Commuting - Car insurance?

I just started a new job and will be moving within a month to the new town. I'll be living within 3 miles of my job, and plan to commute by bike, with the bus as backup for nasty days as necessary. I proudly called my car insurance carrier yesterday to inform them that I will no longer be using my car for commuting, and was hoping that my insurance would go down accordingly. It did go down.... an amazing $11 per six months. So instead of paying $450, I'll be paying $440. Even the insurance agent sounded surprised that it went down so little.

From all that I've read about the "true cost" of owning a car, I had hoped that some of those costs would go down once I started using it less. Now, gas and mileage will, but insurance costs me about $900 a year, and I was really hoping to change that. I guess I'll just have to content myself by watching gas prices go up in Maryland, knowing that soon I'll be immune to them.

My question.... have any of you experienced a similar disappointment in car insurance when you started commuting by bicycle? Would another insurance carrier offer more of a discount?

Thanks!

Teresa

I renewed my policies last November. They had almost trebeled in cost --I have never made a claim while with this company which is over 15 years. The excuse given for this gouging is 9-11. There were so many claims the insurance companies exhausted their reserves and are passing on the costs to us.

I checked with 4 different agents and each said essentially the same thing. (My original insurer was still cheaper, so I stayed with them, but with a higher deductable.)

The fixed costs of owning cars can be quite high, about £1000 pa in the UK. I rent vehicles when I need them, at my companies commercial rates.
Do make sure you have adaquate 3rd party insurance. Check that your car insurance covers you whilst you are riding.

Car insurance companies aren't interested in significantly rewarding people for reducing their car usage. Car insurance companies are, on the other hand, interested in trying to make as much money off of their customers as they possibly can. In Illinois, it's mandatory for car owners to have car insurance, and so the car insurance companies feel that they have the advantage over the car owners.

If you trade your car in for a car with a lower blue book value, you might be able to get a slightly better discount on your insurance, since the cost of replacing the car factors into the cost of insurance. (But check this out first with your insurance agent before you actually do this.) Other alternatives include putting the vehicle into long-term storage (I don't know what Maine has for insurance requirements for vehicles in storage.) Or, if circumstances allow it, sell your car and rent a car for occassions when you need one.

Originally posted by ViciousCycle
Car insurance companies aren't interested in significantly rewarding people for reducing their car usage.

Of course not. Who knows? You might discover that a car really isn't all that necessary, then where would they be. I say, shop around. Maybe tell another insurance company exactly what you are looking for and see if they can offer you what you want.

Hmmm... Insurance at $900/year? That's one more thing I don't have to waste money on.

Insurance Agents, Attorneys and Bankers all deserve each other

car insurance = legalized extortion.

Originally posted by Oscar
One can make an HONEST living in any of the above. Perhaps Retrolung has had experience with a dishonest person?
Perhaps in the latter two this is the case, but as far as insurance companies go, I have to side with Bob. If an honest person is happy working in the insurance 'industry', it's probably because they don't understand the nature of their business.

The only reason it can't be called organised crime is because it has been made legal. The fact that it's not only legal, but in many cases mandatory only shows how deep the rot goes.

Originally posted by Allister
The only reason it can't be called organised crime is because it has been made legal. The fact that it's not only legal, but in many cases mandatory only shows how deep the rot goes.

Mandatory? WTF??? I don't have car insurance.

Originally posted by Oscar
A man died an untimely death leaving a widow and three children. Fortunately, he had planned for this unlikely event by buying an inexpensive life insurance policy, and his widow received a $500,000 benefit tax-free.
$500,000? Inexpensive? It must have been a "term" policy, and he must have been relatively young.

A woman driving through an intersection in a carefully maintained, low mileage, 2 year old car is T-boned by someone who runs a red light. She, miraculously, is not hurt but the car is totaled. Victim has to fight tooth-and-nail just to get blue book (can you say State Farm)? And one wonders how the ambulance chasers stay in business.

A new home builder purchases a policy for coverage during construction, which will "convert" to homeowners after completion. Materials are stolen from the site. Are they covered? Noooo. What if somebody stole a washing machine? Only after it's been installed. Supposedly, if same materials had burned, they would have been covered. I'm glad I didn't have to find out. Since agent failed to explain "details," I asked for a copy of the policy, riders, etc., in hopes I could actually parse it and determine what I was getting. Regional orifice and local agent sent me back and forth for weeks before I ever got it (that would be Nationwide).

I don't even want to start with medical.

