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Help, I'm a new driver and insurance costs are giving me a heart attack

bulletproofbulletproof Member Posts: 5
edited June 2016 in General
Hello I'm a new driver and I just got my license last month, I want to buy a car and start driving now but it seems insurance is holding me back. I'm 22 years old and recently got a quote from GEICO for bare minimum insurance for a 2003 Buick LeSabre and they want about 6,000$ FOR SIX MONTHS, I can't afford that.. if I take off even more coverage its down to about 4,000$ which is still too expensive.. How is a guy supposed to live when he has to pay that much for car insurance? I can't afford my bills with rates like that..
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Comments

  • andre1969andre1969 Member Posts: 25,653
    like they're trying to make you squeal like a pig. Any reason WHY your quote is so high? Do you have a bad driving record or anything like that?

    My roommate has Geico, and I think they're ripping him to the tune of around $2300 a year, for full coverage on a '98 Chevy Tracker. About the best thing I can suggest you to do is call around. Also, don't screw around with those automated internet quotes that Geico and Progressive, and others offer. Call an office and speak to a live agent!

    I could see you getting screwed for insurance if you were like 16 or 17, but by the time you're 22, if you have a good driving record, your insurance should have taken a big drop. For example, way back in 1987 when I first got insurance, liability-only, but in my own name (not on my parents' policy), my premium was $1361 that first year. The second year it dropped to $1280, then to something like $1079. It actually got down to $703 a year when I was 21, and would have gone to $653 the next year, but then I got 2 points on my record, and that shot me back up to around $969.

    Your insurance should drop once you turn 25, and I think it drops again when you hit 30.

    Something's screwy though, that they'd want to charge you $12,000 a year for a LeSabre!
  • badtoybadtoy Member Posts: 343
    If you call an agent, they'll look around for the best rates (doesn't cost you any more, they get paid by commission from the insurance company).

    There are a lot of insurance companies who specialize in low(er) rates for high-risk or young drivers. You might also want to check with your local body shops to see who they recommend (if you're carying collision, you don't want a company that stiffs the body shops).

    Also, if the car is worth less than a couple grand, collision and comprehensive aren't worth it -- just buy the minimum legal liability coverage you need.
  • bulletproofbulletproof Member Posts: 5
    I have nothing on my record, I am 22 but just got my license last month, I'm not sure how much a difference it makes at what age you recieve your license, but even still 4,000-6,000 for six months still seems crazy. I figured the LeSabre would be good for me since it was the cheapest to insure and most safest car in 2002-03. $1361 seems like a good figure that you got.. I guess I'll have to call up and find out that way.
  • andre1969andre1969 Member Posts: 25,653
    sticking you with a higher rate because you just got your license, and you don't have an insurance history, but still, $8-12K a year is just phenomenal! My Dad recently got a car and insurance in his own name, after not being insured since like 1984. They stuck him with a higher rate because he didn't have an insurance history, but said that after a year it'll go down.

    Does Erie Insurance Group offer coverage in your area? If they do, you might want to give them a call. I switched from Allstate to Erie back in early 2000 (I was 29 at the time) and the premium for my '00 Intrepid, which I had just bought a few months before, dropped from $900 a year to about $550-560. It's going to depend on where you live though. I'm in a fairly low-risk area, but my uncle, who only lives about 9 miles away, was in a "bad" enough area that Erie couldn't give him a better deal than his Allstate agent.

    Erie can also be kind of picky about what they'll insure. For instance, my roommate tried to go with them, but they wouldn't insure him at all because they said his '98 Tracker was too risky of a vehicle. A LeSabre is probably about as low-risk as it gets, though!
  • badtoybadtoy Member Posts: 343
    is if you're leasing. If you are, you are often required to carry far more liability than would ordinarily be required (this is to protect the lease-holder).
  • swschradswschrad Member Posts: 2,171
    I agree, call an independent agent and shop around. littler outfits with names like Pigslop Farmers Beneficial Mutual Insurance of Northeastern Tennesee, if they have a good A.M. Best rating so they will be around to pay if you have a claim, are going to have the lowest advertising costs and lower overhead than the guys with three tv commercials an hour. they will charge you less.

