My Car Insurance Renewal Jumped. Who Can Compare Better Options in Des Moines?

Mike Downer: Hello, everybody. I’m your host, Mike Downer, and welcome to Fully Covered. Do you want cheap insurance, or do you just want to be insured?

I’m here with the gentlemen from Absolute Insurance Agency. I’ve got Jeff Eastvold, who is the founder and president of Absolute, as well as his vice president, Dan Bell. How are we doing today, gentlemen?

Jeff Eastvold: Doing great. Great day to be alive.

Dan Bell: How are you doing?

Mike Downer: I’m doing awesome. It is so nice outside. It’s a little bit warm, but that’s okay.

Jeff Eastvold: It is a little warm, but you know what? In a few months, we’re going to be complaining about how cold it is. So I’ll just take it, smile, and wave.

Dan Bell: My son moved back in, and he mows the yard, so I don’t care.

Mike Downer: There you go. And it’s almost fall. I can smell it in the air.

Jeff Eastvold: It’s out there in the morning. We had it at the beginning of the week—or the end of last week, rather—so I’m pretty happy.

Mike Downer: Well, with winter coming up, you definitely want to make sure your car is insured because that’s when all the accidents happen, when people start slipping and sliding around.

Today, we’re going to talk about what happens when your car insurance renewal jumps and who can compare better options in Des Moines. Everybody gets that sticker shock when they receive that bill in the mail and think, “Oh my gosh, it was this, and now it’s this.”

So, let’s jump right into it. If a Des Moines driver opens a renewal that’s several hundred dollars higher, who do they call?

Dan Bell: That’s easy. Call Absolute Insurance Agency in Clive.

Jeff Eastvold: Absolutely.

Mike Downer: Very good. So why would someone want to call an insurance agent rather than just jump on a computer and start doing whatever computer insurance things do now?

Jeff Eastvold: It’s the same reason I don’t do my own taxes. I’m not an expert in that field. I want to contact people who know what they’re doing and who are going to make sure they have my best interests in mind.

Dan Bell: Also, when you call Absolute Insurance Agency, we can broadcast your information across different carriers because we’re not a captive carrier. We’re an independent agency, so we work with multiple companies that each have different niches that may suit your needs better than what you’ll find online.

We also have the experience to know why you may need higher liability limits, what deductibles may be the best price point for your budget, and things of that nature.

When you get those renewals, we want to look at them too. Why did it go up several hundred dollars? What was the catalyst? Was it an event? An event could be adding a youthful operator. That’s a life-changing event. Or perhaps you had an accident, several tickets, or something else that created the increase. We can work through that as well and see if we can save you money.

Jeff Eastvold: It could also be that the carrier just took drastic rate increases.

Dan Bell: Exactly. It could be that too.

Mike Downer: You guys are talking about life events, but let me ask you this: Why have Iowa auto rates gone up even for drivers with clean driving records? What has happened lately that has made insurance rates go up?

Jeff Eastvold: The long and short of it is that accidents are happening more frequently. That’s part of it. There are multiple parts to this equation.

You have more distracted driving occurring. Then add in the fact that, if you’ve tried to buy a vehicle lately, the costs are mind-blowing. I have a soon-to-be driver, and trying to find a used vehicle at a reasonable cost is difficult. “Reasonable” isn’t even in the vocabulary anymore.

Dan Bell: No.

Jeff Eastvold: Everything is expensive. As vehicles have become safer, the safety features being added to them have also increased the cost of the vehicles. Repair costs, parts, and labor have all gone up.

You add in inflation and the fact that these systems are holistic systems. When they get damaged, they often need to repair the entire system instead of fixing individual pieces. That causes a spike in repair costs, and all of that trickles down to us as consumers, whether we’ve had an accident or not.

If we’ve had an accident, we understand that our rates are going to go up. But if you haven’t had an accident, you may ask, “Why did my rate go up?” Well, it’s because of all of those things.

Mike Downer: I remember doing a very brief stint in customer service at an insurance agency years ago. When they trained us, they said to think about insurance like a great big swimming pool.

If you have a hundred people in the swimming pool and everyone is dipping buckets of water out of it, that water represents the money needed to pay claims. If fifty people are taking water out, it becomes everybody’s responsibility to fill it back up. Even the people who aren’t taking water out have to help fill it up too.

That was something I learned. If there are a lot of accidents, costs are going up, and people are taking buckets out of the pool, everyone has to help refill it.

Jeff Eastvold: That’s a great analogy because that’s essentially what insurance is. When you buy or pay for a policy through a carrier, you’re matching your risk profile with other risk profiles.

If you’re in there with a bunch of bad drivers and you’re the good driver, it’s not your fault, but the rates are going up because the carrier’s loss experience has increased.

