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Having spent 6 years in Auto Insurance before moving to international medical I just want to share some thoughts on Auto Carriers giving credits/discounts/dividends to customers. /Thread
First, good for carriers who are seeing huge decreases in exposure acknowledging they would be stealing money from people who are hurting. Some are doing better at distributing those funds than others. /1
Companies like USAA, MetLife, Allstate are offering an immediate credit on April and May premiums (10-20% credit based on press releases from each). This decreases your bills immediately or gives you some money back (screenshots of these 3 attached). /2
The companies giving these immediate credits will likely continue this practice for duration of social distancing since their exposure is so much lower. They can do this to keep your business and still have high margins. Win win for everyone involved. /3
Then you have companies like Geico that are giving a discount on your next policy period. While the above carriers have committed to 2 months of rebates/credits/dividends of 15%-20%, Geico is committing to 15% over a 6 month period for returning customers. But... /4
We don’t know what Geico’s rate changes will be in the next set of renewals. It’s very possible the effective discount of their program is much less than 15%. Yeah, you may get a 15% discount, but you *might* see a base rate increase of 3-5% thus negating a good chunk of that /5
What happens when that 15% discount goes away? Your rates are going to jump ~15% when the discount goes away. You also only get this discount if you renew your policy. If you compare rates at the end of your policy period they’re going to look much cheaper... for 6 months. /6
We should all pay attention to what big companies, especially insurers, are doing right now. These companies practically mint money, what are they doing for you when you are helping them be more profitable by staying home? How are they thanking you? /7
Do you want to give your business to a company that realizes that and gives you the money you overpaid now? Or do you want to give your business to a company who will only thank you if you stay with them for another 6 months? /8
If you’re curious about what your carrier is doing DM or text me and I can look into it for you. /end