    that lesabre should be very affordable to insure. but you ARE going to pay more until you are 25, guaranteed, probably twice what an old fart like me will pay, because enough kids are laughing it up with a carful while driving, and arguing with fixed objects that just lurched out of the dark at them. the fixed objects always win. and so do the insurance companies. drive carefully with respect for the power you wield, and it will come down.
  • pluto5pluto5 Member Posts: 618
    New drivers can usually avoid sky high rates if they stay on their parents policy. When you move out, you have to get your own policy.
  • davv62davv62 Member Posts: 76
    bulletproof -

    I saw on your profile that you live in New York. Is that New York City? New York state in general, and the city in particular, has experienced huge increases in insurance rates brought on by rampant fraud which the state legislature refuses to correct because of the trial lawyer lobby. Still, the rates you quote are astronomical.

    You will find wide variations among insurance companies in rates. Certain companies specialize in a certain type of driver in certain areas, and if you're not the type they want, they quote really high rates as a way of telling you they don't want your business.

    So I would definitely shop around. I noticed one question always asked is if you have had insurance for the past 6 months. You could inquire as to whether the rate would go down after you are able to answer "yes" to that question.

    Inexperienced operators, defined as driving less than 3 years, also pay more. And you are under 25 and, I presume, a male. So you're getting it from all angles.

    I have a couple of suggestions if possible:

    -If you live in the city, you could try to register and insure the car at an address outside the city. Even the close-in suburbs have radically lower insurance rates than the boroughs.

    -If you live with your parents and they are willing, you could insure the car under their name, and list yourself as an occasional driver. This will save a lot of money. If your parents are worried about liability and they own a home, they could get an umbrella policy through their homeowner's insurance for a lot less money than the car insurance would cost you.

    I hope you can work something out.
  • jlawrence01jlawrence01 Member Posts: 1,757
    >>-If you live in the city, you could try to register and insure the car at an address outside the city. Even the close-in suburbs have radically lower insurance rates than the boroughs.<<

    There is a phrase for the practice. It is called INSURANCE FRAUD.

    It is legal to move to a suburb with lower insurance rates. For example, if you live in Dearborn, MI, you pay lower rates than if you live in the city of Detroit.

    However, if you live in Detroit and claim that you live in Dearborn to get a lower rate, that is misrepresentation,

    Had a friend who was caught and it resulted in the insurer not paying a claim.
  • swschradswschrad Member Posts: 2,171
    you can also be in the doo deeply if you register your car in rural new jersey, say, and they catch ya. you are in trouble in NY for sure, and potentially for making false statements in NJ if you say you're a piney when you live in flatbush.
  • andre1969andre1969 Member Posts: 25,653
    to call the Nationwide agent that insures my Grandmom's house (she also has a life insurance policy on me that might be just enough to bury me), and this agent is going to be able to give my roommate a much better deal than what he had through Geico.

    My roommate had been paying $2300 a year, but when the last bill came in the mail, it dropped a bit to $175 a month, which comes out to $2100 a year. He also went a bit risky though, dropping his coverage limits in order to get the bill down.

    The Nationwide guy though, was able to get him something like $133 a month for the same coverage as Geico, or $145 a month for increased coverage, which in this day and age of sue-happy people, is a good thing to have!

    That's still over $1700 a year, which to me is still awfully high, but it beat the heck out of what he was paying!
  • samnoesamnoe Member Posts: 731
    When I leased my new minivan, my insurance rate came up to $4,100! I was using Travelers for my old car (minimum coverage) and paid about $1,800 per year, but I never dreamed that full coverage will cost me THAT much - more than $4,000!!!

    I ended the year, and started shopping around. I had license for just over 2 years, and was 24 years, a male, in NY state... (that's why they charged me so much!)

    So I called many companies asking for a quote. The lowest I got was at "Kamper Direct" (they already changed names for 'Unitrin'). I got a price for $2,200.