That’s where people need to reach out to us and do some competitive shopping. Carriers change. The carrier that might have had the best price eight years ago may not anymore. Insurance companies make mistakes like every other business. They may underprice themselves, get behind, and then take aggressive rate increases to catch up or make up for it.

That’s why our model of representing multiple companies has always made sense. Things change.

Mike Downer: So if you happen to be with Company A and Company A had a ton of accidents and claims, but Company B didn’t have as many, you might be better off going with Company B because, like you said, you’re in the pool where fewer people are dipping out of that bucket. Is that true?

Jeff Eastvold: Yes. That’s the nuts and bolts of it right there.

Dan Bell: One hundred percent accurate.

Mike Downer: Let’s say I get that bill and think, “Oh my gosh, here we go. Time to look around.” Before I even call you guys, what should someone check on their own declaration pages first?

Dan Bell: The first things they’ll want to do are look at their declaration page and review their liability limits, deductibles, and listed drivers. Do they have the right vehicles on there?

This happens a lot. People look at their policy and say, “I haven’t had that vehicle for three years,” yet they’re still paying insurance on it.

They should also check what discounts are listed and whether anything has fallen off. A good student discount, for example, might fall off because there wasn’t a recertification of the grade report. Sometimes, as Jeff said, carriers can make mistakes, and for some reason, the auto-home discount may be removed.

Those are things you can explore on your own. Then give us a call, have a copy available, send it to us, and we can take a look as well.

Mike Downer: Perfect. Anything else, Jeff?

Jeff Eastvold: No, that’s accurate. Looking at deductibles is important too. A lot of times, people think they have liability only, or they think, “I changed that car to liability,” but they never actually did.

We find that a lot. It’s like, “Why do you still have full coverage on your 1998 Dodge Caravan?”

Dan Bell: In today’s market, that’s probably still worth pretty good money.

Jeff Eastvold: In today’s market, that’s a thirty-thousand-dollar vehicle.

There’s a benefit to having that conversation. We can say, “We can remove the full coverage and save you X number of dollars. Does it make sense to do so?” Especially if you have a youthful driver and you want to assign that youthful driver to that vehicle, you may want to take it down to liability. That could make a lot of sense.

Mike Downer: If someone gets that bill and is thinking about switching, one of the anxieties a lot of people have is whether switching carriers hurts them. Insurance rates kind of work like credit does. Does switching carriers hurt you?

Jeff Eastvold: No. The longer you’ve been with the same carrier can be helpful, but switching carriers is only negative if someone is trying to do it every six months.

If you’re switching every six months just to save five or ten dollars, not having longevity with a carrier can become a negative. But switching from one carrier to another after three years is not a problem at all.

When people start hopping every six months trying to save ten or fifty dollars, that can lead to higher rates in the future. But if you’re saving a thousand dollars, who cares? Switch.

Dan Bell: The habitual shoppers are the ones who don’t receive the best rate. To Jeff’s point, if they’re jumping ship every six months from one carrier to another, while it’s not necessarily surcharged, they’re not getting the best tiering for that insurance rate.

If you’ve been with a carrier for three years and can save money by switching, then that makes total sense.

Jeff Eastvold: You do have to look at it a little bit like credit. When we run rates, we take that into account. Sometimes it may be a little cheaper to switch now, but you may be better off waiting another six months until you have three years with the same carrier because we know it will produce an even better rate.

It depends on the situation. No two people are the same.

Mike Downer: That’s why having an independent agent like Absolute works for you. If you’re trying to dig through all this minutia online, you may not even know what you’re getting. You’re just looking for the cheapest rate with no advice, and you could end up with something really bad.

Jeff Eastvold: We’ve seen that plenty of times. Sometimes the coverages are so wonky that it’s like, “Did you just not know what you were doing and start clicking buttons?” And the answer is usually, “Yeah, pretty much.”

Dan Bell: Some companies have “name your price” tools, where you put in what you want to pay. Then I see the declaration page afterward, and it’s minimum liability, no uninsured motorist coverage, no medical payments, and deductibles set at two or five thousand dollars.

Then I’m thinking, “I don’t understand what’s going on here.” Number one, if you have a loan on the car, you’re probably still getting force-placed insurance on your vehicle because you’re not meeting the deductible requirement on the contract.

Mike Downer: I sold cars for quite a few years. I was in that business for a long time, and I was actually a finance manager in the car industry. After all those years, I think there were only two lenders that allowed anything over a five-hundred-dollar deductible. One allowed seven hundred fifty dollars, and one allowed a one-thousand-dollar deductible.

Other than that, everyone was five hundred dollars, and a couple of them were two hundred fifty dollars. They were good-credit lenders, so they were very stringent. They figured if someone had an eight-hundred credit score, they could afford a two-hundred-fifty-dollar deductible.

