For the past 10 years we had our car insurance with Amica Mutual and were pretty happy with our policy and service. However, recent renewal bill had a premium increase of over 25% without any cause on our part. This looked like a great opportunity to shop around and check what other insurance companies have to offer.

How do you actually go about choosing an auto insurance company? I was looking for a reputable company with good customer service and reasonable rates. This is where companies like JD Power come to the rescue. They conduct consumer research studies on overall customer satisfaction, pricing, billing and payment, policy offerings and ease of contacting the insurer and then create a Power Circle Rating and a customer satisfaction ranking for auto insurers nationwide (see links below for the complete 2011 JD Power customer satisfaction list and JD Power ratings). Not every company on this list is doing business in New Jersey. There is another list provided by New Jersey Department of Insurance that shows all the auto insurers in the state. That was helpful.

Based on the JD Power customer satisfaction ranking list, the top five companies in New Jersey were: Amica Mutual, State Farm, Geico, Progressive and Allstate. After reviewing the ratings for specific categories, I decided to compare prices for Amica Mutual, Geico and Allstate.

Next step was to understand different coverage options available and what will be most suitable for our situation. We needed coverage for our two cars and a family of four driving adults. New Jersey Auto Insurance Buyer’s Guide provides some information about what coverage options most drivers choose and then of course speaking to an agent is invaluable. The table below summarizes the main options I considered.

My first contact with Geico’s customer service made a great first impression. The customer service representative was knowledgeable, patiently answered all my questions, suggested options to reduce premium and followed up with a written quote by e-mail. I had additional questions and subsequently spoke to two other customer service representatives who were very helpful. The whole experience was easy and comfortable. It was good to know that someone was there to answer your questions 24/7.

Allstate operates through a network of local agents. I contacted a local agent and was able to discuss various policy options and get a quote. I appreciated speaking to a knowledgeable agent. The enrollment process required extensive documentation including copy of driver licenses, copy of car registrations, copy of good student report card, name/address/phone for place of work and school for each driver.

Previously, I also looked at getting a quote online from Esurance. It totally did not work for me. They had a long questionnaire with language and options I didn’t understand. It resulted in frustration to me and a quote back that was very high and probably incorrect.  I learned later that Esurance is an Allstate company and I already was working with their agent. For me working with an agent was very important because there are many options and agents can speak from their knowledge and experience.

Equipped with quotes from all three companies (see table below), it became clear that while Amica Mutual had the highest JD Power customer satisfaction ranking of 843, their quote was also the highest and for a lower coverage amount. Allstate had the lowest quote and a customer satisfaction ranking of 781. I liked the experience I had with Geico customer service department. Geico has a customer satisfaction ranking of 797 which is above the industry average of 790. Their enrollment process only required driver license numbers, car VIN numbers and the name of the college my daughter was attending. They made it really easy for me to choose Geico.

In the end, we were able to get higher coverage for less what we have been paying the prior year and significantly less than the renewal quote for 2012. Shopping around has definitely paid off!

USEFUL LINKS –

http://images.dealer.com/jdpa/pdf/2011087-nai3.pdf – JD Power press release with 2011 customer satisfaction ranking list for auto insurance nationwide.

http://www.jdpower.com/consumer-ratings/ratings.htm?study=909201124 – JD Power ratings for auto insurers.

http://www.state.nj.us/dobi/division_consumers/insurance/autoinscontacts.htm – List of New Jersey auto insurers from State of New Jersey Department of Banking and Insurance.

http://www.state.nj.us/dobi/division_consumers/pdf/autoguide02.pdf – Auto insurance buyers guide from New Jersey Department of Insurance.

http://www.state.nj.us/dobi/division_consumers/insurance/auto.htm – State of New Jersey automobile insurance site contains many useful links like Controlling the Cost of Auto Insurance, Insurance Scoring in New Jersey and other.

Over the past several months, mother nature had several surprises for us. It started with a 5.8 earthquake originating in Virginia. Here I was sitting in my living room and suddenly the whole house was shaking. A week later, came the powerful hurricane Irene that caused flood damage to so many houses. And the recent snow storm in October knocked down power for over 1,000,000 households in New Jersey. We also lost power for over 5 days.  What an experience!

I decided to take a closer look at our home insurance policy to find out what is covered and what is not covered. It is not an easy task and there are many exclusions. After speaking to our insurance agent and a claim adjustor, I made several important adjustments to our policy in key areas of coverage.

Earthquake Coverage – Regular policy does not provide any coverage for that. I know the probability of having an earthquake in New Jersey is very low. Because no one expects it, the cost of earthquake coverage for home owners in New Jersey is very reasonable. It was under $100 for a year for our house. I decided to add it to our policy for the extra peace of mind.

Flood Coverage – Regular policy does not provide coverage for that.  It is usually expensive and is required for homes in flood areas. For homes not in the flood area there is a less expensive option. For our house it was about $350 per year. Still, it will increase our insurance premium by more than 40%. Given the extensive flood and water damage caused by hurricane Irene, it can be a good option. Our house doesn’t have a history of water damage but no one can predict the future. For now, I haven’t added it to our policy.

Hurricane Deductible – There is a regular deductible and then there is a separate deductible for hurricanes. My original policy had a very high deductible for hurricanes, about 2% of the insured value, which would translate to thousands of dollars. This was an unpleasant surprise to many homeowners after hurricane Irene. The state of New Jersey issued a one time exception regarding the high deductible for damages due to Irene . I decided it was worth while to pay the extra premium and have only a $500 deductible.

Power Failure – We have lost power for more than 5 days during the snow storm in October, 2011. After trying to live in the cold house without electricity for 3 days, I have reached my limit and decided to stay in a hotel. I wanted to know if our insurance will cover the stay. There was no easy answer. I had to reach a claim adjustor to get an answer. In our case, we were covered and were pleasantly surprised that the insurance offered assistance in finding a hotel and even making a reservation. This was a big help since we had no access to the internet and most hotels were booked. Kudos to everyone who helped us!

Home insurance policies are not easy to understand and have many exclusions. It is important to review it with your insurance agent and decide on best coverage options for you.

USEFUL LINKS –

http://www.nj.gov/dep/njgs/enviroed/eqrisk.htm#freq
NJ Department of Environmental Protection assesses the risk of earthquake in New Jersey