It's very common for discount insurance places to have great rates your first year and a big increase the second or third year.
If you don't mind switching every year or two, you can keep hopping between them and keep those nice first year rates.
If you settle down into one of the big companies the rates aren't too bad after a while. My rates have only gone down over the years (cars and bikes) from stacking discounts like accident free 3 yrs, 5 yrs, 10 yrs etc. Remember accident free discounts only count if you don't switch companies. (it should be called Claim Free)
But it's still probably cheaper if you keep switching through the discount insurance companies so long as you're comfortable with that.
Just a word of caution on this advice.:chat:
The following information is factual and not to be confused with gossip...
Insurance companies must apply and ask the Insurance commissioner in each and every state to change their respected rates. It is not like nearly any other industry that can change their prices overnight. This process (Depending on complexity and state) takes on AVG 12-24 months. So the rates we pay today was asked for and approved by the State, is actually a year old.
Each and every claim turned in with a client that has been with any insurance company for less than six months is investigated by the fraud division that each insurance company has. As each renewal a person gets, the percentage of these that go through the fraud system is reduced. So the longer you are with an insurance company, the less likely a person is attempting to commit fraud on an insurance company. Not to mention those that are thought of as cut and dry, are not seen that way in the Insurance Industry. No two claims are alike...
This does not mean our claims will take any longer than allowed... Or that we are investigated in such a way that we even know they are investigating for fraud. They are not dumb, and they know what to look for. The bottom line is those that try to commit fraud on an insurance company usually do it in the first 24 months. Simple as that.
That said... Every Insurance company must follow the rules and laws of each State. So if we are to be made "Whole" again in 30 days we will be as long as no fraud is found. However if you are with the Insurance company say for 5+ years, we get taken care of say in the first day or few days (To then get the bike or what have you actually fixed) vs. potentially say 7-10 days for cases that fraud is suspected once the initial investigation has happened.
Now back to the costs... One insurance company vs. another is very much like one car lot vs. another. They all have their own idea of what works and what does not. For example. One insurance company may want to create a "Nitch" market for themselves and take a small loss on rates. Yet another may have tried, found they suck at it, raised their rates to compensate for the losses they now have on file with the state, and ask for a premium that the majority will not be willing to pay. But those that are do, and the insurance company will be happy to allow folks to have it with them at that rate. But what that has done is tell the majority of us that they do not want to be the INS comp of choice for that line of business. This and they can also just decide they do not want to be in that particular line of business, send us "Non-Renewal" notices 60 days in advance. And we go find new insurance. This has created the major differences in premium for the most part. Losses, choice and wants.
Additionally. The major expense to an Ins Comp is LIA.. Not the vehicle parts themselves. In Fact. Most insurance policies we have... Look at the cost breakdown. Most of the time, even with full coverage type policies, we see 35-45% of the cost to be LIA... Next most expensive is Collision.
A fender will not cost one insurance company more than the other. Yes they can and do negotiate with the shops to reduce the costs of course. Bigger shops have less cost because of volume for example. But what I am saying is general, is one Spyder finder is not going to cost one INS Comp $500 and another $125... So these cost are rather easy to compare.
Additionally. One Insurance Company will apply for a rate increase before anyone else will. Why? Because they have the losses to ask for it and do not want to loose more than a set dollar amount of money. For example. Farmers (Foremost) made money in 2009 and had two rate increases (Applied for once in 2007-2008, staggered them). Allstate did not and lost $1.2 Billion dollars in 2009. But they did apply for a rate increase in 2010 that will go into effect in 2011.
Now... This means that Farmers increased a total of 8% and Allstate is getting a 17% increase. So one year Allstate looks fantastic, and Farmers looks horrible! A year or two later Allstate cost more than Farmers... It is simply a choice of doing business a certain way, collecting a market-share, and they leap frog each other back and forth.
What I am basically saying is this. If you stay with one Insurance Company for say 10+ years... And add up all the premiums... Then add up all the premiums for three other companies that also offered the very same exact product... Most of the time the difference paid is negligible.
Not to mention companies like State Farm offer a "Get out of rate increase" cards for free, if in the event there is a major loss. Other companies have recently added this feature but for a fee.
Now for my $.02... We need to shop. We need to keep our costs down. But I speak from lets say... Inside knowledge on how it really works. It is best to stay with one Insurance Company that you like and trust, than it is to hop around to just save $100 every other year.
Lastly... Insurance is a recycling business. I like to think of it as the original Recycling program of America. It does not have 100,000 brand new every week, never had insurance in their life, type business. It is simply recycling old clients from one company to another. Only about 1% of business written is for brand new to the insurance industry.
While this was all a lot of info that I bet most will never read, I hope it helps "Inform" someone of another way to see the Insurance Industry :2thumbs::spyder2:
P.S. All of this information is free and on the web at all the States Insurance Commissioners Website. Nothing is secret. We just have to do a lot of reading to find it