    Wow! what a difference! one company asking $4,100, and the other one just $2,200! That learned me to always shop around.

    A year after, I had already 3 years license, I was over 25, with an excellent driving record, and it dropped for about $1,800 per year. Still a lot, but almost the price I was paying for minimum coverage when I start driving.

    So the only way is: shop around, or ask a insurance agent to give you the best price.
  • KCRamKCRam Member Posts: 3,516
    Hi bullet

    Your new license is indeed helping jack you rate quotes, but I would like to ask one question... why a 2003 Buick LeSabre? Your insurance quotes would plummet if you looked for a nice 4-5 year old economy car like a Chevy Prizm/Toyota Corolla. The worst way to start your driving/insurance history is to start with a 1 year old full-size near-luxury car.

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  • mirthmirth Member Posts: 1,212
    ...try AAA - they seem to have pretty good rates. Also, if any of your relatives are in the military (or were in the military), you could get USAA which seems to consistently have the lowest rates.
  • automan227automan227 Member Posts: 118
    Not sure if this really helps any, but I pay close to $3k/yr for insurance on my son, who drives an '01 Taurus. He is 17, no accidents, convictions, or pullovers for anything.

    I think part of the problem is that we have three cars...a Ford Excursion, Taurus, and my Audi A8, and I think my Audi is whats making my rates go through the roof with him.

    Is there any truth to that logic?
    Any idea when this rate will go down?

    AS
  • ms_mayorms_mayor Member Posts: 113
    You hit it right...the Audi is probably what's driving the rate so high.

    Normally, young drivers or drivers considered high risk in a household are assigned rates based on the most expensive car on the policy. The theory is that even though you say that driver is only using the 'cheap' car, there's always the chance they're behind the wheel of the expensive car.
  • ghuletghulet Member Posts: 2,564
    Is your son covered on the A8 and Excursion? If so (and if he doesn't drive them), I'd have him removed from coverage on those. It's usually cheaper to buy a kid a separate car and insurance (which you've done) than to have them covered on expensive and/or sporty vehicle.
  • automan227automan227 Member Posts: 118
    My son does drive both of them occasionally. The ironic thing is, that the insurance for him on the Excursion (where he is listed as the primary driver), is much less then the other two (thus why I made him the primary driver). Luckily, the lease is up on the A8 in a few months, and this will be a non-issue.

    AS
  • CarMan@EdmundsCarMan@Edmunds Member Posts: 38,514
    The Audi A8 a nice car and a pretty good deal for the money, of course one has to overlook the occasional quality problem with it, but I have found that the Audi A8 is actually a fairly expensive vehicle to insure. One of the main reasons for this is this car has a ton of aluminum in it and is very expensive to repair when it is in an accident.

    Car_man
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  • automan227automan227 Member Posts: 118
    I picked up this '98 A8 used in the summer of 2001 on a 3 year lease (got a really great deal on it). The only real reason that I am getting rid of it (aside from the high insurance) is that since as soon as the lease is up, it will be out of warranty (80,000 miles) and I have owned 4 other Audi's prior to this and I know how expensive they are to maintain.

    On top of that, the transmission died on it about 8000 miles ago, and had to be replaced. If I had not had the lease-term warranty on it, I would have been out almost $14,000 to replace it. So keeping that in mind, I will be moving on at the end of the summer.

    Another opportunity to go car shopping :)

    AS
  • hewalhewal Member Posts: 2
    wow. I would like to know how much your car cost . The first time i got an insurence it was $595.00 for 6 months.
      My advise is, the best thing to do is to shop around. Dont be suprised if you find an insurance under $1000 for 6 months.
      Right now i am paying $650 for 6 months. i did shop around and i got almost $2000.00 offer from few other insurance. So as you can see i came down from $2000 to $650. Good Luck.
  • prophet2prophet2 Member Posts: 372
    Beware of this tactic. Insurance companies have so-called "assigned risk" subsidiaries that they steer "less-desirable" risks to. Premiums can be 40-80% higher or more for the same coverage.

