A few weeks back, I wrote a column about the mafia tactics of the insurance . . . mafia. Which I refer to as such because it works almost exactly like the families portrayed in Mario Puzo’s Godfather series. They “make you an offer you can’t refuse” – regarding “protection” which you’d better pay for, if you know what’s good for you.
The main difference between this legal mafia and the not-legal mafia is that the insurance mafia uses the government to make you an offer you can’t refuse – the “protection” offered being mandated by law.
My state, Virginia, generously allows people to not pay the mafia by paying the government instead – with the additional downside of no “protection” in return for the annually due $500 Uninsured Motorist Fee. Payment allows you to drive without insurance legally – an interesting thing in view of the government’s feigned attitude toward people who drive without insurance. The risk to other drivers apparently isn’t the issue. The paying of money, is.
Especially if you don’t pay it. The fines – and penalties – for that are serious.
Anyhow, I’d been paying GEICO for going on 20 years. During all the time I’ve been with GEICO I’d never filed a claim nor had one filed against me. In other words, I have cost GEICO nothing – but have paid them a lot. I probably would have continued to pay them – had they not tried to squeeze me one more time.
When I got my latest policy renewal, I noticed a substantial increase in the cost of my coverage. It jumped from about $170 for six months to more than $190. This puzzled me, initially, because I knew I had not filed any claims nor had any filed against me; had not even had a seatbelt ticket they could use as a pretext against me. Also, the vehicle I had covered with them is my 2002 Nissan pick-up, not exactly a heavy liability potential there.
So I called to try to find out what was up and felt pretty confident some kind of mistake had been made or – at least – some accommodation could be made. I figured I was in a strong position because I am probably the perfect “customer” – if such a word can be used in any context where you’re forced to be a “customer.” I’m a middle-aged guy with no kids and an accident-free record going back decades. I’ve established that I’m extremely unlikely to cost them anything – ever.
Meanwhile they’re making book on me.
How much book?
The wanted just shy of $200 for six months – about $400 annually. This is what GEICO thinks is a reasonable sum to charge for a state-minimum, liability-only policy on a 20-year-old truck driven by a guy who has never filed a claim or cost them a cent in loss.
Were I to continue paying this I’d have lost a sum equivalent to the current fair market value of my truck in not too-many-years-from-now. This is not counting what I have already paid GEICO for this “coverage,” which is roughly in the ballpark of $5,100 – more than what my truck is worth right now. Add ’em both together and I could buy myself a new (used) truck.
It begins to chafe – and so, I called.
The woman I got told me the increase was due to my state raising the mandatory minimum coverage amounts it forces all car owners to buy – unless of course they hand over that $500 “fee” to the government to be granted the privilege to drive around with no coverage whatsoever – leaving you liable for whatever damage you do to someone else’s property. As it should be in all cases, by the way. But it gives the lie to this line about government imposing coverage requirements so as to deal with the “problem” of people driving around without insurance.
I replied that this was of no relevance in my case because I’ve not filed a claim nor had one filed against me; my record of claim-free driving going back decades, on the other hand, is relevant. I added that while the proposed premium hike wasn’t huge, I found it obnoxious in principle and expected it to be removed. She would not budge. It didn’t matter that I’d not given any reason to believe I would be costing them any money – as opposed to being expected to pay them more of it. The new premium wasn’t negotiable. And it’s due in two weeks (early February).
I told her I’d be shopping around – which didn’t faze her, either. Now I’m glad it didn’t.
As it turned out, I was able to buy exactly the same coverage from another company – technically, via an insurance broker – for less than half what GEICO was extorting from me. This is a policy I would have freely bought, had I been aware of it, because the cost of the coverage – state liability minimums – was low enough to justify paying it. While I judge my risk of being at-fault in an accident (or even having an accident, at all) to be slim-to-nil (backed up by my decades of accident-free driving) there is always that chance and paying $126 or so per year for just-in-case seems . . . reasonable to me.
I’m not spending almost as much on “coverage” as my truck is worth.
It was wonderful to get the increasingly desperate-sounding mail (and email) from GEICO, wondering why I had not sent them any money. I just called to tell them why, exactly. All of a sudden, they wanted to talk. But I no longer did.
I still don’t like being made to be anyone’s “customer.” But I can vouch for the fact that it pays to shop around – and in particular, to talk with an insurance broker rather than just one insurance company. There is still the element of coercion, but there’s also enough competition for your “business” to make a difference.
. . .
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