Auto Insurance Informative - Can an insurance company charge you one rate for 6 months and then increase the rate for the second 6 months?

Review by Not for the narrow minded on 2008-04-03
CALIFORNIA -- Can an insurance company charge you one rate with certain discounts for 6 months, and then when renewing for the second 6 months, even though nothing has changed at all, they increase the rate? My insurance company is now telling me that they are charging me $25 per month extra now because I was receiving the good driver discount but they have realized I have a speeding ticket so I should not get the discount? I have had that ticket since day 1.

Maybe I would have chosen another company if I would have known that this was the rate I would be paying. But they had the lowest rate (at first.) Now they are not my best choice.

Please advise.
Comments:32 Replies - Latest reply on 2008-04-09
Posted by Sparticus on 2008-04-03:
I'm pretty sure it is within their right. At least they waited until your policy renewed... that was polite... ;-)

If you think you are paying too much, definitely shop around. Perhaps another company would gladly have your business for $25 less a month.
Posted by GothicSmurf on 2008-04-03:
Yes. Perhaps the ticket did not show when they ran your drivers license the first time. Insurance companies can and do periodically run driving reports.

Also, when going for the cheapest rate, you're usually getting the cheapest service.

Posted by Principissa on 2008-04-03:
Our insurance company USAA does annual reports on your driving record. It should say in the policy itself that they do this periodically and that any tickets and/or accidents that cause points on your license will affect your rate. Once you received that speeding ticket, you no longer fell under the good driver discount, because no offense, getting a speeding ticket, isn't good or safe driving.
Posted by jenjenn on 2008-04-03:
Yes, it is likely the ticket did not show up on your driving record initially. Shop around...check out Travelers. They rock!
Posted by Anonymous on 2008-04-03:
Actually, the company was pretty generous with you. 1) They did not rate up the policy until time for renewal, and 2) they could have cancelled your policy because they could assert that you 'withheld information' on your application.

I know you are disappointed. But, what was done to you is standard practice. Actually, I am surprised that the premium went up by ONLY $25. Many companies will raise the premium by up to 50% for ONE ticket...especially if the policy premium was dependent upon a good driver discount.
Posted by Not for the narrow minded on 2008-04-03:
It was not dependant on a good driver discount and I did not withhold any information. I bought it through a broker, what they do to get me that rate is beyond my control. When they tell me it will cost XX amount of dollars, and it's the best price, of course I am going to go with it. I'm just wondering if this is some sort of "bait and switch" type thing going on here. I, mean, didn't the insurance company run my drivers license when they sold the policy? That doesn't make sense.
Posted by Anonymous on 2008-04-03:
"...insurance company is now telling me that they are charging me $25 per month extra now because I was receiving the good driver discount...". AND "...they have realized I have a speeding ticket so I should not get the discount..." AND "I have had that ticket since day 1."