    In our jurisdiction, you cannot be penalized for age, gender, marital status, length of driving experience, or occupation. The only legal rating criteria are driving records, accidents, type of vehicle, number of vehicles, and type of driving (pleasure, t/f work, business). So, if you have a "clean" record, you should get reasonable rates, right?

    WRONG! You may be steered to second and third-tier subsidiaries if you don't watch it. Here is an example for which I have documented proof.

    A serviceman bought a used car and since this was his first vehicle, he needed new insurance. He went to a State Farm agent and got a quote for liability-only at $676 for six months. He actually needed full coverage as the car was financed. He came to me and I got him full coverage at $550 ($405 liability-only). Why the difference, you might ask?

    First, State Farm did not quote him from STATE FARM MUTUAL, which would have been $375. The $676 (80% higher) was from STATE FARM FIRE. STATE FARM GENERAL, used for DUI applicants, would have been in the $1900-2000 area.

    To the consumer, STATE FARM is STATE FARM, a major national writer. Many will just accept the higher rate without a second thought.

    Why was he steered this way? In all likelihood because STATE FARM did not consider GIs as prime insureds. So, they're offered coverage at a higher premium than may be justified. It's like being penalized before being convicted or even accused of a "crime." But, this tactic is legal. The applicant has been offered a policy and is free to refuse it.

    Note that at $405 liability-only, I didn't have the lowest rate. But, I got him what he needed.

    A little later, after I had submitted $20K of auto premium (30-35 applicants) in a single month, I got a call requesting that I no longer solicit military business as my book was "out-of-balance." Incidentally, I received ZERO commissions and NONE of these insureds ever filed a claim during my time with that agency.
  • jlawrence01jlawrence01 Member Posts: 1,757
    I am going to make ONE point. In the age of the internet, if you don't get multiple price quotes on car insurance, you deserve to pay the higher rates you are.

    Four weeks ago. at 5 am on a Saturday, I went on-line and within about 90 minutes had nine different quotes with little effort. Like usual, my current insurer - which offers my employer group auto rates - was again the lowest. And they offer good service.

    I would also recommend taking your current declaration sheets and faxing it to a couple of independents and seeing what they can offer.
  • prophet2prophet2 Member Posts: 372
    Get a quote on the vehicle you're planning to buy to avoid unpleasant surprises about the insurance cost. Or, if you're considering several makes and models, check on the rates of each - the info may help you decide what to buy.
  • steine13steine13 Member Posts: 2,818
    Ab-So-Lu-Te-Ly!!!
    I do that every time I think about buying a new car.
    The differnce can be staggering, and there are some big surprises.
    -Mathias
  • newbie_buyernewbie_buyer Member Posts: 11
    I'm a 47 year old female buying a car in NJ for the first time since the 80s. I gave up my car and my insurance when I moved to NYC in '86. Now I'm living in Jersey and need wheels again. Is the fact that I don't have any current insurance going to work against me? I have a spotless driving record. From what I am reading, the fact that I don't have current insurance puts me in a higher risk category, is that right?
  • CarMan@EdmundsCarMan@Edmunds Member Posts: 38,514
    Hi newbie_buyer. I am sorry to say that the fact that you have not had insurance since the 80's will definitely count against you when you try to get insurance now. You will end up paying more than someone who is already insured, especially in New Jersey which is notorious for its high auto insurance rates.

    Car_man
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  • tornado25tornado25 Member Posts: 267
    I'd actually say "it depends". Depends on proactive your agent is, how hardcore the underwriting rules are, if the underwriter got divorce papers just before your app lands on her desk, etc.

    I know here that when we encounter a "no insurance" issue, we find out why. More often than not, we can figure out if there is valid reason or if it's really the "driving without insurance". In your situation, we would probably be cool with it with proof of purchase, etc. (Helps show you didn't trade something in, a big clue you were driving without insurance). In your case, living in NYC is a very good reason for not having insurance--i.e., it seems right that you wouldn't have a car and thus, no insurance (not that living and driving in NYC is good reason for not having insurance).

