More actuarial sorcery

[KrazyHorse]

When I first got a car 2.5 years ago I went with Geico auto insurance. After a year with them, I requested an updated quote both from them and from Progressive insurance. The Progressive quote was 20% lower, so I went with Progressive for the next year. After a year with Progressive I requested an updated quote from Progressive, Geico and Esurance. Progressive was still 10% lower than Geico, but Esurance was 15% lower than Progressive, so I went with Esurance.

My 6 month renewal with Esurance was coming up, so I again requested quotes from all three companies. Esurance and Progressive had virtually identical quotes. Geico's quote was 35% lower than either of those

What. The. ****.

I obviously switched back to Geico.

Note that all these quotes were for equal coverage with the same vehicles and drivers (they changed over time, but each time I requested a new quote I did so for equal coverages, drivers and vehicles between the different insurance companies)

I'm now paying 120$ a month insurance for 2 people and 2 cars in Baltimore City, one of the worse places in the US you can drive. I was previously paying 200$ a month insurance for 1 person and 1 car. Some of this difference is obviously attributable to getting older, having a longer US driving record, getting married and changing zip codes. But it appears that when you're signed up with a company they don't drop your rates as quickly as if you switch companies. I'm now wondering what I'd be paying today if I'd simply stuck with Geico the whole time?

[Kuciwalker]

I'd attribute the difference to the marketing department, not their actuaries.

[KrazyHorse]

The margins on auto insurance are relatively low. Between -5% and +10%.

If the difference is marketing then they really are relying on customer loyalty/stupidity to a greater extent than I would have believed possible.

[Kuciwalker]

Never underestimate the power of human stupidity

[KrazyHorse]

I also find it hard to believe that I was a 3-4 times greater risk 2.5 years ago.

[Kuciwalker]

Actually, I think there is a drop that steep (between the two age groups).

[Provost Harrison]

I've been chopping and changing insurance companies for years. It changed depending on how long I had been driving, on what kind of car I had (some insurers seem to prefer some cars to others) and then upon where I live, whereas the ones which was cheap when I was in Hull because extortionate and vice versa. I really don't know how they figure it out. Now I have a car that is more than twice as powerful as my first one and yet it costs me less to insure than that...hmmm...

[Aeson]

I think it's like "rewards" plans, interest grace periods, mail in rebates, free trials, ect...

Eventually they just hope to confuse enough people as to what would be most efficient. By doing so keep they keep enough suckers overpaying, and don't have to worry so much about competing on merit. Consumers who know what they're doing and are willing to take the time to run the gauntlet can get very good deals.

[Arrian]

My company overhauled its auto rates last year and, for the first time ever, beat the snot out of the other options. So we switched (payroll deduct is nice too). I'm paying $1200/year for two cars & drivers.

In the past, I would periodically check around, including getting a quote from my employer, and it was never close. It helps we both crossed 29 years of age, which IIRC is one of those magic numbers.

-Arrian

[Krill]

In the past, I would periodically check around, including getting a quote from my employer, and it was never close. It helps we both crossed 29 years of age, which IIRC is one of those magic numbers.

Depends from which side of that age you're looking at the number.

Frankly the idea that I'll be 20 next year scares me.

[Arrian]

Heh, I meant from an auto insurance point of view.

Awww, you're gonna be twenty. How cute. I hit thirty last month. Time flies, grasshopper.

-Arrian

[Dis]

hmm, I've stuck with GEICO for over 10 years now. perhaps I should switch.

[Dauphin]

Originally posted by Krill

It helps we both crossed 29 years of age, which IIRC is one of those magic numbers.

Depends from which side of that age you're looking at the number.

I may be wrong, but you can only cross the age in one direction.

[Krill]

Yeah, you can only cross it in one direction (physicists can correct me on that, but I never pay attention to physicists anyway...). But you can look at the age 29 and all that the age entails from the perspective of an 18 year old or of a 40 year old...

[Zkribbler]

Originally posted by Kuciwalker
I'd attribute the difference to the marketing department, not their actuaries.

If Marketing is running these companies, it's time to sell them short.