Dan Bell: Capitalism, my friends.

Jeff Eastvold: We’re seeing now that most lenders have expanded that to one-thousand-dollar deductibles.

Mike Downer: Oh, it’s one thousand now?

Jeff Eastvold: It almost has to be with the cost of everything. The five-hundred-dollar deductible from ten years ago doesn’t go nearly as far today.

Dan Bell: There are still some that cap it at five hundred dollars.

Jeff Eastvold: You can still find one-hundred-dollar deductibles, but they’re rare, and most of the time we won’t recommend them anyway. Be prepared to make another car payment.

I recently had someone change from a one-hundred-dollar comprehensive deductible to a five-hundred-dollar comprehensive deductible. She saved the difference in the deductible back in the first year. It just didn’t make sense for her to keep the lower deductible.

We’ve had her insured for years, and she hasn’t had any claims. Over eight years, that could have been forty-five hundred dollars in her pocket versus a four-hundred-dollar difference in the deductible.

Mike Downer: In my world, that’s another cruise for me and my wife.

Dan Bell: Vacation, absolutely.

Jeff Eastvold: In my world, that’s Amazon in one day.

Mike Downer: Does your wife listen to this?

Jeff Eastvold: No.

Mike Downer: Okay.

Jeff Eastvold: She’s on Amazon. She doesn’t have time to listen.

Mike Downer: Oh my gosh. We got a little off track on that one. That was awesome, though.

Dan Bell: You know this is going to be the one episode she listens to.

Jeff Eastvold: Yeah, probably. I’m going to have to increase my deductibles again because she’s probably going to do a double-ended Amazon day.

Mike Downer: Oh boy. The shoes are coming, aren’t they?

Jeff Eastvold: That’s right.

Mike Downer: All right, guys. Let’s wind this up.

Let’s say everybody is thinking about it. They’ve got that bill, they’ve got sticker shock, they’re a little panicked, and they’re ready to start shopping. What does reshopping with an independent agency like Absolute Insurance Agency look like? What does it mean in your world? What will I go through as a customer if I’m reshopping insurance?

Jeff Eastvold: Typically, we do a phone call and ask them to either send us the declarations or use technology we can send to them. They click a link, enter the username and password for their current carrier, and it grabs their policy and sends it over.

They probably spend about ten minutes on the phone call. Then we spend time doing the quotes, which could take twenty minutes or four hours. It just depends.

A lot of people have complicated scenarios, especially when you get into multiple homes, boats, and other things. We want to make sure everything is insured correctly.

They probably spend ten minutes up front. We come back with a solution, and by the time we present it, everything is usually done. We review the coverages and options they don’t currently have, which may take another fifteen or twenty minutes, and that’s it.

I had a client last week whom I went to high school with. I hadn’t talked to them in a long time, but they saved eight thousand dollars a year on their insurance.

Mike Downer: A year?

Jeff Eastvold: A year. They had youthful drivers, and the carrier they were with had simply become uncompetitive.

Mike Downer: Very good. That’s a lot of money. That is two cruises a year for me and my wife.

Jeff Eastvold: That is four more days of shopping for my wife.

Mike Downer: There you go. I think the next podcast I need to do is with a marriage counselor, so I can get some tips on how to get you and me out of the doghouse.

Jeff, real quick, last question. This one is directed completely at you: How much square footage is over there?

Jeff Eastvold: At the office?

Mike Downer: No, the doghouse you just built. What’s the square footage look like in that thing?

Jeff Eastvold: Not very big.

Mike Downer: Sorry, I had to be a smart aleck on that one.

Gentlemen, as always, it has been fun. Who thought talking about insurance could be fun? See, guys, call these guys. They’re a lot of fun, and they’ll take really good care of you. They’ll make things easy and do it the right way. It’s not going to be a high-pressure environment.

I do want to add that real quick. Some people have done online shopping, and then their phones and emails just blow up.

Dan Bell: That is not who we are.

Jeff Eastvold: Absolutely not. We do not do that.

Mike Downer: That’s why you call these guys. Don’t do it yourself. Don’t put yourself in a position where you’re muting every call. If you shop online, you may end up muting calls and blocking people for the next six months. I’ve been in that situation—not with insurance, because I call these guys, so I don’t have to worry about that.

Guys, as always, thank you so much for a great conversation. I look forward to our next talk. Hopefully, I’ll give it a little while before we do another podcast because I need to figure out how to get out of that doghouse.

Jeff Eastvold: Stop digging. That’s number one.

Mike Downer: All right, gentlemen. We’ll talk soon, and thanks for joining me today.

Jeff Eastvold: All right.