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Home, Auto & Umbrella Insurance—“Longevity Benefit”?

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AUTHOR: Andrew Forsythe on 1/23/2025

Recently, and spurred by the horrific fires in L.A., there’s been a lot of attention on home insurance, including skyrocketing premiums. Like many people, we have our home, auto, and umbrella policies with the same company, and have seen our premiums increase dramatically in the last few years.

I’ve occasionally heard mention, without much in the way of specifics, of a “longevity benefit” in staying with the same insurance company rather than constantly shopping around and switching.

I’m hoping someone with a background in insurance can shed some light on this. First off, is there any truth to it? If so, is the benefit in the form of smaller premium increases for long term policyholders, or a smaller chance of being dropped, or…?

Thanks for any insights.

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Fund Daddy
16 days ago

Insurance is similar to many others. I decided to learn as much as I can about anything that deals with money because I believe in “Give a Man a Fish, and You Feed Him for a Day. Teach a Man To Fish, and You Feed Him for a Lifetime”Every 2-3 years I shop the market; every year I call my insurance and ask why? Being a longer-term insured in most cases doesn’t guarantee lower rates. Reading Consumer Reports for years taught me that Amica and USAA are in the top. Amica has been much more expensive, and I can’t get USAA (military). Most are pretty close. I used to have State Farm. When my kids started driving, they wanted to triple my insurance.I switched to Liberty and went thru several accidents and totals with our vehicles, and they were fatastic.
Two years ago, Liberty increased the auto insurance by 50% I switched to Allstate for only 20% increased. Six months after the switch, our house was hit by a tree, and they paid for it. That process was a lot harder and longer.
I never used an independent insurance broker. Maybe it’s time to use one. I’m never sure about “independent.”
From my experience, reps have been cut for years. They want you to call 800# and talk to someone who doesn’t know you or care too much. The local reps who I got to know helped me with great rates and service.
Lastly, there are more auto insurances, but if you look for auto, home, and umbrella, the total amount is what I’m looking for.

When I looked for Medicare Advantage, I found quickly that most are not honest and/or don’t know enough. It took me months to understand it and do it myself.

Last edited 16 days ago by Fund Daddy
Michael1
16 days ago

I don’t have an answer to the question, but will offer a different perspective. I might shop for the best rate on some things, but I’ve no intention of doing so for this kind of insurance. This is one of those areas in which if I have a provider I like, I’ll keep them.

mytimetotravel
16 days ago
Reply to  Michael1

Still pays to check on them. I was a State Farm customer for decades. When I moved to an apartment a couple of years ago I was surprised that the quote was nearly as high as my existing homeowners policy. When I read the fine print I saw they were insuring the contents for 50% more than for the house, which I discovered was also too high. I am now with Erie…

Luckless Pedestrian
16 days ago

“I’ve occasionally heard mention, without much in the way of specifics, of a ‘longevity benefit’ in staying with the same insurance company rather than constantly shopping around and switching.”

Some auto insurers may actually charge you more for coverage if you remain loyal and don’t shop around and switch occasionally. See https://www.npr.org/2015/05/08/403598235/being-a-loyal-auto-insurance-customer-can-cost-you

Mark Eckman
16 days ago

What I find frustrating is that the rate data is all collected by your state department of insurance, but we consumers cannot access the data. But compare that with Medicare Advantage plans and Medicare part D information, which is available for comparison.

I realize there is a vast difference in health coverage versus casualty insurance, but comparability is so important.

Last edited 16 days ago by Mark Eckman
Marjorie Kondrack
17 days ago

Andrew..each insurance company sets their own
discounts for policyholders. We are insured through State Farm and they do offer several discounts in various categories and availability and eligibility vary by state. Since you asked about “longevity” State Farm offers discounts for long-term policyholder, Offering 30% discount on their car insurance policies. You can also bundle home and auto insurance policies with State Farm to save more.

stelea99
17 days ago

Like any other types of business, Property and Casualty Insurance companies would like to retain good (loss free) customers. And, under “normal” operating circumstances they try to do so. However, they, like all other types of business, don’t control many factors that can affect their operating results. In many states their operations are heavily regulated. They must maintain capital reserves in proportion to their premium volume. These capital reserves are the result of profitable operations. When/if they cannot make a profit, as their capital reserves decline relative to their premium volume, they must reduce the number of policies they issue.

Additionally, to offer insurance that covers a particular risk, (such as fire or windstorm) the risk must be commercially insurable. There must be a large pool of similar things to be covered, The potential losses for the pool need to be predictable under the Law of Large Numbers. And, the pool cannot be catastrophically exposed such that a catastrophe would bankrupt the pool. As has been demonstrated by results in Florida, the peril of windstorm is not commercially insurable there. The same now seems to be true for wildfire in certain portions of California.

In your particular situation, where you live and how the insurance companies are doing there affects how the companies are treating their customers. We have just had several years of inflation after not having any for a while before. Even in areas without CATS, the companies must increase prices to stay even with inflation. All policyholders have to pay these state wide increases. If you live somewhere without CAT losses, there are probably not many homes being non-renewed. If you have not reported any claims, and are not in a problematic area, you shouldn’t worry about being dropped. And, it could help you to get a couple of quotes from other companies to see if your company is competitive. Some companies offer a loss free discount on auto insurance such that if you have not had a loss for 5 years, they will not increase your rates if you have one. I know of nothing similar on HO insurance. However, if you eliminate CAT losses, the average HO policy has one loss every 9 years. If you have a history of HO claims……….

Then, for auto insurance, cars are now being built with a lot of sophisticated technology designed to reduce the number and severity of injuries in crashes. While this new tech may reduce the cost of injuries, it has really increased the cost of repairing the cars. These changes are working their way through the loss ratios of the companies and impacting the premiums for these cars.

After COVID, most police departments where I live are understaffed and not enforcing traffic laws. People are driving faster, and more aggressively. Traffic deaths are up, and so is accident frequency. The result of this will be significantly higher auto insurance rates and tighter underwriting…..

B Carr
17 days ago
Reply to  stelea99

Wonderful detail. Thank you!

Edmund Marsh
17 days ago

Andrew, I don’t have inside knowledge, but I’m convinced the periodic, onerous, time-consuming insurance shopping trip is the best way to the best rate. I last did it about three years ago, and it seemed the rates for the top providers in my state were a little more competitive than they had been.

Edmund Marsh
17 days ago

Here’s another suggestion: A number of years ago, I got frustrated with steadily increasing auto insurance premiums. I called my auto insurer and told the representative, “I’m going broke paying insurance premiums”. She didn’t say much, but gave me a telephone number for “customer retention” or some similar name. That call resulted in a premium decrease of over $800, a significant percentage. I’m not sure how that fits in with the detailed comment above, and I’ve had no similar reduction since.

David Lancaster
17 days ago

Did you buy your policies from an agent who represented only that insurance company?

If so I would ask that question of an independent insurance agent in your town.

Mark Schwartz
17 days ago

I would say insurance is a necessary evil that we all hope to never need or use. We used an insurance broker for 25 years which supposedly shopped our package of insurance needs each year to find the best overall rates. Of course, it is equally important to vet the solvency of the companies we eventually did business with each year. We didn’t necessarily have an alignment or allegiance to any one company. We are currently out on our own since our broker rep retired and the customer service went down hill.

Dan Wick
17 days ago

Most of the discounts seem to be for new business, not for loyal customers that have omitted the yearly rate shopping that helps control costs. I am retired from a property and casualty company and am aware that longevity has nothing to do with claims payment.

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