The Easiest $300 of “Recurring Revenue” I’ve Ever Earned
Photo by Alexander Mils on Unsplash
I know, that’s kind of a cheesy, linkbait-y line, but it grabbed your attention for something really worthwhile (and that “$300 revenue” is actually understated).
I’m kind of old school when it comes to insurance. Research, compare, buy a policy, and renew every billing period. Forever. I figured I’d benefit from long-term customer loyalty, earning preferred rates and possibly accident forgiveness. There was no trigger to prompt me to re-evaluate. So, I haven’t, for years.
Recently, my daughter, wh had had a somewhat expensive collision, moved off of my car insurance policy. onto her own policy. I expected a huge drop in my premiums. There was a drop, but nowhere near what I was expecting. So, I started reading up a bit.
I found out that, contrary to what I thought, loyal customers don’t actually get better rates than new customers. In fact, in most states, insurance companies can — and do — charge renewing customers higher rates than new customers — the exact opposite of what I thought.
How much more? Well, you’d probably be very surprised. I was absolutely stunned.
After reading a few articles, I learned that insurance companies habitually charge renewing customers more than new customers. It’s called “price optimization” — raising the rates on customers they figure are unlikely to switch. (They garner the data from way more than just your track record with them — they have access to data on practically anything you buy, or subscribe to.)
I decided to contact 3 well-known insurance companies with good track records amongst their customers (using Consumer Reports, and several other reputable sources), and see what offers I could find.
After clicking through a few forms on each site to request quotes, I got 3 very attractive proposals — all in the ballpark of 1/3 the price of what I was currently paying for the exact same coverage. We’re talking some serious savings. My then-current 6-month premium was around $2600; all 3 of the new offers came in within the $800-$900 range for the same 6-month period, for the exact same coverages.
Doing the actual math, it worked out to saving me $291 a month, every month. That’s where the “recurring revenue” comes in — this is truly recurring savings. (Actually, it’s pure savings, not subject to income taxes, so it’s better than recurring earnings.)
I had been with my previous insurer for over 35 years, and had always been very happy with their service. But, paying three times as much for the same coverage? No way!
I suggest you do yourself a favor and spend the hour or so it takes to get an automated quote. You can potentially save hundreds of dollars a month.
P.S. When I called to cancel my old insurance policy, they re-analyzed my account, and came up with a new offer, very close to the other insurance companies — about 1/3 of their own previous quote. Note that, I had recently inquired about why my premiums were so high, and when I could expect them to come down — a couple of times — and was told by the agents that they had no idea how rates were calculated. Maybe you could just ask specifically for a rate review, or maybe you have to start the cancellation process — I don’t know. But, I’d start by getting a few quotes from other companies, to get a feel for whether it’s worthwhile to consider a change.
Originally published at https://medium.com on August 3, 2021.