    Now, for the caveat. I work in a small town in WI. You have the misfortune of living in a car insurance hell (no dig on NJ, it may be very nice, but it's a very hard market for auto insurance). The underwriters may be looking for ANY reason not to take the business or alternatively, any reason the law will allow (because there aren't many) to charge a higher rate. Thus, they may not be interested in the "why you don't have insurance" versus the simple fact you don't have it.

    I would consult a number of agencies/companies and explain your situation. If you find one that seems to understand your situation and will work around it, I would go with it. I'd suggest my company, but we are either withdrawing from the state or at least in a holding pattern, depending on the political breeze.
  • stickguystickguy Member Posts: 50,435
    you won't find anyone in NJ (myself included) that will be offended by referring to it as "insurance hell", since it is. Well, maybe the insurance secretary (if we have one), but I'm sure that person is in witness protection by now.

    2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.

  • tornado25tornado25 Member Posts: 267
    Yes, you do have an Insurance Commissioner, although in NJ, I THINK insurance is regulated by the Department of Banking and Commerce or some such nonsensical thing. She's always babbling about much better things are now that a new set of laws passed. I think her name is Holly Bakke (?).

    The craziest law? The excess profits law. If a company made more than 6% profit per year (they do look at a rolling period of 3 years or something, though) they had to refund premiums to insureds. I mean, it must be a seriously impossible place to do business. Just try finding people from 3 years ago that you owe a refund, but are no longer insured with you. It's some mind-numbing stuff.
  • ezshift5ezshift5 Member Posts: 858
    the multiple insurance quote had it right. Online at that. 21st Century (at least on the left coast) is trying to expand business BIG TIME. I would not discount them.....ez
  • newbie_buyernewbie_buyer Member Posts: 11
    Thanks for the reply. I contacted a number of companies and only had luck with an independent agent. He advised that most companies wouldn't insure but recommended one that didn't have this prejudice. So I'm getting a policy with them and then after I've been insured a while I'll see if the other sources open up to me for any better quotes.

    And now this leads me to a second question: This insurance will start 5 days after I supply a purchase order on a car. So what do I do the day I buy the car ... I don't think I can take the car off the lot with no insurance, and I'm told I can't park it on city streets without insurance. I need to do both. This independent agent told me the dealership would sell me temporary insurance. Sounds great but now I fear this is an area where I could get ripped off because they know I have no choices ... and also I'm sort of really making them drive down the car price so maybe they'll see a chance to make something back.

    How does this temp insurance work and what can I expect to pay for a week's worth of it? Is it negotiable? Should I make this part of my negotiation for the car price?
  • audia8qaudia8q Member Posts: 3,138
    Did the insane 6% profit rule cause insurance companies to pull out of NJ??

    The clueless do-gooders come up with all these "consumer friendly" laws that end up costing the consumer lots more due to lack of competition..... We see this all the time up here in CT.
  • leeandginaleeandgina Member Posts: 38
    would there be anything stopping all the insurance companies pulling out of a state like NJ because of their laws? Could the federal government force them there?
  • newbie_buyernewbie_buyer Member Posts: 11
    State Farm won't write a policy in New Jersey at all. It's probably not the only one that pulled out.
  • stickguystickguy Member Posts: 50,435
    I believe there are some regulations that the insurance companies must follow to get permission to leave the state. They can't just decide on a whim to cancel everyones insurance and leave.

    IIRC, one threat that the insuramce commission used (somewhat successfully) was to make it all or nothing. That is, if you stop writing Auto, you stop writing everthing (even the lines that make big money).

    2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.

  • tornado25tornado25 Member Posts: 267
    Newbie, I saw your message in the other insurance board and I'm not sure I understand the problem.

