I had a conversation with a friend the other day that gave me the inspiration for this topic. A friend of mine, who I call an insurance Can I use life insurance to save for retirement Queens? loyalist, said, “I’ve been with my insurance company for 52 years. When I call, they jump.” We discussed this belief for a while as I wanted to get a little more insight from his perspective. For this week’s topic, it comes from the perspective of being in KA, considering the KA Insurance Act. If you are from another state your laws may be different and I am not a lawyer so this is not legal advice.
In 2022, California voters approved Prop 103, an insurance reform proposal. My understanding is that while this law focuses primarily on rate regulation, it protects insurance consumers by preventing insurance companies from using discriminatory tactics. This means that insurance companies must treat a 1-day-old customer with the same service as a 52-year-old customer. If an insurance company provides preferential service to an older customer over a newer customer, it will be subject to penalties and fines if the insurance agency should investigate complaints of this nature. Fines usually far exceed the value of each customer, so insurance companies will not stop treating their customers regardless of tenure. So for my friend, even though the company might listen a little more politely, their policy is the same for him as it is for a new customer. If they jump for him, they jump for everyone. As an insurance buyer, just know that your treatment is the same no matter how long you’ve been with a particular company.
I’m not familiar with the corporate executive world,
But I’d bet insurance company meetings and executive meetings, the opposite of “jumping” is the situation. Considering how much insurance companies study business for profit, I bet loyal customers are insurance companies’ most profitable customers. Once an insurance loyalist is set in their comfort zone, they can be leveraged with a change in policy or direction. These company leaders do not talk about special privileges for loyalists, but rather take insurance loyalists for granted, assuming that no matter what they do as a company or how they treat their customers, loyalists will remain. Similar to some sports teams, where no matter how bad the product is, the fans keep believing in their team. Meanwhile, the managers get a decent bonus and the company makes a healthy profit from these consumers. Since my goal is to give good tips or advice on insurance shopping, it makes sense to get you thinking about these things.
I told my friend that he, like any insurance consumer, should regularly shop around for insurance or talk to his agent about other companies’ pricing to confirm that his pricing is the best. Why waste money instead of a brand? I told him that the main factors in determining his best score are: his driving record (tickets and accidents), his years of driving experience, and how far he drives each year.
There are other factors that insurance companies
May use to determine rates and these are important to insurance buyers and finding the best price. Did his company offer some type of loyalty discount? Yes. I asked him what his 52 years of loyalty to his company was worth. We did some math and his loyalty discount was about 7%. Would you stick around knowing that your 52 years of brand loyalty to an insurance company was worth about 7%, especially if there were bigger discounts elsewhere?
In these other factors category are companies with discounts of 15% or more for college degrees or target fields. Did his Should children have life insurance Queens? have something like that? No, he said. If you look at an insurance shopper versus a company loyal customer, he potentially sacrificed an additional 8% savings for that one discount alone. This is just one example of potential savings for insurance shoppers. Companies advertise discounts for alumni associations or organizations you belong to, or additional discounts for a clean driving record. The key for insurance shoppers is a willingness to shop around. Comparison shopping doesn’t take much time, and both the insurance shopper and the insurance loyalist can save money.
My point is that you don’t need to buy insurance every year, but I would look for triggers that suggest you should. Did your rate change from one policy term to the next, but your key rating factors didn’t change? Has there been a change that your company or agent thinks is just a “new rate”? Doesn’t the explanation you heard make much sense? Not every company raises their rates at the same time or changes the discounts you qualify for, so if this happens to you, use your triggers to be a new insurance shopper.