Just trying to help you, poster. Your rate was determined under a good driver discount. The insurance company found a ticket (either you told them or they found out later...it can take weeks for some states to report tickets). You lost the good driver discount and it will cost you $25 more. Understand? There is NO BAIT AND SWITCH. The concept does not apply here. Nobody is taking advantage of you...drivers with no tickets get better rates. They simply found your ticket and declined the better rate. The ticket may have been there 'since day one'...they did not base the rate on the ticket until your policy renewed. I still say they are being more than generous with you. If you don't understand this, I suggest that you make an appointment with your agent to have it detailed in a way you can understand. Good luck.
Posted by Not for the narrow minded on 2008-04-03:
So, what you are saying is that it's okay to quote a person one price but charge them another? What you don't seem to grasp is that when you first get insurance they make you pay an amount that of which is larger than you usual monthly payment. So, if you don't have alot of MONEY then you are pretty much stuck with that company for awhile. Unless you can come up with the extra funds AGAIN to purchase a new policy. I gave them all of my information when I purchased it and can reasonably expect that the amount I am quoted is the amount I should pay. Now if I had received the speeding ticket AFTER I purchased the policy and then they raised my rates THEN that would be FAIR. However this is not the case.
Please note that I am giving the insurance company the benefit of the doubt in the sense that I have not released the name of the company yet. I am hoping when I speak with them that they will change it back to the original rate because otherwise I already got a quote from another company that is $5 less than what I was paying. I just don't want to have to switch and come up with that extra money.
I have never, not in 21 years of driving, made any kind of claim to an insurance company. Nor have I ever had an accident. I got an A in driver's ed, which I took for an entire semester. I don't know anyone that can claim that they have never broken the law while driving. I let the insurance company debit my checking account for prompt payment. I agree, speeding is dangerous. I went to traffic school but the court would not accept the course I took even though it was as good as any, if not better.
So in a nutshell, I am not trying to "con" them into any kind of scam. I just don't think they should raise your rates when absolutely NOTHING HAS CHANGED since I purchased the policy. Is it my fault they did not run a check on my driver's license? No. Would I have continued to shop around if I had known the rate was actually 145/month instead of 120? Yes. You better believe I would.
Posted by GothicSmurf on 2008-04-03:
If you got the ticket with in about 30 days of the policy, it won't show on your DL. It's not a bait and switch at all. You had a ticket and weren't being charged for it. Now you are. Plain and simple.
Posted by Anonymous on 2008-04-03:
Your quote was for a six month term, and your price stayed the same for that six month period of time. With that said, they did not quote you one price and then charge you another. It's time to renew now, and they can adjust the policy premium now that the initial term covered by the original price quote is over.
Posted by Starlord on 2008-04-03:
Ghost and Smurf are telling you the truth. If you choose to ignore that and live in your little dream world where tickets cannot negate a good driver discount, then tell a guy on a corner with a 'Will Work for Food' sign. we are trying to help you understand that the increase is the result of a ticket that you got. This disqualifies you for the good driver discount. I wish people wouild learn exactly waht 'bait and switch' really means. People throw it around and I have yet to see more than a handful of people use the term correctly.
Posted by Not for the narrow minded on 2008-04-04:
So, what you are saying is that it's okay to quote a person one price but charge them another? What you don't seem to grasp is that when you first get insurance they make you pay an amount that of which is larger than you usual monthly payment. So, if you don't have alot of MONEY then you are pretty much stuck with that company for awhile. Unless you can come up with the extra funds AGAIN to purchase a new policy. I gave them all of my information when I purchased it and can reasonably expect that the amount I am quoted is the amount I should pay. Now if I had received the speeding ticket AFTER I purchased the policy and then they raised my rates THEN that would be FAIR. However this is not the case.
Please note that I am giving the insurance company the benefit of the doubt in the sense that I have not released the name of the company yet. I am hoping when I speak with them that they will change it back to the original rate because otherwise I already got a quote from another company that is $5 less than what I was paying. I just don't want to have to switch and come up with that extra money.
I have never, not in 21 years of driving, made any kind of claim to an insurance company. Nor have I ever had an accident. I got an A in driver's ed, which I took for an entire semester. I don't know anyone that can claim that they have never broken the law while driving. I let the insurance company debit my checking account for prompt payment. I agree, speeding is dangerous. I went to traffic school but the court would not accept the course I took even though it was as good as any, if not better.
So in a nutshell, I am not trying to "con" them into any kind of scam. I just don't think they should raise your rates when absolutely NOTHING HAS CHANGED since I purchased the policy. Is it my fault they did not run a check on my driver's license? No. Would I have continued to shop around if I had known the rate was actually 145/month instead of 120? Yes. You better believe I would.
Posted by Not for the narrow minded on 2008-04-04:
"Ghost and Smurf are telling you the truth. If you choose to ignore that and live in your little dream world where tickets cannot negate a good driver discount, then tell a guy on a corner with a 'Will Work for Food' sign. we are trying to help you understand that the increase is the result of a ticket that you got. This disqualifies you for the good driver discount. I wish people wouild learn exactly waht 'bait and switch' really means. People throw it around and I have yet to see more than a handful of people use the term correctly."
I'm sorry, you are not trying to help me by treating me like I am some kind of idiot. WHAT PART OF THIS DON'T YOU GUYS UNDERSTAND? It's real simple...I HAD THE TICKET, I DIDN'T LIE ABOUT IT, I NEVER ASKED FOR THE DISCOUNT, I ASKED FOR THE BEST PRICE AND THAT IS WHAT I GOT. The ticket was NOT new so it was definetely on my record. Do you even read my posts or what?
Posted by jenjenn on 2008-04-04:
Well NFTNM - if the shoe fits!! YOU are CLEARLY not the one getting it. You were quoted a price...a price that was good for the duration of your policy, which you indicated was 6 months. You were quoted a price for a policy for insurance coverage according to the driving record when the policy was initiated. IT CHANGED...therefore your POLICY CHANGED. It's pretty freakin clear to EVERYBODY HERE...well, with the exception of YOU.
Posted by Principissa on 2008-04-04:
jen, I gave up when I read the responses. It's pretty much written in black and white in the policy NFTNM signed. You know the one stating that he understood the terms and conditions of the policy. As I said, my company does it annually, which is basically every renewal period. Why should I get a good driver discount if I am not a good driver? Six months prior the ticket wasn't there, he admits it. Why should he receive a discount that doesn't apply to him? Apparently Narrow Minded, is just that, narrow minded.
Posted by Anonymous on 2008-04-04:
This tactic is not uncommon, especially for young drivers. A lot of cheap insurance companies bring you in with a low rate, and then raise it upon renewal. Is it right? No - but it is the way they do business. It sounds to me like they are just using the ticket as an excuse, especially since you told them upfront about it and have not received a ticket since. Keep shopping around if you want the low rates, and expect to change it upon renewal.
Posted by jenjenn on 2008-04-04:
Yes Princi...the name sure fits!!!

