Switching to GEICO Auto Insurance Saved Me 24%

THIS IS NOT A PAID POST.  I’VE RECEIVED NO COMPENSATION FROM GEICO.

We’re all familiar with GEICO’s slogan of “15 minutes can save you 15% or more.”  In my case, GEICO saved me 24% by switching to GEICO from USAA.  I’ve been a fan of USAA for a long time, but over the past 5 years I’ve personally noticed a significant drop in customer service.  Here’s my story of how and why I switched my auto insurance to GEICO.

I’m currently stationed in Louisiana (LA), which has one of the highest auto insurance rates that I’ve experienced.  LA rates are even higher than the California coast, which was my previous duty station.  LA does offer a 25% (well, not exactly 25%) discount for military members.  I completed my form in January of 2014 and in November of 2017, I found out you have to complete the form every time you renew your policy.  So in my case this is seven 6-month policy renewals where I missed out on the “25%” discount—costing me over $400.  Here are some problems with this process:

• According to 2 customer service representatives, by LA law, they are not allowed to remind military members about the discount
• Your policy renewal is sent through your message and nowhere in it does it say “Action”
• The military discount sheet is on PAGE 10 of a multi-page document instead of upfront so you know you must take action
• According to the 2 customer service reps, by LA law, they can’t retroactively pay you back for missed discounts. After talking to multiple military members, this may be untrue, as other LA military members have been back paid.
• The 25% discount is not a true discount. It only applies to vehicles registered in LA, so in my case it was only going to be a 12% discount. I imagine a lot of military members have cars registered in multiple states.
• Not all USAA agents can answer LA insurance questions, so the online chat can’t help you, nor can the initial representative help you. You will be transferred; you will have to be on hold.

A coworker overheard the troubles I was having and recommended switching to GEICO.  I was with GEICO 17 years ago and they did not offer competitive prices.  At the time, USAA was 75% cheaper than GEICO when I was young and enlisted.  This week, I called GEICO and ran through three different scenarios.

1. I could keep my USAA Auto and Property insurance (status quo).  To keep an apples-to-apples comparison with GEICO, I added the Auto and Home combination discount of $11 ($132 divided by 12 months) that I get for my property insurance, to my current auto insurance policy adjusting my monthly payment to $220.  I have a 17-year old son which is why my payment is so high.  Start budgeting now if you’re approaching teenage years.
2. I could switch to GEICO Auto and keep my USAA Property insurance.  To maintain the equal comparison, I added USAA’s Auto and Property insurance discount of $11 to my GEICO quote and my adjusted monthly auto payment would be $167—though the actual payment will only be $157.
3. I could switch to GEICO Auto and GEICO Property insurance.  GEICO was unable to match USAA’s $1,100 worth of annual discounts and savings, theoretically adding an additional $92 to the reduced monthly cost of $147, giving an adjusted cost of $239 a month.  The reason why I added the increased insurance premium to my auto insurance is because I needed a way to compare switching auto insurance policies alone by keeping all things equal.  In economics, we use the Latin phrase Ceretis Parubis, which means “all other things being equal.”

As you can see, by comparing the adjusted costs between the status quo of $220 a month and switching just my auto insurance to GEICO at $167, I could save nearly $53—a 24% savings.  It’s sad to leave a company after 17 years, but GEICO has nearly the same customer service satisfaction rate as USAA and after this week’s dealings with both companies, I can say that GEICO may exceed USAA’s customer service—at least in the insurance division.  Check it out yourself to see if 15 minutes can save you 15% or more.