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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.
We’ve been with State Farm since 1989 and have our auto, home, and umbrella policies with them. We have a local office and agent that we’ve gotten to know, and they’ve been great. Recently I inquired about adding a rider for art and musical instruments we’ve acquired and the agent laughed. They’re not writing any new homeowner-related policies in California, and umbrella policies fall under that as well. Depending what happens with them—we’re not in a high fire risk area, but the whole state is affected—we may look into USAA. My husband’s father was a career Marine, so I think we can qualify from that. My grandfather was in the Army in WWII.
As Stelea99 notes below, good luck getting USAA to give you HO insurance. We tried 2 (?) years ago and were told no.
Our home in San Rafael, CA, was built in 1968 and has withstood many earthquakes – some rather big – as well as other natural events, so it has a long track record of handling whatever is thrown at it.
We have SF and I consider our rates low for auto, home, and umbrella with very small increases over the years.
$1300/year for 2 cars:
2005 Camry with liability and comprehensive
2015 Camry with collision, comp, liability
Home: $1466/year for their best coverage, which is Extended Replacement Cost and includes Building Code Upgrade coverage.
Umbrella: $2 million for $693/year
If I get dropped and can’t find a decent option, I may invest in a professional assessment to fireproof my home as best as I can and then invest in daily prayer.
I urge you to carefully read the State Farm communication at this link: https://newsroom.statefarm.com/state-farm-general-insurance-company-update-on-california-2-2025/
State Farm General (the company that SF uses in CA) is currently financially impaired. Standard & Poor has issued a credit watch with negative implications for the company. One more downgrade and SF will not be eligible to insure homes with mortages….,
Recently, the CA Insurance Commissioner declined a rate increase request. SF has asked for a rehearing.
Currently, I believe that USAA is not selling new HO policies in CA.
Thanks for all the updates. I’ve long heard great things about USAA, but it seems being the nephew of a WWI (yes, the Great War!) veteran doesn’t make you eligible. 🙁
We’ve not only had the same insurance company for all our 40+ years of marriage, we’ve used the same agency. It’s now run by a child of the original agent.
This includes auto & home. We no longer need the life insurance.
We get first rate service. All calls returned promptly.
Last year we were involved in a traffic accident. All car repairs, and loaner car paid for, except the deductible.
Our auto rate hasn’t changed. In fact it has gone down a bit.
Now, when we “downsized” to a condominium our homeowners rate did increase. We were told that’s because we added an extra insurance rider to cover any claims involving “the common areas” that the HOA didn’t cover.
Our long time lawyer, well his son who took over the practice, suggested we get that rider.
Andrew, here’s my update. . Even with various discounts for bundling, loyalty, accident forgiveness, etc. you may still make out better with another company. But If you are satisfied with your current company’s customer service, And the cost savings to change is not that great, you may be better off staying with your current carrier.
Im afraid there’s no getting around it—call a few companies, make notes, ask about discounts and compare. Changing Insurance companies is an inconvenience, but may mean saving a few hundred dollars a year.
i hate to be the cynic, but loyalty doesn’t mean much anymore. In November I had a bad experience with my current carrier, State Farm.
we’ve been with for decades. Their entire method of handling claims has drastically changed. We had a homeowners claim…our first. It was stressful.
i may write a future article about it.
Good luck in your research and decision making.
Ed’s choice, Amica, is highly rated company and Erie, Kathy’s choice has superior rating—but it only operates in 12 states..Texas is not one of them. My husband is a former U.S. Marine so on my list is USAA.
I had State Farm as my insurance carrier for 30+ years. When I was sued for a car wreck I was involved in, they were great. The lawyer they appointed was great to work with and I ended up being completely cleared of any fault.
My husband is also a U.S. Marine, so when we married, I switched over to USAA. I have to say I have never been so impressed by an insurance company! They are always so pleasant to deal with and last year we got a refund on a portion of our premiums that was worth nearly $600.
