Auto Insurance Question

RichZ · Mar 8, 2009

I have State Farm, and last week we got a letter that they are cancelling our auto insurance. We have 2 pick ups and a cargo van. The letter said it was due to a speeding ticket (8 mph over the limit) that I got 4 years ago, and one my step daughter got 3 years ago. My step daughter hasn't lived with us for 3 years. When my wife called to tell them that my step daughter doesn't even live with us, and isn't even on our insurance (and never was), they said it was also because I had 4 wind shields replaced over 8 years, and had a fender bender. The fender bender was in an auto mechanic's lot, and one of the workers drove a car into the back of my pick up while I was about to back up. He claimed that I backed up into the car. I called my agent, and he said that they'd send someone to check it out. My agent called me back and told me it wasn't worth fighting, the repair was only about $100, and they'd cover it. Now, several years later, they're using it as an excuse to drop me. For years I paid my premiums without a problem, and now that they find that I've had several very minor claims over 8 years, they want to drop me. I guess it's OK for you to have the insurance, as long as you don't make any claims.

tallyho8 · Mar 8, 2009

RichZ said:
I have State Farm, and last week we got a letter that they are cancelling our auto insurance. We have 2 pick ups and a cargo van. The letter said it was due to a speeding ticket (8 mph over the limit) that I got 4 years ago, and one my step daughter got 3 years ago. My step daughter hasn't lived with us for 3 years. When my wife called to tell them that my step daughter doesn't even live with us, and isn't even on our insurance (and never was), they said it was also because I had 4 wind shields replaced over 8 years, and had a fender bender. The fender bender was in an auto mechanic's lot, and one of the workers drove a car into the back of my pick up while I was about to back up. He claimed that I backed up into the car. I called my agent, and he said that they'd send someone to check it out. My agent called me back and told me it wasn't worth fighting, the repair was only about $100, and they'd cover it. Now, several years later, they're using it as an excuse to drop me. For years I paid my premiums without a problem, and now that they find that I've had several very minor claims over 8 years, they want to drop me. I guess it's OK for you to have the insurance, as long as you don't make any claims.

That's the way all insurance companies work. If you make x number of claims in a certain time period they cancel you. In Louisiana your limit on homeowners insurance claims is 2 within a 3 year period. It doesn't matter if the claim is $1 or $1,000,000.

This is why I keep a high (at least $1000) deductible on all of my policies. If I have a minor repair, like yours that was only $100, I pay for it myself instead of claiming it. The money I save on lower premiums is about enough to pay for these minor claims and I don't get my insurance cancelled or my premiums raised.

One "at fault" claim for $100 on many insurance policies will raise your premium $50 a year for 7 years. You can see that it is much cheaper to pay for the repair yourself. If it gets cancelled, like yours did, then it will probably cost you at least $100 more per year to get a policy with a different company.

dmccarty · Mar 9, 2009

Rich,

Call up the State Insurance Commissioner or whatever they are called up your way and see what they have to say about being dropped.

A coworker a few years ago was notified that he was going to be dropped because he had two claims on the house insurance due to falling trees. He was looking for new insurance and I suggested he call up the State and see what they said about the situation. Turns out his insurance decided to NOT drop him when the Insurance Commission contacted them.

Tis worth a try if YOU want to keep State Farm.

If there is a Farm Bureau insurance company in your state you might want to try them. I went with FB on everything when we moved out of the city. They were cheaper for the same coverage than the company we had been using which was from AAA.

Later,
Dan

RichZ · Mar 9, 2009

Dan, great minds think alike. I called my agent and told him to tell the company's "powers that be" that we were going to do exactly what you said. My agent called us back in a couple of days. Not only are they renewing us, but suddenly our rates are going down. What a coincidence!!!

But, I don't appreciate being treated this way, so I'm pricing insurance with other companies, including the Farm Bureau. We need to increase our farm insurance, anyway.

dmccarty · Mar 10, 2009

Rich,

Glad to see it working out. I would look for new insurance as well.

To heck with them.

Later,
Dan

kthompson · Mar 10, 2009

Richz, be sure to price all polices on property with one company and not just one policy. It is the total pricing you are interested in.

As to AIG, they are really a bunch of small companies they have bought over the years. They in the last few years had began to use the AIG brand on all of them (I think on all). Most States have some sort of guaranty fund to protect the insured if a company goes belly up. You have to check with your State's Dept of Insurance for details.