    You SHOULD be able to go to an agency, show them the purchase contract and set up the policy with a future effective date. That is, for example: Go in today and set up policy, pay for it, etc and it's effective Friday (or whenever). You will NOT likely be able to get temp coverage or anything of that nature from the dealer. Of course, it's NJ, so I could be wrong. I'm surprised the companies you've called have not come up with a solution because I imagine this happens a lot. If they won't do a future date, I would just go to the insurance company before you go to the dealer and get it all done in one afternoon or whatever.

    Audia, that was a big reason, but there were lots of others. One is NJ had a law (that I think they've suspended or repealed) that was called "take all comers". It required an insurance company to offer a policy to anyone who wanted one. It allowed the company to charge a rate accordingly, but it had to offer a policy. The state also tightly regulates price increases, often times denying an increase the companies own loss history date supports but the state claims was too much.

    All in all, it is just a HUGE headache to sell auto insurance in NJ, often times at a loss anyway, so that's why a LOT of companies are withdrawing.

    leeandgina, stickguy: There is nothing, theorectically, that would keep every company from pulling out. But, stickguy, you're right, to an extent. The state requires the company to file a plan that cancels their policies over a period of time. But, despite the heavy-handed nature of the state, it's still a business and they can't MAKE somebody run a business.
  • newbie_buyernewbie_buyer Member Posts: 11
    Tornado, thanks so much for replying.

    Unless I am mistaken I only have a purchase order upon buying the car, not before. Is that incorrect? My understanding was that I get the PO when I pay for the car, and only then will the insurance company accept the application. They simply won't process it without the PO and the registration. At all. So I can't go to the insurance company before going to the dealer.

    Perhaps I am not understanding the nature of the PO in this context. If it is something that the dealer will issue me before I buy the car, I don't have this problem. However, my agent is certainly not indicating that to me at this point.
  • tornado25tornado25 Member Posts: 267
    Well, the last time I bought a car and we came to "more or less" kind of agreement, I received a copy of the sales contract, unsigned. I've seen people have these many times before. It's basically a run down of the numbers involved and the bottom line amount. If auto sales are done like insurance in NJ, then you might have issues, I guess.

    If someone came into our office with this, regardless of whether they've taken delivery, it's always been good enough for me to show "proof of purchase".

    Your only other alternative, if no insurance company is willing to work with you on this catch-22, is to complete the sales process, leave the car sitting on the lot, go get the insurance and come back and get the car. I'm sorry I can't be of more help, but I've never encountered a problem dealing with a situation like yours.
  • newbie_buyernewbie_buyer Member Posts: 11
    No, actually, you may have helped. I just have to determine if I can use the pro forma sales contract. Maybe I can get the dealership to fax that to me a few days before I get the car. There's no way I can get the insurance the same day I obtain the contract, but if they will take it unexecuted then I can send it out early and go get the car at the end of the week. I may end up with one or two days uninsured like that, but is far better than a week. Am going to try that. If it works, will report back.
  • steine13steine13 Member Posts: 2,818
    Why can't you let the car sit at the dealer for a couple days after you sign the contract and pay? Surely they have a spot for it? I understand that in most places, it's not a done deal until you drive off, but with all the hoops you're jumping through, they ought to have an idea you're not just yanking their chain.
    -Mathias
  • jonreyjonrey Member Posts: 1
    I recently purchased my first car (hence, new driver) -- a 2004 Hyundai Accent GT. I got this model because all others have 13 in. wheels and notoriously bad suspension, whereas the GT has 14in. wheels and "sport-tuned" suspension. There is no change in the engine or performance, whatsoever.
    I'm 23, have no accidents or such on my record, and my "commute" is less than 1 mile away.Yet for some reason, the lowest quote I can find (and I've quoted with at least 10 different companies) is ~$1,100/6mnths with Progressive. I've been pondering the idea of going with Nationwide (~1,250/6mnths) because their rates are supposedly lowered the longer you're with them... any comments on this?
  • tornado25tornado25 Member Posts: 267
    First, jonrey, let me say you probably have a couple things working on this rate and the least of which is difference between the base model and the GT.

