Customer retention is absolutely important for those insurance agencies that have long term profit goals says the report given by JD power and associates.

The report showed that 30% of the households who earned less than $50,000 opted for new insurance carriers in the past year and almost 45% of the customers changed their carriers. And 26% of the households, those that earned more than $100,000 opted to buy new carriers leaving just 31% of them actually switching!

As 90% of the customers stayed back with their original carriers in the past year, those families that are more affected due to recession are a big challenge to retain for the insurers. Some of the insurers have somehow managed to increase the number of their customers in this difficult economic environment; this comes at the cost of other insurers of the auto insurance market in the US.

Amongst those customers who bring together many insurance products, the rates for retention is high shows the report.

The average rates for retention is 95%, those who bring together auto and home policies with the original carrier and it rates 92% for those who bring rental and auto policies together. And the customers who use just one policy at a time get average rates of 83% and 85% for those who don’t combine their auto and home insurances together.

Improving their retention by at least a percent for any of the largest us insurers can generate millions of dollars over the time period, so the slight differences in the rates of retention will have a big impact after a period of time. Innovating policies and satisfying customers would bring about huge incentives for the carriers.

The report shows that many variances are found between the various groups of demographic groups.

Different lifestyles and needs for insurance can be indicated through the differences shown in demographic groups. To retain customers it is important to tailor the products provided based on the different demographics of people instead of keeping just on size for all says bowler, the senior officer of JD power. More than 30 insurance carriers are evaluated but the surveys of the personal insurance retention report that researches on 275,000 customers holding auto insurance. Even all state, farmers, American families, progressive, state farm etc. are being evaluated.

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Some insurance companies or firms offer a type of coverage especially designed for female drivers. Women can avail of this type of coverage and pay lesser premium fees and other expenses. Although this is basically the same as any other car insurance policy, the difference lies on the fact that female drivers are generally known to be involved in less risk than men.

The business of insurance is grounded on risk-taking. If there is a risk, there is insurable interest. If a risk causes loss, an insurer pays up. If a risk does not take place, an insurer gets to keep premiums. Whenever there is a claim made by a client, a company tries to compute how much they are going to lose if they pay the claim. Now, this would depend on risks involved. Insurance companies would often adjust the amount of premiums that will enable them to conveniently make a justified payment without losing profit. Getting to know their clients and finding out who among them poses the highest risk – thus highest expense – is a key strategy in making sure that they will not go bankrupt.

Statistics show that a majority of road accidents have been caused by young and inexperienced drivers, most of them male. This same data shows that women, whether young or otherwise, have been involved in fewer accidents than men. Add this to the fact that there are usually more women than men in the outdoor population. This results in men being required to pay higher premiums. Women are allowed to pay lesser amounts because a company expects to make a profit because there is practically no risk involved. Even if women drivers do get involved in accidents, the amount of claims will almost never surpass the amount of profits.

This is also a reason why insurance companies have been aggressive in selling policies to women drivers. They have to compensate for losses they experienced in paying off claims involving accidents caused by men. It becomes a norm to expect that women are low-risk policy holders. The present trend has evolved to design insurance programs solely for women drivers – one with sufficient coverage albeit a lower rate of premium.

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Direct General Insurance Agency Inc., which provides coverage in the state under the Florida No-Fault and Cash Register brands, closed nine retail stores this week causing disappointment among policy holders. They closed five offices in Tampa, one in West Palm Beach, another one in Fort Myers, and two in Miami.

A company spokeswoman says it is no longer writing new car policies in those areas. But she assures current policy holders that they will not be dropped and will continue to receive coverage until their policy expires.

The spokeswoman explained that the company has to close offices because of undergoing fraud investigation. She declined to give details but says they are working with criminal investigators because their company has been acquiring extraordinary levels of losses which are probably caused by fraudulent activities.

Customers expressed frustration over the news because they were not notified about the changes.
However, state law does not require an insurer to notify regulators or policy holders unless they complete stop operation or unless they drop 1,000 policies. Closing offices do not require notification, legal experts add.

Althea, a Tampa car owner, reported that she showed up last Friday with her monthly payment only to find out that the doors to Florida No-Fault Insurance Agency were barred. They only found a sign and a phone number taped to the door.

Customers who dial the number hear a recorded message from the other end saying that the insurer is no longer accepting new policies in the area because of present conditions in Florida.
Althea said she really needed an affordable coverage for her car since she is a single parent and makes minimum wage.

The company spokeswoman tells policy holders that the closing is temporary and they intend to resume operation immediately after the case is resolved.

But car owners said there are not too many options left for them who do not have a credit card. They explained that is part of the reason why they chose No-Fault. Drivers who do not have a debit or credit card cannot pay online or through phone so they have to hand-carry their payment to company offices.
Motorists who have been with the company for years said they are worried about what will happen when their policy expires.

