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This is exactly what is so appalling to me. You sign this letter and they can indefinitely charge you up to 250% of the NCRB approved rate without ever again having to notify you that they're doing so. Even if you change policies. And there is nothing in my letter stating how you can revoke this consent. It's an evergreen contract giving State Farm your consent to charge you more than what the NCRB feels is reasonable.
You revoke it by canceling and going elsewhere whenever you decide to do so.
Why? They are a business who's sole purpose is to make money. Someone doesn't start a business regardless of the type of business to be somebody's friend. Thankfully we have the free market. Once the cost outweighs the provided service I find another company. There is always another company who will provide a the same service for less money. Sometimes you can find a better service for less money!
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Originally Posted by luv4horses
Why does State Farm find it necessary to do this? They must realize that this will turn people away. Are they in financial trouble themselves?
A business finds it necessary to raise rates to either increase profits or to simply maintain the same profits due to enacted laws. Do you really think new regulations put in place on businesses will actually be paid for by the business? Heck no! And this applies to any business.
Yes, some customers will leave and that's the fortunate advantage of a free market. Other people are so full of money that it's not worth their time to deal with the "hassle" of finding a new insurance policy. If too many customers leave and profits decrease the business will lower their price and the previously happy customers will have the option to return.
Yes, some customers will leave and that's the fortunate advantage of a free market.
Which is what I'll do if/when I receive such a letter. I don't see any need to line the pockets of an insurance company that wants to skirt around the fee limits set by the state insurance board.
Other people are so full of money that it's not worth their time to deal with the "hassle" of finding a new insurance policy.
It's also something to do with the fine print or ambiguity that come with these letters, $1 is enticing enough for some to sign up, some do leave after careful thought. I'm one of them about to switch to a new one
So what this means is those who signed the rate of consent form will ultimately pay for the unapproved rate increase while those of us who don't will either deal with our current insurance company's customer service or find another insurance company. Sounds fair to me.
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A fool and his money are soon parted.
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