cherpep - I'm not such a young driver anymore, but I've never had that happen to me before.
Posted by Anonymous on 2008-04-04:
This definitely was my experience when I first started paying insurance. My driving record was clean. I was on a limited, college student budget, driving around a very used car. I just wanted minimum coverage. I would shop around and get the lowest rate possible. At renewal, the rate would increase, I would shop around again. I just wanted the cheapest rate possible. This is no longer necessary - partly because I am no longer a new driver, but also because I have combined discounts with life, home, yadayadayada. Recently, I've witnessed my father-in-law experiencing the rate increasing thing. Perhaps this also happens with senior drivers?
Posted by Principissa on 2008-04-04:
I must be lucky, our car insurance hasn't gone up a cent in 7 years. It actually dropped 10% when my husband turned 25 and just this year went down another 10% because neither one of us has had a ticket or filed a claim.
Posted by DebtorBasher on 2008-04-04:
Same here Princi...I have StateFarm and the only changes have been decreases.
Posted by Principissa on 2008-04-04:
DB we have USAA for homeowners and car insurance so we get a multi-vehicle discount, another discount for having two policies, and then all the other ones above for safe driving and no claims. We even got a 2 checks for 75.00 each when we sent them a copy of the receipt for the new boosters we bought the kids.
Posted by DebtorBasher on 2008-04-04:
Sounds good Princi...I also have my Renter's insurance on my policy. When I paid my insurance in Jaunuary, I paid it for the year just to get that out of my way each month you never know what may come up in the future, so that's why I paid in advance.
Posted by GothicSmurf on 2008-04-04:
Cherpep-

Sometimes it takes a while for tickets to show up in driving records. So while he may have had the ticket for a month, it might not have shown on his record. That's very common actually.

Insurance rates increase all the time for "no reason" when there is a reason- cost of living, inflation, etc.

