COUNTING DOWN THE BIG FOUR - #2 GEICO

JUST 15 MINUTES TO SAVE 15%

Logging in at #2 this year after taking over from Allstate, Geico is steadily putting pressure on the number one spot.  The ease of creating a policy online makes them a favorite of the younger generation and those who are not into face to face interaction. The Geico Gecko is a very familiar presence, keeping the brand relevant for over 15 years since its appearance in 1999.

Geico at a glance: 

• Established in 1936 by Leo and Lillian Goodwin.
• Columbia University business student, Warren Buffett, makes his first purchase of GEICO stock in 1951.
• New headquarters opens in 1959; Chevy Chase, MD.
• Passes the 1M policies-in-force (PIF) mark in 1961.
• Insurance premiums reach $150M; net earnings double to $13M, 1965-66
• Introduces 24/7/365 telephone customer service in 1980.
• Warren Buffett purchases outstanding GEICO stock in 1996, making GEICO a subsidiary of Berkshire Hathaway, Inc. 
• Today, GEICO's assets have reached $32B
• Parent company (Berkshire Hathaway) currently #4 on the Forbes Fortune 500; $182.15B
• Employs more than 30,000 associates; Maintains 14 major offices around the country. 

COUNTING DOWN THE BIG FOUR - #3 Allstate

THE ALLSTATE STAND

Topping the list at #3 (was #2 last year) is Allstate.  When I'm making sales calls, many of my potential clients tell me I sound like the "Allstate Man" (Dennis Haysbert) and actually mistake the company I work for that very reason.  Most folks recognize Haysbert as well as Dean Winters (The Mayhem Guy), but may not know much about the history of one of the more reputable insurance companies. 

Allstate at a glance: 

• Founded by General Robert E. Wood in 1931 (Sears, Roebuck, and Co). 
• Trained women to be insurance agents in 1942 (military leave for men). 
• Opened first claims office in 1952.
• Allstate Foundation started grants program to train driver's ed. instructors. 
• Neighborhood Office Agent Program launched in 1984. 
• Began publicly trading in 1993. 
• Currently #92 on the Forbes Fortune 500; $123.5B in total assets.
• 12,000 Agent offices in the US and Canada; 70,000 employees/staff.
• Allstate branding includes Encompass and Esurance. 

DEDUCTIBLES - HIGH OR LOW?

CHOOSING YOUR DEDUCTIBLES

When deciding on your insurance deductible, a general rule of thumb to remember is to choose the highest insurance deductible amount you can afford. If you can only afford a $500 deductible, don’t choose a $1,000 deductible in hopes of saving money on your auto insurance policy. If you were to get into an accident, you will have to pay the $1,000 deductible before your auto insurance would kick in.

In fact, I very rarely advised customers to go with anything higher than $500 unless they are older with older cars and still want full coverage, but don't drive very often. The difference in the monthly premium is not nearly worth the amount you pay out of pocket in the event of an accident, which is the reason for insurance in the first place.

It actually angers me when co-workers advise people (especially younger, uninformed drivers) to go with a higher deductible (like $1000 for instance) to make the monthly premium cheaper. Personally, I tell young drivers I give them the same advice on coverages I would give my own daughters, who are 25 and 19, just as I would hope their insurance agent does for them.

In the end, the choice is solely left to the customer (of course) but if you do the math, the long term savings are really not beneficial should you have an accident requiring a claim to be filed in a five year period. Again, just my #twocents.

WHAT'S YOUR AUTO INSURANCE SCORE?

KNOW YOUR SCORE! 

"Why is my quote so high?"  If I had a dime for every time I heard that ... Your auto insurance score is quite similar to a credit score.  It is calculated by analyzing your credit file. Auto insurance scores can vary by credit reporting bureau, and factors heavily in determining your auto insurance rate.

Usually there is a direct correlation between people with good credit scores and good auto insurance scores. Just as a low credit score indicates a risk to creditors, a low auto insurance score pretty much says you're more likely to file an insurance claim, resulting in losses for an insurance company. 

Credit Karma provides both scores (auto insurance and credit) directly from TransUnion, one of the three major credit reporting agencies. Like the other scores available through Credit Karma, the auto insurance score is completely free to members.

PROTECT YOUR ASSETS!

HOW'S YOUR COVERAGE?

How many are currently aware of the amount of money your auto insurance company would pay out in the event that you caused a multiple car accident with injuries or fatalities? 

Your limits of liability (and they vary from state to state) determine the amount of damages (both property and bodily) your insurance company would pay in the event you are at fault in an accident.  

Think about that the next time you look at your insurance ID cards or policy, then think about what your net worth is and/or how much you and/or your spouse bring home each year in salary.  

If your liability limits are not at the point of protecting your net income, you may want to schedule an insurance and financial review with your insurance agent ASAP!  Don't have one, then it's time to re-think that as well.  When it comes to insurance, cheaper usually doesn't mean better and having a local agent is much more beneficial than spinning your wheels speaking to an insurance novice at a 1-800 call center.