How come american family insurance just gave me a quote on my car insurance half of what i pay now?
December 16, 2009 by
Filed under cheap american car insurance
so right now i have Farmers. How can american family insurance charge me more than half of what i am paying now? Is there a scam? and they told me that i can call my agent from Farmers and drop them right now and they have to pay me back what i have already paid in advanced. Is that true?
It is not necessarily a scam. Have you compared all aspects of the policies. The deductibles are the same, the endorsements and limits are the same. Both of those can make a difference. Before you switch talk to Farmers and let them explain the difference.
There can be other reasons. American Family may like your particular type of risk versus what Farmers is looking for or American Family has less clients in the area helping to reduce their risk of catastrophic loss etc. Still make sure you are comparing apples to apples before you look at the price.
Depending on the rules in your jurisdiction you could be ’short rated’ on any returned premium. Since insurance companies incurred most of the cost of administering a policy at the beginning of the policy period they are allowed to charge for that work. So if say your policy had 90 % of its term left you may only get back 80 % of your prepaid premium.
First, your current insurance will return unused money (prorated).
As far as your quote, I have been told this company bids low and then keeps raising the price every year by a lot. They must hope that you are too lazy to shop around again or think everyone must be paying this much so you just do not look.
If you a a younger driver some companies are not so hard on you. Unsure of Farmers on this. Hope this helps.
farmers may be an agent and american may be an insurance group
the direct insurance agent will charge one price
and the group finds the cheapest one for you
it may be a ploy just to have you as their customer
really check the policy and make sure you get the same coverage and have the same deductible before you sign anything
it may be because its a 1000 dollar deductible instead of 500
that’s the money you have to come out of pocket with if you wreck
Yes they will pay you back, However (I was insurance agent ) it is kinda a scam the quote you got is not a guarantee until it goes threw underwriting there is NO way for the agent to tell you what your premium will be that is up to the underwriters. Its only a quote based on you credit score however that is only 1 facter underwriters take into consideration and of course once you drop farmers they kinda have you as I am sure he had you sign an commitment of some kind, however that is not legally binding you still have the right to go threw someone else for insurance however if you don’t go with them and you let them cancel your Farmers insurance than you will be without until you find someone else. ITs best to wait and see what he comes back with after underwriting and cancel your own insurance after that.
Well, first of all, they haven’t run the credit score and driving check. Second, there could be a major coverage difference. You need to ask THEM why their rate is so less. It might be a lot less, but HALF makes me think this is a bait rate.
Regarding the return. It’s going to vary by state. Most states, you’ll get a SHORT RATE cancellation, which means, there’s a cancellation penalty. But maybe not in your state.
Anyway, if I were you, I would wait until you have that new policy in your hands, and double check the premium, before you cancel the old one. Because if it IS a bait rate, you’ll probably be cancelling the new one, and you CAN cancel it flat, if you didn’t let the old policy lapse.
1. Make sure deductibles are the same.
2. Make sure the company IS LICENSED in this country! (Check BBB)
3. Be sure the policy limits match. In other words is it $300/100/50 (50 is the property damage)
4. Is uninsured motorist included?
5. Have you heard of American before? I haven’t.
6. Be sure they’re not quoting liability only, especially if you need full coverage
7. Have you possibly had insurance points that are now coming off?
8. Is it offered in addition to a homeowner’s or renter’s policy?
Not matter what, read ALL the fine print. And let your current insurer go over it with you. If it’s a truly competitive bid, then your current carrier will be learning something too.
American Family did this to me. I stayed there for 6 months and then my rate doubled. They blamed it on a different rating they were going to. It is law that insurance agents DO have to give back any unused premiums when you cancel a policy. But, the smart thing to do is to cancel your Farmers policy (if you switch to AF) AFTER you get the declarations in the mail for AF. If you don’t and you for some reason get rejected with AF after the initial approval, you’ll be without insurance. Better to have them overlap a little than to have none at all!