Advice on home/auto insurance in TX (credit, homes)

[OpenD]

Originally Posted by 10scoachrick

I don't believe the 'commission' is added to the cost of the insurance.

Didn't say it was added to the premium. You get quoted a price, you pay the price, but the cost of the commission is already built into the premium.

The premium is determined by calculating cost of providing coverage + profit margin + cost of sales. If the cost of sales is high because it takes an agent and an office to sell the policy, then the premium has to be higher than if the cost of sales is far lower. An internet sales model, augmented by phone agents, is much cheaper than full agents in retail offices, so a company using that model can provide the same coverage at a lower premium. That's just simple math.

[JohnA151]

Originally Posted by scm53

If you are eligible, you cannot beat USAA - for rates, service, or the annual dividend they pay as a cooperative.

They greatly expanded their membership eligibility in 2009. It could be worth checking their new requirements, even if you weren't eligible in the past.

https://www.usaa.com/inet/pages/why_...legacyPassDown

nonsense i just left USSA after 30 years they just increased my home owners insurace its $1200 .00 py now went to a local company got EXACTLY the same coverage for $800.00

[JohnA151]

Originally Posted by TexasHorseLady

We used to go the independent agent route, and then we found Germania. We use them for our home insurance (home and rental property), our farm insurance, and our auto insurance, are looking at getting life insurance through them, and if they offered health insurance I'd be signing up for that, too.

They're a Texas only company, and you're not a customer, you're a member. As one of the insurance agents who called us after we bought our home said, before hanging up like all the rest when we said "Germania", "They're a different breed of cat."

Agreed i just went with germania after 30 years with ussa they are a lot cheaper for same coverage

[10scoachrick]

Originally Posted by OpenD

Didn't say it was added to the premium. You get quoted a price, you pay the price, but the cost of the commission is already built into the premium.

The premium is determined by calculating cost of providing coverage + profit margin + cost of sales. If the cost of sales is high because it takes an agent and an office to sell the policy, then the premium has to be higher than if the cost of sales is far lower. An internet sales model, augmented by phone agents, is much cheaper than full agents in retail offices, so a company using that model can provide the same coverage at a lower premium. That's just simple math.

No reason to argue; but you're saying EVERY 'internet sales model' results in lower prices to the consumer??? I don't believe that's the case.

The cost of the 'agency/retail offices' is spread among the various 'brands' offered by an independent. No one company is footing the bill for the sales force. Economies of scale/synergy/efficiency and all that. No reason not to think the 'savings' by not having an agent would simply result in a higher profit rather than savings to the consumer.

Not so simple, after all, I reckon.

[Idlewile]

Originally Posted by JohnA151

nonsense i just left USSA after 30 years they just increased my home owners insurace its $1200 .00 py now went to a local company got EXACTLY the same coverage for $800.00

For HO, I found it really differs property to property and you are rarely comparing apples to apples; just because someone else has a house of similar size, worth etc, doesn't mean their rate/quote with the same company will be similar to yours.

Whereas for auto, aside from where you live factoring into rates, it's much more of a direct comparison.

[TexasHorseLady]

Originally Posted by Idlewile

For HO, I found it really differs property to property and you are rarely comparing apples to apples; just because someone else has a house of similar size, worth etc, doesn't mean their rate/quote with the same company will be similar to yours.

Whereas for auto, aside from where you live factoring into rates, it's much more of a direct comparison.

We use Germania for our farm/home, rental house, and auto insurance. Before we moved to them, we had the lowest rates we could find using an independent agent. For the same coverage, same properties, Germania came in cutting our insurance costs half to two-thirds. We figured that was a pretty good comparison.

We have had a claim on our house in town when the wind picked up a large tree that was on the property line between the house next door and us and set it down on our roof-height deck and a bit of the roof. By the time we could get into town to look at it two days later (we had a property manager taking care of things for us so weren't there the next day), we had a check from Germania that covered the cost of repairing the damage.

When the F5 came through town and hit on the other side of the highway and they were BUSY, I got a call from our agent saying that he knew that we had had hail on our side of the highway and was it okay if he brought an adjuster buy to climb up on the roof and see if there was any damage. (There wasn't, but we had had ping pong ball size hail.) THEY called US to see if we had a claim! When a hail storm hit the whole area another time and I called to see if they would come out and check our roof, they asked if it was okay if they checked the roof of the house in town at the same time since the hail had hit the whole area.

Our rates didn't go up because of any of that, including the claim.

There's a reason we've been with them so long.

[EzPeterson]

Originally Posted by OpenD

Didn't say it was added to the premium. You get quoted a price, you pay the price, but the cost of the commission is already built into the premium.

The premium is determined by calculating cost of providing coverage + profit margin + cost of sales. If the cost of sales is high because it takes an agent and an office to sell the policy, then the premium has to be higher than if the cost of sales is far lower. An internet sales model, augmented by phone agents, is much cheaper than full agents in retail offices, so a company using that model can provide the same coverage at a lower premium. That's just simple math.

Actually, the inverse is generally true - the direct sales model quite often is more expensive for an insurance carrier. With an independent model, they pay 8-15% commission (roughly), and that's it. With a direct model, they have salaries, management salaries, facility expenses, hiring and training expenses, and the grand daddy of them all - acquisition costs (advertising). In all, that tends to run in the high teens when it comes to expense ratio.

Germania has been very successful by keeping a very narrow focus on what business they want, focusing primarily on rural areas, through a captive agent network. They aren't looking to be a huge company, and would actually fail if they did. It's going to be interesting to see how they begin to handle the Austin DMA, as we were traditionally a very profitable area to insure, this has begun to change pretty dramatically over the past 5 years.

[calel]

USAA wasn't even remotely competitive when I quoted home/auto through them. When I pointed out the rates other companies were quoting, they tried to argue that their customer service was better... I said no thanks and went with a different company.

[JohnA151]

Originally Posted by Idlewile

For HO, I found it really differs property to property and you are rarely comparing apples to apples; just because someone else has a house of similar size, worth etc, doesn't mean their rate/quote with the same company will be similar to yours.

Whereas for auto, aside from where you live factoring into rates, it's much more of a direct comparison.

the quote were for MY house from all companies
same house ,same size ,same worth etc etc

[OpenD]

Originally Posted by EzPeterson

Actually, the inverse is generally true - the direct sales model quite often is more expensive for an insurance carrier.

Not with the internet model, no. And both models have high ad costs.