Archives For Insurance

I see ads all the time for that say stuff like:

“Drivers who switched from State Farm to Allstate saved an average of $362 a year.”

This reminds me of the time when I called my insurance agent to ask a question about our policy and she talked me into a different plan with the same company because it would save us lots of money. So, I went from a one-year policy to a six-month policy. The premium a little over half what I was previously paying. All was great until the 6-month renewal, which increased a lot. I wasn’t happy.

Anyway, back to the ad…

Two things to consider:

1. It’s only savings if the two policies are the same. Insurance companies can and will shave off benefits and call the reduced premium “savings.” Perhaps the reduced coverage is okay. It’s up to you. Just make sure you know what you are getting.

2. Don’t expect the same low premium upon renewal (think about the really low rates for first time subscribers to newspapers. The rate is incredibly low and then incredibly expensive upon renewal). It’s a pain to change insurance companies. Insurance companies know this. That’s why they tell you how much you can save by switching. But…they don’t make money if they are charging a lot less than everyone else.

In another month or so, our household will have our second teenage boy licensed driver. Ugh!

Pray for me.

I received our flood insurance renewal. It’s jumping from $365 to $412. That’s a 12.8% increase.


Happy Friday, everyone!

I received our six-month auto insurnace renewal yesterday. The premium is going up 9.79%! We added our oldest son last March. Our rates basically doubled. They didn’t change much at our July 2012 renewal. Yesterday’s renewal came as quite a shock. We haven’t had any issues. So, I called our provider yesterday and one of the first things he told me was, “I know rates have gone up in Texas.”

This is the breakdown of our rate increase (click on the graphic to see a larger view):

This is what irks me about insurance. If you purchase insurance and get into an accident or have to file a claim, they jack up your rates. Then, if you don’t use your insurance, they jack up your rate via rate increases at the state level.

So why did the rates go up in Texas? I did a little research and found two reasons:

1. Cost increases at auto body shops.


2. High numbers of uninsured drivers.

The second one really bothers me. Responsible people have to pay increased insurance rates to compensate for the lowlifes (yes, if you are driving without car insurance, you are a lowlife).

I put in an email to our agent to see if they can shop around. I’m not hopeful.

Oh, and get this: in about 6 months we’ll have teen driver number 2. I guess we’ll stop saving for retirement so we can pay for car insurance. Our monthly premiums are already about the same as a car note.

It’s been awhile since I have posted something controversial. This one is an opinion piece by Alan Blinder regarding the Supreme Court and the health care law.

Whether you are for or against the health care law, Alan Blinder misses the point of the Supreme Court, which is to decide whether or not something is constitutional. And, Mr. Blinder is trying to make this a party issue by claiming that since the Supreme Court is more conservative-leaning, it will vote along party lines.

Anyway, I’m interested to hear your thoughts on Mr. Blinder’s piece. Oh, and if you’re interested, there is an interesting reponse to the Blinder piece.

This is the first I have heard of this story: Annuity Case Chills Insurance Agents.

Last month, Glenn Neasham, an independent insurance agent, was ordered to spend 90 days in jail on a felony-theft conviction for selling a complex annuity to an 83-year-old woman who prosecutors alleged had shown signs of dementia.

The agent’s conviction, by a state-court jury in Lake County, Calif., is sending shivers down the spines of Mr. Neasham’s peers across the country. They can’t recall another case where an agent was sent behind bars for selling an annuity.

The guy talked the woman into putting $175,000 into an equity-indexed annuity. His commission: $14,000 (8 percent). I know it’s not the same product, but the commissions for $175,000 put into American Funds mutual funds are 3.5%.


There is a quick way to end these abuses: stop paying bigger commissions for these products.

Now, it’s important to note that we do not have all the information. I just think putting an 83-year old into an equity-indexed annuity is not looking out for her best interest.

Let the ticked-off insurance agents’ vitriol begin…

Car shopping? If so,’s list of 20 least and most expensive cars to insure might be something you will want to read.

Their list of the 20 least expensive cars to insure:

1. Toyota Sienna LE: $1,111
2. Toyota Sienna 4 cyl: $1,114
3. Jeep Patriot Sport: $1,116
4. Jeep Compass Sport: $1,118
5. GMC Sierra K1500 Regular Cab: $1,121
6. Chevrolet Silverado 1500 Regular Cab: $1,125
7. Dodge Grand Caravan SXT: $1,129
8. Ford Escape XLS: $1,137
9. Toyota Sienna 6 cyl: $1,139
10. Chevrolet Silverado 1500 Extended Cab: $1,143
11. Dodge Journey SXT: $1,143
12. Honda Odyssey LX: $1,146
13. Kia Sportage: $1,151
14. Hyundai Santa Fe GLS: $1,152
15. Jeep Wrangler Unlimited Sport: $1,154
16. Nissan Frontier S King Cab: $1,162
17. Nissan Frontier SV King Cab: $1,163
18. Hyundai Tucson GL: $1,166
19. Ford Escape XLT: $1,167
20. GMC Canyon: $1,167

The 20 most expensive cars to insure (I don’t have to worry about this list):

1. Audi R8 Spyder Quattro Convertible: $3,384
2. Mercedes CL600 BI-T Coupe: $3,307
3. Mercedes S600 BI-T: $2,948
4. Audi R8 4.2 Quattro Coupe: $2,903
5. Porsche Panamera Turbo: $2,738
6. BMW 750i Hybrid: $2,701
7. Porsche 911 Turbo Convertible: $2,674
8. Porsche 911 Turbo S Convertible: $2,674
9. Mercedes CL65 AMG Coupe: $2,669
10. BMW 750Li Hybrid: $2,641
11. Mercedes SL63 AMG Convertible: $2,615
12. Mercedes CL63 AMG Coupe: $2,613
13. Jaguar XKR Supercharged Convertible: $2,585
14. Mercedes S63 AMG: $2,542
15. Mercedes C63 AMG Coupe: $2,532
16. Audi A8 L Quattro: $2,513
17. Mercedes SL550 Convertible: $2,458
18. Nissan GT-R Coupe Turbo: $2,457
19. BMW 750XI: $2,446
20. BMW 750i: $2,430

You can read about their methodology here.

I read this in The Ultimate Financial Plan: Balancing Your Money and Life* in the chapter on life insurance:

“Although the benefits of permanent life insurance exist, the costs must also be weighed. I recently replaced one of my term life insurance policies with a new policy bearing a $1 million death benefit and an annual premium of $465 per year, so in preparation for this chapter I reached out to several life insurance agents to see what the cost would have been for permanent life insurance policies with the same death benefit. The answers? A comparable whole life policy was 20 times more costly—$10,380 per year! The universal or variable life policies would cost around 10 times the amount that I am paying for my term policy. I’d rather control the fate of that extra money than trust a life insurance company to manage it.”

I’m about halfway through The Ultimate Financial Plan: Balancing Your Money and Life* and I have to say, I’m impressed. The main author, Tim Maurer, clearly has the reader’s best interest at heart throughout the book. Good stuff for someone just starting out.

*Affiliate Link