Reader Question: Insurance Rip-Off?

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Here’s the latest reader question, along with my reply!

N asks: My Geico insurance premium just increased dramatically.  I have a 2007 Accord and in the 22 years I’ve lived here in Maine have never had an accident. I’m considering letting the insurance lapse. My car isn’t worth much except to me (Ive never had collusion) and I have medical coverage if that ever became necessary. I may take a chance and just let it go … it feels like a scam.  I’ve never had AAA and just once had to pay to have my car towed.  I’m aware it’s a legal requirement but still. What do you think?

My reply: I had Geico, too – and like you, for no legitimate reason, they summarily raised my premium by a substantial amount last year. I had never filed a claim or had one filed against me in the 20-plus years I paid them for “coverage” I never used. It amounted to many thousands of dollars. This obnoxiousness roused me to seek a different “family” of the mafia, as I style insurance – because we’re forced to buy it by threats of  violent repercussions if we don’t (and continue to drive). It says a lot about the nature of the exchange, doesn’t it? When you’re forced to buy something, it is almost always something you don’t need. And when they can force you to buy it, then it’s a sure bet it’s going to cost more, too.

Some will say – the usual objection – that if people weren’t compelled to buy insurance, there’d be dangerous deadbeats out there who’d drive without insurance. It is exactly the same idiot argument that is used to push for gun control; i.e., that if guns were outlawed, then “gun violence” would disappear or be much less. As in Chicago, for instance.

Gun control  and forced insurance “covering” punish people for harms they haven’t caused – because someone fears they might.  It dismisses out of hand the possibility that they might also be responsible – and not cause harm – and if they do, that they would pay for any damage caused. This is a vile kind of pre-emptive assuming of irresponsibility rather than a presumption of responsibility until facts say otherwise.

I was lucky in that I found a company – Erie – that offered me a policy that met the minimum requirement in my state for liability-only coverage for a sum I would have paid freely (about $120 annually). I then told Geico – which had been charging me several times that sum – to take a hike.

I recommend you try doing what I did first. In the good old days – which were just that – you could “get away” with not having insurance because everything wasn’t computer-connected. Nowadays, it is. They – the DMV – run regular checks and if they find out your insurance has lapsed (Geico may give them a call) then you’ll be slammed with heavy fines, possible  loss of your driving “privileges” and so on.

Hopefully, you will be able to find a better “family” to be forced to buy “coverage” from!

. . . .

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5 COMMENTS

  1. GEICO is one of the most expensive companies. Try State Farm or, as Eric suggested, Eerie. Never let your insurance lapse….’cause when you try to get insurance again, they will NAIL you good on the new premium (Like: As bad as if you had a DUI)- and the good companies will flat-out reject you.

    • I was a fomer insurance agent, and I’ve Said it before, and I’ll say it again….

      Every two years, at least, if not yearly, ALWAYS call/email/surf the web, or however you chose to do it, but shop around for current rates from at least 3 companies. Or do 10 companies, you will be amazed at what you find.

      And make sure to do an “Apple to Apple ” comparison, and do not compare different coverages for different amounts, or you’ll think what a ripoff/what a deal when its not the same as what you have or need.

      The money you can possibly save by rate comparison may be astounding.

      New companies are admitted to your state every year to do business, and are allowed to deviate, or lower, their rates from normal rates by the Insurance Commissioners office in order to build business. Among a multitude of other reasons.

      And if not a greater deal you’ll find elsewhere, then at least you are secure in the knowledge you’re getting as much for your preminum as you can, coveragewise.

      Good luck and educate yourself and ask questions!!!!

  2. Meanwhile next door in New Hampshire, we don’t have mandatory liability insurance. It’s still a good idea, because there are uninsured drivers on our roads–mostly from Mass and Maine, where the insurance is mandatory.

    Our rates are cheaper, though. There’s actual competition when the product isn’t mandatory.

  3. Exactly RK,
    Here in Taxachusetts insurance is compulsory, yet one of the compulsory items is “uninsured driver” WTF!
    Big Brother is definitely keeping an eye on your insurance though, I once got a nastygram from the DMV because my saaaaafety inspection was overdue – we had been away for awhile – and my registration would be suspended if I didn’t get it done within thirty days. The Eye of Sauron technology entraps us all.

  4. Some will say – the usual objection – that if people weren’t compelled to buy insurance, there’d be dangerous deadbeats out there who’d drive without insurance.

    So that line item on my coverage that says “not insured/under insured” isn’t needed right?

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