Nothing personal, Oscar, but can you see why people hold insurance companies in low regard? Not many of us have experience with the success stories, such as you cite... thanks for reminding us it's not all bad.

I don't really want to get into a whole debate about good vs. bad insurance agents, nor do I intend any disrespect to Oscar. My initial comment may have come off as rather abrupt and off the cuff, but I don't make such comments without some reasoning behind them. Perhaps I was a bit harsh with my estimation of the insurance industry in comparing it to legalised organised crime though.

In a way, Oscar has more or less confirmed my point. He is clearly an honest man making a living doing what he believes is helping people. With all due respect to Oscar, it's also clear that the deeper ramifications of the insurace industry have never entered his mind. I'm not saying this in an accusing way or anything. It's just another indication of how deeply ingrained the problem is. In fact, I suspect it's so deep that it's impossible to get rid of. In that case, I suppose I should be thankful that folks like Oscar are making the best of it they can.

Insurance is essentially gambling. While some people may think that gambling is a harmless entertainment, there is growing evidence that gambling can be as destructive as alcolholism or any other addiction. This is not something that we as a society should be encouraging. At an individual level, there may be the occasional 'winner', but overall, the odds are stacked well in favour of the house. The occasional winner only helps keep the punters hopes up and cash flowing.

We are sold on the idea that we need to have insurance 'just in case', and are told stories much like Oscar's to entice us with visions of riches. Once a policy is purchased we then need to keep renewing it every year, and at that point the insurance companies can pretty much charge whatever they like in the knowledge that the addicted punter will pay it out of the fear of being uninsured. Just look at what's happening with public liability insurance at the moment.

Now, where insurance differs from other forms of gambling is that in a very literal sense, it is gambling with people's lives. Take life insurance. The insurance company is betting that the policy holder won't die under certain conditions. This sounds reasonable. However, the punter is gambling that they will. Now, I don't know about you, but betting that something I hope never happens will doesn't sound very rational to me. Every time I pay a premium it's a reminder that the only way I can win this bet is by dying. This is the sort of thing that puts little black marks on the soul and build up over time to have a palpable effect on our emotional state. It might be subtle and barely noticed, but the effects of this should not be underestimated nor discarded as incinsequential.

The other thing is that it's a sure sign of a civilisation in decline. What it says is that the only way my loved ones will be looked after if I die, is to take out insurance and leave them with mere money to support them, and hope the company doesn't find a way not to pay (and you can be damn sure they'll look). Call me idealistic, but I thought the fundamental reason we all live together in cities and nations is TO HELP EACH OTHER OUT. To be ultra-idealistic that should be help each other without expectation of reward, but that's going too far. Insurance undermines this by essentially absolving us of this responsibility.

Of course, it's entirely possible that insurance became prevalent because of a lack of caring in the community rather than the other way around. I will grant you that.

The real problem here is the implied belief that any unfortunate event in our life can , if not fixed, at least be coped with by the mere application of sufficent amounts of money. Unfortunately, like a wise man once said 'money can't buy me love'.

As for car insurance. It's reasonable to me to conclude that drivers are not going to drive as cautiously if they believe that they personally won't be out of pocket very much in the event of a crash. For some reason paying thousands of dollars over several years is more acceptable than paying it out all at once. I believe that if there was no car insurance and we had to pay for the consequences of our actions directly out of our own wallet a) everyone would be driving a lot more carefully, and b)they'd more than likely be driving much smaller/cheaper cars, both things which I would have thought we as cyclists/advocates of a rational society would be very much in favour of.

Like I said earlier, the rot is so deep that I suspect it can't be removed without destroying the host, so I'm certainly not advocating any insurance agents on the forums should quit their jobs/slit their wrists or anything, just to think about what insurance is and what its effects are on society as a whole, and perhaps give their clients a more truthful appraisal of the products they are buying, and, god forbid, presenting the option of not having insurance (and it's consequences of course).

The current trend of ever increasing reliance on ever more expensive insurance, decreased personal responsibility, the fragmentation of society and the lack of care for our fellow Man is all interconnected and is only accelerating society's slide into the pit.

Sorry about the lengthy tirade. This is why I prefer pithy one liners.



ps. I'm currently in the market for a life insurance policy. <sigh> sometimes you just gotta go with the flow, even if it's heading for the pit of hell. I'm not a hypocrite, I'm a pragmatist.

Originally posted by Allister
so I'm certainly not advocating any insurance agents on the forums should quit their jobs/slit their wrists or anything, just to think about what insurance is and what its effects are on society as a whole, and perhaps give their clients a more truthful appraisal of the products they are buying, and, god forbid, presenting the option of not having insurance (and it's consequences of course).