I also have USAA. When your husband gets to 40 years there’s a “senior bonus” distribution that happens as well. So this year my most recent distributions were $460 in December and then my “senior bonus” of $956 this month. Of course, it was just dumb luck that I got USAA 50+ years ago and stuck with them. I don’t think I ever heard about the “senior bonus” until I started getting it about 10 years ago. Including distributions, my total out of pocket cost for a home, full coverage on 2 cars, and a personal liability policy run me about $250 a month. Of course, that’s after all the “normal” discounts like loyalty bonus, no claims, etc.
Wow – that’s great Kristine. I slmost switched several years back to USAA but I liked the idea that our State Farm agent had an office near our home, and it’s nice to have that one to one option. However, it’s no longer so cozy – I was told the agent now only acts as an intermediary?? Was transferred to a Claims Dept. and then assigned a Claims Adjuster. Had to open an account through their portal. Then only to find out they outsourced claims of our nature to another Insurance Co., Hartford Steam Boiler. Our main sewer line broke because of tree root damage. What a mess. We had raw sewerage in our basement and also involved a Restoration Company because of sanitation issues.
The whole project including restoration cost close to $18,000. We only recouped $5959. We decided to have the tree taken down – that was another $1,800. because since it was on our front lawn we also had to have the stump ground.
Andrew, here’s an update. The last time I shopped for insurance–which was actually four years ago–I followed Clark Howard’s advice and included Amica in the search. I was very impressed with the rep that wrote up the quote. She worked with me like the independent agents I once used. When the underwriter had a question about service from our fire department, she passed along information from me from a map app that showed our rural fire station a half mile up the road from my house. I kept her contact information. She didn’t know it at the time, but she became my personal insurance agent.
That’s a long intro to the purpose of my post, which is to tell you I chose a dividend policy, which costs more up front, but may return a portion of the premium each year. In Georgia this year, the auto policy returned none, the homeowners 15% and the umbrella 20%. That equaled a good savings, and it’s a quality company.
Edit: The linked article says Amica includes a loyalty discount after two years.
Ed, thanks for the update. I’ll look into Amica.
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.
We have used a local independent insurance agent since we built our retirement home in a new town eight years ago. We asked our realtor who she used. The owner is the only agent in the office and he has always been very responsive. Unfortunately we had $20K in water damage from poor construction technique a few years ago and he walked us through until completion of the project. I ask him to research new policies every few years. We have insurance through two different companies for our auto, and homeowners/umbrella policies so I think he’s done his research.
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.
I’ll admit that one reason I’m inclined to stay with our current insurer is that they were pretty fair and easy to work with some years ago when we had a major claim.
That said, the comment and link below about “price optimization” makes me awfully curious if I’m on the receiving end of that with my company.
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…
Kathy, you had mentioned you were with Erie before. They do have a superior rating, but only operate in 12 states, and D.C. Texas is not one of them. I believe Andrew mentioned he lives there.
Based on their good reviews I was interested in learning more, but they don’t operate in my state either
Sorry to hear that, Marjorie. News to me…
“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
Thanks for the link to that fascinating, and somewhat horrifying, article. I confess I’d never heard of “price optimization” in the insurance industry. Egads….
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.
Any idea of the reason why they don’t/can’t share it?
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.
Thanks, Marjorie. Very helpful.
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…..
Wonderful detail. Thank you!
Thanks for your very detailed and informed reply.
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.
Ed, I fear you’re right but I’m being a little lazy and perhaps looking for a reason to avoid that onerous process right now.
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.
Ed, that’s very interesting and is exactly what I go through every few months with the cable co. I had no idea it might work with insurance companies. If I have any luck I’ll post about it. Thanks.
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.
David, yes, we use an independent agent who theoretically gets us the best deal. But of course they only deal with certain companies. I will ask them my question as well.
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.
How different it is when we talk about health “insurance.”
Mark, thanks for your comments. I do prefer to stay with a large solvent company.
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.
Thanks, Dan. Sounds like my cable co.— great deals for new customers but not for longtime loyal ones.