free web hit counter
Finances & Money

Breaking up is hard to do [Insurance]

Breaking up is hard to do [Insurance]
I underestimated the difficulty of canceling my Allstate insurance policy. Technically it was a very brief phone call and email, but the content of the conversation was the tough part.

Since I’m switching to Erie Insurance effective this coming weekend and saving $1400 on home and auto insurance, I had to call Allstate to cancel my my policies with them prior to the semi-annual renewal which also happened to be this weekend.




I’ve had a 13-year relationship with Allstate, and over 7 years with my specific agent. She’s been my agent since moving to the D.C. area after college and has helped answer a number of questions and concerns following my numerous traffic incidents over the years. She’s always been friendly, even as Allstate was charging me a bundle for insurance.

So today I called and got right through to my agent (Linda) and bluntly said that I’m “calling to cancel my home and auto insurance as I’ve switched to Erie Insurance”. She sounded almost devastated, and I know there was some sincerity in her voice as no one likes to lose a client, regardless of whether you’re part of a huge corporation or not. She asked that I send her an email stating the same thing I said verbally (for her records and to cover Allstate’s rear), which I promptly did after disconnecting.

So Linda, if you’re out there, it’s been a great relationship (money aside). Allstate has handled every claim with professionalism, courtesy and efficiency. I just wish they weren’t charging me $2500 a year for auto insurance and another $850 for homeowners insurance!

How I paid for the new policies

If you’re wondering, I paid the auto insurance in one lump sum of about $1300 for one year’s payment. For the homeowner’s insurance, I just sent off the check for about $650 for the next year, but since I still have about 5 months left in the Allstate home policy, I’ll have to get a prorated refund back from Allstate. Also, I’ll eventually have to get my mortgage provider’s info to Erie so they can work out the escrow stuff for the next year. So I figure we should be getting about a $500 refund from Allstate in a few months.

UPDATE: Clever reader “ohsusana” emailed me that I won’t be getting a “pro-rated” refund, but rather a “short-rated” refund. And as a followup, this morning my Allstate agent emailed me to confirm the policy is cancelled and I’ll be getting $353, not $500. Oh well, what can I do?

UPDATE 2: I found a great posting over at SavingAdvice.com – they outlined the insurance fees charged by most major insurers. Allstate’s cancellation fees are in fact short rated, along with AAA and American Family. Click here to check it out.

Photo credit: Mike Mozart.

About the author

Clever Dude

12 Comments

  • When I changed my homeowners insurance over from Nationwide to AAA I ended the policy after about 3 months. The refund was sent very promptly, I think I received it within a couple of weeks. When I changed the refund was more than the total cost for a years of coverage, so it turned out well for me to change also.

  • Wow, I just went through a very similar thing yesterday. I changed my insurance to Progressive as now that Massachusetts allows competition, I can pay literally half of what I am paying now for insurance.

    I also found it difficult to cancel with my current insurance agency, as they have been very pleasant to deal with. They were somewhat defensive (understandably so – they are probably losing tons of business now that people can find rates for half the cost), but in the end I just made the point that I cannot in good conscience pay double just because they are friendly.

  • Did you actually have a relationship with your agent? The one that I currently have has talked to me on the phone twice in three years and that is because I have called her asking questions.

    It is interesting how one company can be alright with charging that much more.

  • @Luke, I consider a professional relationship as one where I call, tell her who I am and she doesn’t act like she’s never met me before. I only talked to her about 2-3 times per year, but we chatted about non-insurance stuff as well.

    Granted, I don’t know how much control agents have over rates, but my mom and friend, both with Allstate but in other states, are saving huge amounts by switching as well.

  • We all want to save money and sounds like this move is worth it. However i will be curious as to how well the new company stacks up in the Customer Service department. Will they cover your claims as willing? Get back to you as quickly? I probably wouldnt pay $1400 more for great service but i would definitely pay somewhat more. Would love to hear the follow up…

    ~Cathy

  • I had a friend that worked at Allstate when I was getting quotes for home insurance. The quote they gave me was high and I talked to them about it, really all the agent can do is enter the data in their program and see what it gives. At most they could try to look up any discounts you might qualify for, but hopefully those were already in effect.

    So most the time there is not that much more the agent can do now.

  • CleverDude,

    Thanks for canceling the insurance policy and ruining my life! I was counting on the commission I made from your policy to pay my mortgage this month – now I am going to have to prostitute myself out on the streets of Rockville just to feed my family! You greedy bastard!!! Thanks for nothing!!!!

  • I imagine it’s a surprise to lose a long-time customer…you’d get comfortable with knowing they’ll always be there. But yeah, it’s not about being friends, it’s about getting the best insurance.

  • Today we got a letter from our cancelled insurance company that they are charging us taxes for cancelling the policy.The reason is every year it was raised and they wanted $700. to reinstate us.How can they get by with taxing us on a cancelled policy?

Leave a Comment