    1) The new driver/first car thing. Were you ever rated on your parents' policy? That is, did you drive their vehicles and did they pay a higher rate for you? Or, are you really, really a new driver, as in "yes, I'm 23 and I just got my very first DL 2 days ago"? If you've had a DL since you were 16 (or whatever, then you aren't a new driver and that's not an issue. If you are a NEW driver, however, that would explain a LOT of that rate.

    2) I assume you're single? If that's the case, your age (regardless of your driving experience) is the #1 reason the rate is what it is. That, along with no multiple car discount, no accident free/claim free/longevity discount, etc. In most instances (I cannot speak precisely of Progressive), if your classification is age-based, the commute is irrelevant. That is, you are being rated based on being 23, not a 23 year old driving one mile or one hundred miles to work. That will/should change when you turn 25 or get married.

    3) Re: going w/ Nationwide vs Progressive because of the "lowered" rates, that touches on the accident/claim free/longevity discount issue I brought up above. Progressive may not offer this. Most top-end, major writers do, because they want business that will stay with them long-term. They don't exist just to churn out as many policies as possible in any given quarter.

    Thus, the State Farms, Nationwides, Allstates, Safecos, etc of the world escalate a discount based on long you've been with a company and accident free. If Nationwide offers such a discount and you think you'd stick with them, maybe $100 now is worth getting the "clock ticking" so to speak.
  • newbie_buyernewbie_buyer Member Posts: 11
    Mathias, good point and I'm going to try that. But picture if you will: a New Jersey inner-city dealership. Barely enough room for the cars, they are virtually stacked on one another. To get one out, you have to move two.

    So, I'm not sure my leaving the car there a week will sit well. And it has to be a week. Insurance company says 5 days to process the policy once they receive the finalized purchase contract and title (official word: they wouldn't take anything pro forma as I'd hope above).

    Welcome to New Jersey, folks.

    P.S. Thank you to all who have contributed.
  • stickguystickguy Member Posts: 50,435
    I know you can add a car on the spot (over the phone) in NJ since I have done it. IIRC, you can actually drive the new car on the existing policy, as long as the coverage levels are the same. I just bought a new car 2 weeks ago, and the dealer simply called the insurance co. to make the change, and I got paperwork later.

    I just can't see why you can't be approved and have the policy set up in advance, and simply add the car when it is time. But, given this is NJ (where you are even lucky to get an appointment to ask someone to consider writing a policy), anything is possible.

    2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.

  • prophet2prophet2 Member Posts: 372
    Your points are well-taken. We've had problems here in Paradise with "take-all-comers" for both the consumers and the insurers. The Financial Responsibility law mandates either car insurance or posting a bond to "self-insure."

    The law also eliminated most of the old rating criteria (age, gender, marital status, driving experience) and led many carriers to continue using them "illegally" or to resort to other tactics to circumvent the law. Such as not giving phone quotes and requiring an appointment with an agent to secure coverage. Often, these were set four to six weeks in advance as buyers were told that there were no agents available (they must have all been on the golf course). Or, as in the cases I've discussed, foisting on some applicants second-tier carriers at nearly double the premium.

    The "take-all-comers" was modified to allow companies to non-renew at will up to 2% of their existing business each year. This could have been on the number of policies, premium volume, or liability exposure.

    Excess profits - we've got a law here which mandates premium reductions after a rolling 24 or 36 month period of such profits. These profits are not limited to underwriting gains, but also include investment gains and expense control.
  • tornado25tornado25 Member Posts: 267
    "Excess profits - we've got a law here which mandates premium reductions after a rolling 24 or 36 month period of such profits. These profits are not limited to underwriting gains, but also include investment gains and expense control."

    And this is exactly the kind of thing that would make me pull my hair out! Imagine the business you work for, or own or whatever. Then imagine, your company or you, develop a new product or service and can sell that product for a profit much higher than the one you previously sold. Yet, you cannot because the state has told you how much you can make in any given period! This kind of junk sounds suspiciously non-free market and non-capitalism to me. And it's supposed to be ok, because it's insurance and everyone "has to have it". Well, great, then let someone take a stab at it--a result NJ has experienced to what I hope is its great dismay. "D'oh, guess we weren't quite as smarty-pants as we thought".

