We’re all very busy these days. I know I am. So it helps to feel that there are companies that we can trust to provide good service at a good price. After all, who has the time to shop around for the best car insurance, phone plan, Internet service, doctor, mechanic, stock broker, accountant, lawyer, and so forth on a yearly basis?
Well, I’ve got bad news for all of us: if you trust that you’re getting the best rates possible, you’ll probably end up paying too much, even far too much.
Case in point: for the last 18 years I’ve used USAA as my insurance provider. They’ve always provided great service. And for a long time their rates were much lower than those for any other insurance provider.
In recent years I’ve noticed my rates climbing higher and higher. Each year I’d call them, and see what they could do about these ever higher rates, which was never much. A few years into this ascent I checked with a few other insurance providers, and USAA was still lower, but not by nearly as much as they had been.
Well, I’ve got to make some major changes in my auto policy. So today I called Progressive. And they came in nearly $1,200 per year lower than USAA. Even factoring in USAA’s roughly $100 per year “dividend,” we’re talking a difference of over $1,000 per year.
I then checked my homeowners, and Progressive’s partner came in over $200 lower (and the gap will widen to $350 come the first of April).
I was shocked. (I’m still in shock.) I called USAA to see what they had to say.
They answered the phone with, “Thank you for trusting USAA.”
My response, “Well, I did until today. And now I wish I hadn’t.”
They “did what they could” for me, and found a savings of $150 off their current rates. Not nearly enough.
Now, I don’t know if anyone at USAA is getting rich off of the steady increase in their rates. Technically they’re a non-profit owned by their policy holders. But clearly at some point along the way they lost control of their costs, a basic failure of management. Knowing how much their members/customers trusted them, they probably didn’t feel much pressure to remain lean. In other words, though I don’t think they’re crooks, I do think they’re mismanaged.
The end result is that in recent years I’ve been spending about $1,200 more a year than I should have been. Because I trusted them to keep their costs low, so they could keep my rates low. And I should not have.
I wish I’d checked other companies’ rates sooner, and urge everyone to do the same.