agents. In fact, independent agents are probably responsible for the vast majority of these bad policies. Farmers, Nationide, State Farm, Allstate, etc don’t even offer policies with poor coverage forms.

  • November 10, 2019 at 2:43 pm
    Jay says:
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    I do note Allstate run commercials daily and they treat their customers like crap, they fight consumers that file injury from accidents and their Ads are misleading. if you go on line and look at how they harass their clients and say you are in good hands is laughable what they really mean is You are in HORRIBLE hands and we will cheat you and lie to you and take your money and continue to lie. They use actors and pay them well. Just do your own research and look at the court system through out the country and see how often they are sued from screwing elders, and clients who lost their lives with their phony ads. In court they will not let you mentioned the insurance compaines by name. Any time I hear their name I will speak ill of them as well as ALLSTATE and State Farm. I will continue to tell all my friends and anyone who will listen how I was treated personally and court transcripts of their false advertisments. JJ



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