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Fairfax Underground
Welcome to Fairfax Underground, a project site designed to improve communication among residents of Fairfax County, VA. Feel free to post anything Northern Virginia residents would find interesting.
Welcome to Fairfax Underground, a project site designed to improve communication among residents of Fairfax County, VA. Feel free to post anything Northern Virginia residents would find interesting.
Why your auto insurance might be high...
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Date: May 30, 2016 04:51PM
A couple of interesting blurbs from Consumer Reports:
MYTH: You Get a Loyalty Discount for Staying With the Same Company a Long Time
HIDDEN TRUTH: You might actually be charged a loyalty penalty
Many companies, including car insurers, reward their most loyal customers with discounts or other incentives. It’s a smart business model. But our study found that while some insurers give a sizable discount, others give a small one, and still others offer nothing at all. Some insurers even salute your allegiance with a price hike.
It’s common for consumers to stay with the same insurance company for a long time. Fifty-three percent of Consumer Reports subscribers have stayed put for 15 years or more, according to our most recent survey. But that kind of complacency can cost you. In Washington State, for example, seven of 15 insurers didn’t give a discount to our married couples who had been steadfast customers for at least 15 years, including Amica Mutual and Farmers.
Trusted name brands were no guarantee of anything: In Washington, State Farm Fire & Casualty offered no discount; State Farm Mutual provided $182, or 15 percent in savings. Geico General and Geico Government Employees didn’t offer a discount; Geico Casualty actually charged a $689 loyalty penalty, or 17 percent.
Discounts also varied by state. USAA offered a nice savings of $197 in Kentucky but a meager $14 loyalty discount in Washington, nothing in Colorado and Michigan, and a $28 loyalty penalty in New York.
Geico Casualty gave us whiplash with its $3,267 loyalty penalty in New Jersey and its $888 discount just across the state line in New York for longtime customers. State Farm Mutual consistently provided discounts of a couple of dollars up to a few hundred dollars; Allstate Fire and Casualty and Allstate Property & Casualty tended to prefer penalties.
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How your credit score raises your premium
Your score is used to measure your creditworthiness—the likelihood that you’ll pay back a loan or credit-card debt. But you might not know that car insurers are also rifling through your credit files to do something completely different: to predict the odds that you’ll file a claim. And if they think that your credit isn’t up to their highest standard, they will charge you more, even if you have never had an accident, our price data show.
Cherry-picking about 30 of almost 130 elements in a credit report, each insurer creates a proprietary score that’s very different from the FICO score you might be familiar with, so that one can’t be used to guess the other reliably.
The increase in your premium can be significant. Our single drivers who had merely good scores paid $68 to $526 more per year, on average, than similar drivers with the best scores, depending on the state they called home.
And your credit score could have more of an impact on your premium price than any other factor. For our single drivers in Kansas, for instance, one moving violation would increase their premium by $122 per year, on average. But a score that was considered just good would boost it by $233, even if they had a flawless driving record. A poor credit score could add $1,301 to their premium, on average.
MYTH: You Get a Loyalty Discount for Staying With the Same Company a Long Time
HIDDEN TRUTH: You might actually be charged a loyalty penalty
Many companies, including car insurers, reward their most loyal customers with discounts or other incentives. It’s a smart business model. But our study found that while some insurers give a sizable discount, others give a small one, and still others offer nothing at all. Some insurers even salute your allegiance with a price hike.
It’s common for consumers to stay with the same insurance company for a long time. Fifty-three percent of Consumer Reports subscribers have stayed put for 15 years or more, according to our most recent survey. But that kind of complacency can cost you. In Washington State, for example, seven of 15 insurers didn’t give a discount to our married couples who had been steadfast customers for at least 15 years, including Amica Mutual and Farmers.
Trusted name brands were no guarantee of anything: In Washington, State Farm Fire & Casualty offered no discount; State Farm Mutual provided $182, or 15 percent in savings. Geico General and Geico Government Employees didn’t offer a discount; Geico Casualty actually charged a $689 loyalty penalty, or 17 percent.
Discounts also varied by state. USAA offered a nice savings of $197 in Kentucky but a meager $14 loyalty discount in Washington, nothing in Colorado and Michigan, and a $28 loyalty penalty in New York.
Geico Casualty gave us whiplash with its $3,267 loyalty penalty in New Jersey and its $888 discount just across the state line in New York for longtime customers. State Farm Mutual consistently provided discounts of a couple of dollars up to a few hundred dollars; Allstate Fire and Casualty and Allstate Property & Casualty tended to prefer penalties.
----------------------------
How your credit score raises your premium
Your score is used to measure your creditworthiness—the likelihood that you’ll pay back a loan or credit-card debt. But you might not know that car insurers are also rifling through your credit files to do something completely different: to predict the odds that you’ll file a claim. And if they think that your credit isn’t up to their highest standard, they will charge you more, even if you have never had an accident, our price data show.
Cherry-picking about 30 of almost 130 elements in a credit report, each insurer creates a proprietary score that’s very different from the FICO score you might be familiar with, so that one can’t be used to guess the other reliably.
The increase in your premium can be significant. Our single drivers who had merely good scores paid $68 to $526 more per year, on average, than similar drivers with the best scores, depending on the state they called home.
And your credit score could have more of an impact on your premium price than any other factor. For our single drivers in Kansas, for instance, one moving violation would increase their premium by $122 per year, on average. But a score that was considered just good would boost it by $233, even if they had a flawless driving record. A poor credit score could add $1,301 to their premium, on average.