The company says it will continue to write policies in areas that are not affected by the changes.

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Currently, the law provides insurance providers the prerogative to give their policyholders a discount for having a continued auto insurance coverage from their company. This is otherwise known as the loyalty discount. However, as the name implies, this discount will not be applicable once the customer decides to switch from one provider to another.

The modification gives rise to the Continuous Coverage Auto Insurance Discount Act, which will guarantee drivers a fixed discount on their automobile insurance, even if they do not decide to maintain under a certain company and transfer their coverage to another insurance provider. The question here are the beneficiaries. Definitely, it will be the consumers. Statistics show that about eighty-two percent of drivers from California have auto insurance that is required by the law. The people here come from a variety of groups like single parents, elderly, working families, and young drivers.

If allowed to offer the same kind of discounts to all policyholders, the insurance companies can make the nature of the auto insurance market more competitive. To keep the flow of new policyholders going, the different insurance providers would have to lower the prices of their premiums. In addition, this will also have to include a better plan and coverage with added improvements in customer service.

In fact, California is lagging behind in terms of this law. Several other states actually allow different insurance companies to offer this kind of discount to those prospective policyholders or those already with the company beforehand. Included in the areas that support this kind of law are New York, Texas, Oregon, Florida, Washington, and several other more.

Insurance companies will also be required to maintain the main basis by which insurance rates are determined. These are the safety record of the driver, annual mileage, and experience. In addition, the older discounts such as the student discounts and good driver discounts will continue to be in effect.

Several organizations are rallying this change. Such organizations like Consumers Coalition of California, California Alliance for Consumer Protection, and California Black Chamber of Commerce to name a few are supporting it. Ultimately, it will result to lower prices for everyone.

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A recent survey reveals that in general, people are driving less which normally means fewer car accidents and injuries. With skyrocketing prices of gasoline, people are continually finding ways to save on gas like the invention of hybrid cars. People are now using public transportation systems or combining trips and car pooling instead of driving. All of these mean lesser cars, lesser mileage, lesser accidents and lesser insurance premiums. When people drive less, they will be in a lesser number of accidents which means lesser injuries and lesser injury payments. This is one of the reasons why more insurance providers give lower premiums for less mileage. So drive less, for more insurance premium discounts!

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“GEICO is pleased to release a new rating plan that will offer the opportunity for millions of Michigan drivers to compare and save on their auto insurance premiums,” said Mary Zarcone, regional vice president of GEICO’s Midwest operations. “As one of the largest and fastest growing auto insurance companies in the Unites States, GEICO stands ready to meet the insurance needs of the good people of Michigan.”

Zarcone continued, “In addition, we are introducing a number of new discounts with the plan that rewards good drivers. Simply go to www.geico.com to obtain a free rate quote.”

The changes will go into effect on July 3 for new policyholders and Oct. 1 for renewal policies.

Overall premium changes for individual motorists will vary based upon factors such as coverages purchased, geographic area, type of vehicle, risk characteristics, and other discounts for which they qualify.

GEICO (Government Employees Insurance Company) is the fourth-largest private passenger auto insurer in the United States. It provides auto insurance coverage for more than 8 million policyholders and insures more than 13 million vehicles. In addition to auto insurance, GEICO offers customers insurance products for their motorcycles, all-terrain vehicles (ATV’s), boats, homes, apartments and mobile homes. Personal umbrella protection and life insurance are also available. As a member of the Berkshire Hathaway group of companies, GEICO is rated A++ for financial stability by A.M. Best Company and ranks at the top of several national customer satisfaction surveys. For more information, go to http://www.geico.com.

Contact:

GEICO Communications
301-986-3271

Source: GEICO

We suggest three common methods to communicate your car insurance company. Of course, your possibilities might change depending on the predilection of your insurer.

1. As always, you can contact with your car insurance company via telephone. If you wish to talk with a live representative and have questions that have to be replied immediately, this is your best choice. Depending upon the company that you purchase from, you may phone a local agent or a main office.
2. Email is a very popular way to communicate with insurance companies. If you are not in a hurry, this is something that you should look at. In most instances, you will receive an email reply from your car insurance company within one day. For any troubles or worries that are not pressing, this should work to your advantage so that you do not have to waste your time on the phone.
3. Although live chat has not become so popular yet, it is a very good way to communicate with your car insurance company. It gives you the possibility to talk with an agent or representative live via the internet. In general speaking, this is the same as a telephone conversation. The difference is that you will be typing and reading unlike speaking.

Now that you know which communication ways are available, you should be able to easily contact your car insurance company the next time you have to do so.