    And no one should take that as sour grapes just because I work in the insurance industry. Fortunately, while insurance is still one of the most heavily regulated industries in WI, it's probably one of the best states in which to conduct that business.

    Concepts like mandatory insurance are ridiculous. Studies have shown that in mandatory states, like MI, for example, the rate of uninsured drivers is no better than in WI (no mandatory coverage). Now, for all the wanna-be legislators out there, scratching their heads, wondering "duh, uh, gee, how can that be?", the problem is there is going a certain percentage of people out there who a) refuse to believe in insurance and simply refuse to buy it, b) cannot afford it, under any circumstance, even if preferred rates were given to drunk drivers and c) are wandering through life without a clue, who pay utility bills the day before they are to be shut-off, pay their auto loans one month late, etc. These people let policies lapse and forget about it. That's not about poor people, it's people who can't manage their life.

    I see all 3 every week. States have passed laws and enforced them in such a way that have ingrained into the public's mind that somehow, insurance is an investment, that eventually you get somehting out of all the premium you paid in. It leads to people bashing the industry in the same way you see car salespeople bashed. We're all crooks, we never pay, etc. I don't care anymore--I know what I do and I know my company does everthing fairly.
  • prophet2prophet2 Member Posts: 372
    We have a law that forces our local medical insurer (Blue Cross/Blue Shield affiliate) to reduce rates in the event of "excess profits" over the rolling period.

    Mandatory insurance - we've had the "financial responsibility" law for 31 years, but still have 15-20% uninsured. You're right, it's the irresponsible life-style of some. Others are proponents that the government is ILLEGAL due to overthrow of the Hawaiian kingdom in 1893, so they don't even register their cars or get drivers' licenses, much less insurance.

    Being isolated from the rest of the country in the middle of the Pacific makes "pay-at-the-pump" a perfect solution for mandatory liability insurance - we couldn't drive into the next state to avoid the extra tax. It can't get passed for several reasons, one of which is that a few dunderhead politicians insist on attaching collision/comp to the coverage. Or that commercial users would scream about the added cost to fuel, despite the fact that it's a deductible business expense and/or possible tax credit.

    Of course, crime will probably go up as some will steal gas from parked cars!

    And, how often we hear the "I paid my premiums for 25 years and never had a claim" bit. If they want a return on their premiums if they've never had a claim, the actuaries can design such plans. But, they'd scream that the rates are "too high and a rip-off!"
  • modestmousemodestmouse Member Posts: 53
    I'm not a new driver, I got my license when I was 17 and I am now 22. I have had one ticket between there and here so I have a good driving record.

    I got a quote for a new 05 Corolla, Phantom Gray. My current agency (Farmers) quoted me at $1300/six months! Thats a chunk a change @ more than 200 bucks/month. After I picked up my jaw I did some shopping. I called Allstate, Progressive, and StateFarm. I basically went through the phone book. IN any case they all quoted me about $950/six months which was way better. Then I called Geico and they quoted me at $750/six months! I was very relieved.

    This is BTW for full coverage that will satisfy a finance agreement with 500 dollar deductions The first four companies (farmers, allstate, progressvie, and stateFarm) were quoted w/o towing and rental. Geico was quoted with towing and rental.

    My questions are:
    1. Can I trust over the phone quotes? Will I be able to establish a policy over the phone?
    2. Is Geico a good company, has anyone had an experience filing a claim with them? Is it worth paying a little more for a company thats more dependable in times of need?
    3. How can Farmers be charging so much?

    Thanks in advance MM
  • ezshift5ezshift5 Member Posts: 858
    ....for free.......

    Call 1-800-211-SAVE. Which is 21st Century Ins.

    I went from $1400/6 mo to $726/ 8 mo )Progressive to 21st Cent.

    Tell them I sent you. I'd be interested what they can do for you.
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