So why do different Insurance companies have such radically different premiums?

[Event]

This is bothered me for a while... Some companies quoted me at $1200 or so per 6 months (with inferior 25k/50k BI coverage)... my current company (GEICO) is giving me insurance for $600 per 6 months (100k/300k). My coverage is lapsing at the end of the month so I figured why not shop around again. Another company (to remain nameless) quoted me $2000 per 6 months!

So I ask you, GTP, where do these wildly variant numbers come from? Yes, I'm a 23y/o single male, but I've never gotten a ticket, never been in a wreck, been driving since 16. Is Geico the only company acknowledging this? Or am I going to have an inferior time if I ever need to make a claim?

and these quotes were with similar coverages with glass, deductibles, and roadside assistance ans such)

 

[Casio]

Here it really depends on the quality of the server provided. I'm with what's probably a "premium" insurance company. But when I call them I've never been on hold, never spoken to a call centre from Bombay, always had everything worked out really quickly. The other week when I had to take my car in for repairs they organised me a free chauffeur driven car to anywhere I wanted, and when it's ready and fixed they'll organise it to pick me up and take me there.

Also, I'm not sure if over their is like here, but until your 25 all insurance companies think you're going to kill someone every time you leave your house. As soon as you're over 25 premiums come down a heap.

 

[NapoleonMikey]

Oh how I feel your pain. I'm with Geico myself and pay ~$1400 for 6 months at 20 years old. I cant really complain about that price seeing as when I first came off my parents insurance it was around ~$2000. Ive been really thinking of looking at some of these much smaller company's that offer around $60/month such as the general, but I just don't want to get into an accident and have someone give me a hard time to get my car fixed.

And Casio that is the way it is in the U.S. as well. Once your under 25 your magically a better driver.

This is how I felt when I first got my own insurance. AUP WARNING.



I want my box of driving talent.

 

[Jondot]

My guess is that they're all geared to cater to certain groups moreso than others. The company I'm with gave me a quote of £1700/year (compared to quotes of anything up to £20,000 from other companies, unbelievably) because I'm a youngster and their business model was designed simply to cater to new drivers. Apparently it wasn't a very good business plan as they're now in administration, but still.

Similarly, you've also got companies like SAGA that only insure you if you're over 50, and the horrendously advertised Sheilas Wheels who only take paying customers equipped with breasts. It's all about finding who happens to be tailored to you, I suppose. Or hoping you'll somehow get through a loophole and find a cheap quote with one of the respectable companies.

That's the other thing, of course (and I'm sure Famine will pop in with an explanation of how insurance companies work), it's all a complicated system to give appropriate people appropriate quotes. And of course it screws up sometimes - every single quote I've done recently has said it's £500 cheaper for me, as a person with a car that has locks designed in the early 90s and who lives in the middle of Crime City UK, to park my car on the street rather than the driveway or secure residential parking. The joys of working off statistics, I suppose.

 

[Omnis]

It's all about risk groups dawg!

 

[Jedi2016]

I had that happen a few years back. I'd been with Geico for years, and then out of the blue they jacked up my rate by about 50%. So I dropped them like a bad habit and went with Progressive. My coverage through Progressive is about 10-15% higher (in terms of dollar amounts), and it costs me less than half what Geico was asking. "You could pay 50% or more with Geico!! Call today!!"

Geico called me a couple months later when they stopped getting checks from me. When they heard what I was paying, they thanked me for my time and I haven't heard from them since.

I've also noticed that, although you may have a policy through one of the big companies, the actual insurance itself seems to be coming from somewhere else.. in my case, it's some Texas liability company that I've never heard of (it's on my insurance card and my statement). It's like they use Progressive as a go-between, like a franchise or something. Which may explain the different rates to some degree, depending on what company is actually providing the coverage and how much they need the business and/or like their customers. Either way, I haven't had any problems.

 

[Kylehnat]

Every insurance company claims to have the lowest rates, so all but one of them are lying . On-line quotes are notoriously inaccurate, and usually higher than what you'll actually pay (unless you're lying when you fill out the form). When I did online quotes for Farmers, Allstate, and State Farm last year, they were all within 10% of each other, and about 15% higher than what I ended up paying. When you drill down through the BS and compare apples-to-apples coverage, insurance companies shouldn't be too far apart from each other. If one company is way below all the others, I'd avoid it, quite honestly.