Today my wife informed me that our yearly bill for AARP (Hartford) auto insurance had arrived for the two vehicles we insure. I guess I have the typical coverage package for these vehicles in New York state. I have $500 deductible collision coverage on each vehicle, although the cars are 2002 and 2006 model year cars (completely paid for). The total for next year's insurance was $1185, up from $1147 last year.
I started looking how increasing the collision deductible for these cars might reduce my premium, as I've never has an accident with either them, and as I feel I can afford $1000 to fix either car if I do have an accident that's my fault.
Included with the bill was a chart that showed how much I could save, percentage-wise, by increasing the collision deductible, but the chart was based on $200 deductible, not the $500 deductible I currently have. So I'd have to call to get a real quote for increasing collision deductible. I really didn't make any sort of a decision to increase the collision deductible, but it prompted me to look more into the sheaf of information provided with the renewal package.
Buried deep within the package was a one-half page blurb about the fact that "in my state", apparently there exists a new policy pricing plan, and that I could call for a quote for my auto insurance under the new policy pricing. One of the things the notice said was that a new credit and driving check would be required to do this. Also, if you accept the new quote, they need to get you to sign for the new policy. So the new credit and driving check could have been seen as a deterrent for one to investigate the new pricing plan. In essence, no fanfare, no sell job, and a mild potential deterrent to get you to investigate. Just about one half a page of text with a phone number. So I gave it a try.
Long story short, I got a quote for $874 a year for both vehicles with no change in the coverage compared with the plan I needed to renew. That's a savings of $311 per year. So a phone call with an annoying eight minute wait for credit and driving checks produced a 26% discount for my auto insurance. Of course, I accepted it. The interesting thing is that to get this new plan, I have to wait for a new policy in the mail to sign and return, and I will have a new policy number and new proof of insurance cards.
So I started thinking. I'd have simply kept paying the higher premium if I hadn't read the buried fine print about a new pricing plan and hadn't taken the time to make the phone call to learn more. Why, for an obviously computer generated bill, wouldn't the insurance company have just given me the discount I probably already qualified for? And why did the buried fine print say that there was a new pricing plan "in my state"?
I asked a few pointed questions of the person who gave me the new quote. I asked "Why is this a new plan?" The answer I got was: "You have been with AARP (Hartford) since 2009 and since that time a new pricing plan was become available in New York state."
So at renewal time, I would only be offered the old more expensive plan, and I would be notified, in a inconspicuous buried message in the renewal package, of a new plan, with new pricing. No where in that message was any hint that I could possibly save 26%.
Reading between the lines, here is what I think happened: New York State (and probably other states) told insurance companies that they must take into account certain new actuarial facts more beneficial to clients when pricing auto insurance policies, and that they had to offer these new policies to their new clients, and they had to tell their old clients of the availability of the newly priced policies. But the insurance companies apparently were under no obligation to change the existing policies in force, or to automatically offer the new less expensive policies at renewal time. I think the insurance companies simply had an obligation to notify existing clients that new pricing guidelines for auto insurance policies are available.
I think what they chose to do was to bury the information about the more favorable pricing plan deeply in renewal packages, and to dissuade the inquiries about the new plan with a mild deterrent, in the hope that clients would simply renew the old, more profitable plan.
So the moral of this story: If you receive a renewal notice for you auto insurance, look through the renewal package for an inconspicuous message that a new pricing plan is available "in your state". Make the phone call, and hopefully get a good discount on your auto insurance.