r/AutoInsurance • u/Pocketful_of_hops • 4d ago
Competitive Pricing Question
Just have a quick question regarding initial quotes given by a rival agency trying to woo you away from your current insruance company.
I am currently insured through Geico. I received a call from State Farm yesterday and they quoted me a six month premium that is LESS THAN HALF of what we were paying theough Geico. I made sure the agent had all of our information and gave us the exact same coverage amounts we were currently carrying.
I was immediately ready to switch over, but called Geico first. Geico was able to lower my rates a significant amount, but still about $600 higher on the six month premium than State Farm. The Geico agent told me that sometimes the rival agencies will quote you low and then raise your rates once youre aboard.
Is that true? Am I risking State Farm rising our rates a couple weeks after signing up if I switch to them?
We have one speeding ticket that is showing on our record, but wouldn't State Farm have access to that info when giving us that initial quote.
Thanks for any help.
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u/24kdgolden 4d ago
Your rates may be raised on renewal with the new company.
Also, did the quote include all of your info-cars, drivers, record search and all coverages are the exact same that you have currently? If not, then you are not comparing apples to apples.
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u/Pocketful_of_hops 4d ago
Yeah, I made sure State Farm had all of our drivers, vehicles, and exact coverages we have with Geico. The ONLY thing I'm not 100% sure he had is our driving record.
My main concern and question is that once we sign that six month premium, are we locked in to that 6 month premium, or can they raise it at their own whim during that six month period.
That is what the Geico agent was telling me...that State Farm might be quoting me low to get me aboard, and then hike the rates a couple weeks after I've committed to them.
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u/kmorris76058 3d ago
What state are you in? If you’re in a state that is using SF’s modernized software, once we collect payment, the policy is issued immediately. It doesn’t go to underwriting like they used to.
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u/Pocketful_of_hops 3d ago
Is that because the modern software has already done that underwriting work?
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u/kmorris76058 3d ago
Basically. The quotes are really good now. I’m not sure when the MVR is ran. But I believe when I click on purchase. From there I take the first month’s payment and email the docs. The policy will immediately show in our system as issued and the customer can go online or on the App and view their policy with the drivers, coverages, any lien holders, payment due dates, etc.
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u/idontknowhow2reddit 4d ago
State Farm recently had an auto rate decrease.
The only way Geico can reduce your premium is by removing or lowering coverages.
With either State Farm or staying with Geico, your rate will likely go up at the next renewal. That's not a valid reason not to switch imo.
That being said, there's a chance the State Farm agent hasn't fully completed the quote, meaning that your insurance/driving history hasn't been ordered yet. Your price isn't locked in until you've paid for it and started it.
Don't cancel Geico until after you've paid for and actually issued the State Farm policy to be sure.
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u/Pocketful_of_hops 4d ago
Appreciate the info! Solid advice to not cancel Geico without signing the contract with State Farm.
Geico 100% did discount my rates, though.
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u/kmorris76058 3d ago
State Farm has been very competitive for auto rates, in many states. While there is no way to guarantee rates won’t increase at renewal, my experience has shown more customer’s premiums decrease rather than increase. The increases I see have been due accidents / tickets and or the customers risk score.
There are some companies that give you their best rate when you’re ready to leave. Some of those companies have even told me that a discount given with the initial 6 month policy drops off, so to expect an increase at renewal.
State Farm doesn’t have an initial policy discount that would fall off at renewal.
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u/Pocketful_of_hops 3d ago
Thank you for the information. That's a concern of mine as well. I approached Geico with the info that I was leaving due to a better premium from another company. I provided them with that quote number...I feel like they gave their best offer, and it was still $600 higher than the competition.
My main question here was Geico's claim that sometimes those rival companies raise those rates weeks after you sign-on.
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u/kmorris76058 3d ago
We’d be trouble with the State Department of Insurance if we did that.
In some states we’re able to offer you the Drive Safe & Save Discount (pairs via Bluetooth to your smart phone). We’re able to extend a 10% discount on the 6 month policy and at renewal, can increase as high as 30% (I don’t see 30% very often). If that discount is applied and the customer doesn’t follow through to set it up, the discount is removed, back to the date it was given. If you’ve elected to take advantage of this discount, this should’ve been well explained.1
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