Comments on: Insurance Company Bait-and-Switch

By: Derek Chamberlain

Derek Chamberlain — Thu, 30 Apr 2015 22:55:20 +0000

That is BS! I can’t believe they didn’t even use google streetview to perform some type of due diligence before giving you the quote.

By: Oleg S.

Oleg S. — Wed, 29 Apr 2015 12:26:56 +0000

Allstate gave me a homeowners quote of $547.90. Thinking this was a good price, I signed up because this was a good rate compared to other quotes I was getting. 2 weeks into my coverage they emailed me telling me that they need to verify my square footage. After verifying my square footage, I was assured that my rate would not go up. 2 days after that, I get an email that they need to add $138.44 to my premium because I have an attached garage. This is madness! I WILL NOT be buying Allstate insurance for a long time.

Allstate is basically making me bite the bullet because either they did not do their due diligence or because they think they can.

By: Derek Chamberlain

Derek Chamberlain — Tue, 01 Jul 2014 15:03:16 +0000

Kevin,

Yes – I’m pretty sure that’s what happened here. The only thing is, when calling around to the other companies, they are all substantially higher than last year. I wonder why…

By: Kevin H @ Growing Family Benefits

Kevin H @ Growing Family Benefits — Mon, 30 Jun 2014 20:38:42 +0000

You see this marketing tactic in many ndustries: lower prices offered to new customers only. They take a loss on the first few months or a year in order to lower new customer acquisition costs. They expect a small percentage of people will game the approach and leave when the real pricing kicks in, and a larger percentage will stick around.

Credit cards try the same math when they offer zero interest balance transfers. Progressive uses data mining very heavily and probably knows the percentages cold.

By: Derek Chamberlain

Derek Chamberlain — Mon, 16 Jun 2014 13:41:07 +0000

Jon,

I think you are 100% correct. I made the switch initially and saved about $475/year for one or two hours of work. It is a shame that companies try this kind of BS, but I cannot say that I am surprised. Most companies will try just about whatever they can to make more money in the short term at the expense of long term (and customer service).

By: Jon @ Money Smart Guides

Jon @ Money Smart Guides — Mon, 16 Jun 2014 13:18:51 +0000

That price increase is a joke. Sadly though, I think it is going to become the norm going forward. People are getting smart to shop around for insurance coverage, so many more companies will “eat” a low premium for a year then jack it up the next year. Most will probably just accept it and stay with them and not go through the hassle of switching again.

As much as I preach to my readers to find the lowest cost insurance, I am willing to pay more if the company is treating me right – in other words, not jacking up my rate every year.

By: Derek Chamberlain

Derek Chamberlain — Mon, 16 Jun 2014 11:18:35 +0000

Sher,

Yes, my business will definitely be going elsewhere. Last time I checked, Geico was the second best on rates, so I will go to them first to check out their prices.

By: Derek Chamberlain

Derek Chamberlain — Mon, 16 Jun 2014 11:17:06 +0000

Michelle,

I understand a normal 2%-4% increase each year because of inflation, but 36% is just insane 🙂 It really is bait-and-switch type of pricing.

By: Sher@KNSFinancial

Sher@KNSFinancial — Sun, 15 Jun 2014 01:12:46 +0000

Unbelievable! I hope you have luck finding another insurance company with a better price. I hate that companies like this expect you to take this kind of dishonesty lying down. I thank God we have the opportunity to choose amongst competitors.

By: Michelle

Michelle — Sat, 14 Jun 2014 18:15:23 +0000

My sister is always telling me that her home owner’s insurance is constantly rising-for no reason at all. All of this factors into her bottom line when it comes to paying the mortgage.