Just be happy the insurance company didn't charge your retroactively.
Posted by Anonymous on 2008-04-04:
Try to look at it this way:

Caught up in a whirlwind cant catch my breath
Knee deep in hot water broke out in a cold sweat
Cant catch a turtle in this rat race
Feels like Im losin time at a breakneck pace

Afraid of my own shadow in the face of grace
Heart full of darkness spotlight on my face
There was love all around me but I was lookin for revenge
Thank God it never found me would have been the end

(I was) walkin the tightrope steppin on my friends
Walkin the tightrope (it) was a shame and a sin
Walkin the tightrope between wrong and right
Walkin the tightrope both day and night

Lookin back in front of me in the mirrors a grin
Through eyes of love I see Im really lookin at a friend
Weve all had our problems thats the way life is
My heart goes out to others who are there to make amends
Posted by MRM on 2008-04-04:
The song title and the artist please...
Posted by Anonymous on 2008-04-04:
The poster pleads "Please advise". Based on the poster's further comments, I believe "Please agree" was sought. Good luck, poster. We tried.
Posted by Anonymous on 2008-04-04:
Sorry MRM, Stevie Ray Vaughan › Tightrope
Posted by Not for the narrow minded on 2008-04-06:
For the 10th time, I HAD THE TICKET FOR PROBABLY A YEAR BEFORE I GOT THIS POLICY. I don't know how many times I need to explain that. I did NOT ASK for that discount. Is it my job to know exactly how they apply their discounts? Again, you all are missing the point. There is absolutely no reason the rate should have gone up when nothing is any different than before. If anything is should have gone down since I have paid on time everytime.
And for mr. tightrope-i-think-i'm-so-clever i have one question, where do you live? IN Nebraska? Because I live in the BAY AREA and if you haven't noticed, gas is $3.87 to $4.25 a gallon here. And the average rent for a one bedroom apartment that is halfway decent is $1000.00 month. I'm sure the insurance is also more expensive. Everything is expensive here and I work hard for my money. So if I want to shop around for the lowest rate, there is nothing wrong with that. Is there? And if I am quoted a rate, it it unreasonable to expect to pay that rate? I'm sorry, Mommy and Daddy don't pay my bills. They never have. And I don't "sponge" off people for anything either so you can insult me if you wish but please get your facts and information straight before you do. I think you guys are the ones who don't get it, not me. I'll switch insurance companies all day long if they are going to give me a better rate. I would love to stay with one for a long time, but like I said, why give more money than necessary for something I have never used nor take advantage of.
Posted by Anonymous on 2008-04-06:
Your policy and the price quote was good for six months. The policy is then up for renwal. While you already had the ticket it did not show up when the insurance ran your record. The ticket is now noted by the insurance carrier. Your policy price goes up. If you feel like you have been wronged and that you have a case, submit it to the California Insurance commission. See what they have to say. If you want a price to stay the same for longer than 6 months you may want to get a 12 month policy.
Posted by Slimjim on 2008-04-06:
Simple solution. You had a 6 month policy which is expiring. If this $25 a month increase due to discovery puts them higher than another choice as you say, simply sign up with the lowest priced insurer. If you waiting for someone to tell you they have to renew a policy at a certain rate as some loophole because they sold it too low the first time around, it's not going to happen in practice.
Posted by CrazyRedHead on 2008-04-09:
Sorry dude, this is not bait and switch. I do believe it is within there right to raise there rates. They may have just missed it the first time, which is on them, they lost out. Now that they have found it they raised you. I know it stinks. My hubby got two speeding tickets and Geico dropped him like a hot potato, they never even tried to raise his payments. I have never had a claim or an incident with them, or the ones were with now, ever. Although it is your right and decision to go with someone else, compare your current insurance with whatever company you might have in mind and determine if it is worth it, besides saving $5.. I hope you find the best for your money, good luck.
Posted by Principissa on 2008-04-09:
Red, Geico did the same thing to my sister. She got 2 tickets within 3 months of each other, one for running a stop sign, which was actually dropped because the cop admitted he saw her stop but didn't think she stopped long enough, and the other for doing 45 in a 35. Geico didn't care that the first ticket got dropped, didn't even try to raise her premium just dropped her the same way they did your husband. She's will State Farm now and so far she is happy with them, and her premium didn't go up because of the tickets.

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