Can you seriously think of any profession that takes this sort of responsible attitude though. Just from living on the Gold Coast, I see tour agencies ripping people off all the time by telling little white whoppers about the best place to shop. Lawyers hawk their services around to everybody, even in situations where their services are not needed or even wanted (I got an interesting e-mail from a local cyclist about this point last night). Accountants... well I better not say too much, lest I be out of a job next week.

The whole point is, why should it be any different for people selling insurance. Truth in advertising went out years ago and I think this is the root of the problem. To attempt to blame one profession is trying to oversimplify it too much.

Originally posted by Chris L


Mandatory? WTF??? I don't have car insurance.
There's a mandatory helmet law in Australia, yet millions of non-cyclists don't own a helmet. WTF (as you so eloquently put it) is that about?

Here's the one that really messes with my head. I recently got a mortgage for a house. If, for some reason, I can't make the payments and I lose the house, the bank 'requires' insurance for any difference between what they should have got if I had completed the contract (including interest - that other work of Satan's accountant) and what they actually get on sale of the house (I think that's how it works).

Bear in mind this is insurance for the bank - it offers no cover for me. The head spin is that rather than the bank paying for their own insurance, like everyone else in the universe does, I'm the one that has to pay it. We're talking about a $3000 policy here. All the banks do this, and since it is allowed to continue, apparently it is considered perfectly acceptable. If I want the mortgage, I have to pay it. If that's not extortion or downright robbery, what is?

Originally posted by Chris L


Can you seriously think of any profession that takes this sort of responsible attitude though. Just from living on the Gold Coast, I see tour agencies ripping people off all the time by telling little white whoppers about the best place to shop. Lawyers hawk their services around to everybody, even in situations where their services are not needed or even wanted (I got an interesting e-mail from a local cyclist about this point last night). Accountants... well I better not say too much, lest I be out of a job next week.

The whole point is, why should it be any different for people selling insurance. Truth in advertising went out years ago and I think this is the root of the problem. To attempt to blame one profession is trying to oversimplify it too much.

I was actually going to put in something regarding this very point, but I figured the post was getting long enough, and I didn't want to increase the scope of the thread beyond the original topic. You're right of course, the problem is endemic. However, to say that one doesn't need to act responsibly because no one else does is flawed logic at best.

Speaking of useless enterprises, don't get me started on the tourism 'industry'.

And don't be too down on accountants. Accountancy is merely a side effect of too many laws/lawyers, not really a cause of any problems itself.

Originally posted by Allister

There's a mandatory helmet law in Australia, yet millions of non-cyclists don't own a helmet. WTF (as you so eloquently put it) is that about?

That's my point exactly. It's not mandatory at all. If ya' don't wanna wear a helmet, don't. I decide I don't want to pay car insurance (or any of the other costs associated with a car), so I decide simply not to have one.


Originally posted by Allister
All the banks do this, and since it is allowed to continue, apparently it is considered perfectly acceptable. If I want the mortgage, I have to pay it. If that's not extortion or downright robbery, what is?

Why is it extortion? They offer a service (i.e. the loan) for a pre-determined price (i.e. the interest, insurance etc). They advertised a home loan and that's what they provide. You had the opportunity to opt out, but chose not to. No extortion about it. It's robbery if they offer you something, and don't deliver it when you pay for it.

Funny thing is, everybody complains about it, but if banks stopped lending people money, all the fees and charges would be forgotten in a real hurry. The same people would have something else to complain about.

edit: post deleted. Allister goes back to talking about bikes and general shooting the *****.

I have Allstate Insurance and when I am not using the car, I call to SUSPEND my coverage. This means NO COVERAGE AT ALL. The rate goes down from $1000/year to about $100/year. I have an older car with no lein on it. When I am going to drive the car again, I call Allstate and RE-ACTIVATE the coverage. Maybe you can cancel or suspend a portion of your coverage, like comprehensive and collison if you feel comfortable with that. Also, if you are taking the bus part of the time, check into your transit service, most work with the government, employers and private agencies to reimburse your cost of public transit. For me the challenge was geting my employer to participate, which never happened.

rhoderhage,

I like your idea about suspending coverage but I don't know if that would be allowed where I live. Missouri has a really dumb law that says if you go 28 days without car insurance (even if you don't own a car) then you have to pay the high-risk rate (drunk rate) when you get insurance again. Not sure if that would apply in this case, but it might. Insurance companies will try anything.