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When Loyalty Doesn’t Pay
Categories: Value Proposition
Our normal year end financial review brought about a disappointing revelation.
Homeowners Insurance
It seems that our home owners insurance premium went up a couple of percent and it struck me as odd since the housing values in Michigan have plummeted 50% this year. It forced me to take a deep dive into something I considered a fixed cost and yet saved myself a small fortune in the process.
To make this long story short, just know that I have owned 8 different homes in different States (all through relocations with my job) since 1983 and we have been with State Farm Insurance for our homeowners coverage with every one. We have NEVER had a claim, even when we have had small mishaps that might have been covered.
It has been our misguided belief that our loyalty to our insurance provider (or phone provider or bank lender or whatever) resulted in a favorable rate and treatment and there was never any cause to shop around as long as it wasn’t “broken”.
Boy was I wrong!
I decided to call GEICO (since I’ve grown to be a fan of Warren Buffet) to compare coverage and rates. Much to my surprise, they cut my bill in half!
Believe me, I was a skeptic until the lady on the other line of the phone walked me through all the details. They did a line item by line item comparison of every particular of my home (foundation, construction, fireplaces, moldings, basement types, roof types, patios, etc) since the home was built in 1936 and has had multiple enhancements along the way.
Loyalty
It turns out that they RAISED the amount of coverage by about 10% since the replacement costs exceeded the present selling value and kept my deductible the same…and still cut the bill in half!
My skepticism became elation….then my disappointment (almost anger) of being over charged for 20+ years for blind loyalty set in.
It’s a mistake I won’t make again.
It seems vendors/suppliers/companies that have long term relationships with you are easily tempted to take you for granted. It seem nuts to me that a cable tv supplier or cellphone provider can give a new customer the same service as an existing customer (one that may have been with them for 20 years or more) at half the price….but it happens every day.
Value doesn’t always come looking for you. You must go find it and then continuously benchmark it as time evolves. Nothing stays the same.
How about you? Have you found a better deal than the one you had been using for years? In a time of financial duress, we might all benefit from each others stories.
Next Deadline: 1/9/10
