Customer Loyalty-what is It Worth?

[Kennyboy]

I have my homeowners and umbrella liability policy with Erie and have been insured with Erie for over twenty years. I have filed only a very small claim years ago after a hurricane. Erie does not have a separate percentage deductible in my state (VA) for hurricanes so it is to my advantage to keep my homeowners policy with them. I have insured my autos with Liberty Mutual since 1977! I am a safe driver and last had an an accident in the early 1990s. No recent moving violations to speak of. I can save nearly $300 by bundling all my policies with Erie. This seems like a no brainer but I must insure with them for three years to earn accident forgiveness (Liberty forgives one accident.) and while surely I have earned some goodwill with Erie for having insured my home with them for over two decades, I would be a new auto insurance customer. Bottom line is whether my "goodwill" (an intangible benefit, for certain) earned from having insured my autos with Liberty for nearly four decades is worth a price premium of nearly $300 a year. Can someone in the industry offer an opinion from experience? I am the sole person on all my policies.

 

[INSUREGEEK]

It's a real balancing act for the carrier:

Carriers do love loyal customers. That's why you see things like accident forgiveness and vanishing deductibles. They want you to stick around.

However, they also need the cash flow they get from writing new policies. That's why you see new discount offers, people shopping rates and switching carriers, and a slew of creative ads everywhere.

The danger you face is that the rates go up after year one and/or you find yourself paying more for 'less' than you had with LM because you'll lose the accident forgiveness.

I would make the switch and bank the $300 savings in case the rates do increase next year or the year after. This assuming that the Erie agent has carefully reviewed the LM policy and advised you of any other differences between the two.

 

[Kennyboy]

It's a real balancing act for the carrier:

Carriers do love loyal customers. That's why you see things like accident forgiveness and vanishing deductibles. They want you to stick around.

However, they also need the cash flow they get from writing new policies. That's why you see new discount offers, people shopping rates and switching carriers, and a slew of creative ads everywhere.

The danger you face is that the rates go up after year one and/or you find yourself paying more for 'less' than you had with LM because you'll lose the accident forgiveness.

I would make the switch and bank the $300 savings in case the rates do increase next year or the year after. This assuming that the Erie agent has carefully reviewed the LM policy and advised you of any other differences between the two.

Thanks for your input. I made the decision last evening to consolidate all my policies with Erie. I am awaiting approval of my auto insurance application. I elected to go with their rate lock which will protect me from a rate increase for three years if I maintain my current residence and both vehicles.

 

[nyc2phi]

Thanks for your input. I made the decision last evening to consolidate all my policies with Erie. I am awaiting approval of my auto insurance application. I elected to go with their rate lock which will protect me from a rate increase for three years if I maintain my current residence and both vehicles.

It's a good choice. You're rates won't go up with Rate Protect! Also ask about the diminishing deductible with Erie if you have full coverage on your car. It's only a one year charge of $30 and your deductible will decrease by $100 each year!