How Insurance Companies Work?

in Automobile, Insurance

From 2010, the one time I bought a new car. I have owned previously owned vehicles, most of my life, and this car convinced me that is the correct decision.

As part of the gyrations I must go through to purchase a new vehicle, I must get my new vehicle insured (that is the law, no getting away from that).

The easiest thing for me to do, is to simply remove my old vehicle and add my new vehicle, and pay the difference in premium (if there is any).

This very task I attempted to do, however, I noted that since I am now a member of the Public Service, I receive a discount from my Insurance company, and I thought this would make things so much easier, however, I was mistaken.

Currently I am part of a discount plan given that I was a Nortel employee with this insurance company, and I have my cars insured using this discount. I assumed if I called the “broker” for the Public Service side of the discount, they would simply transfer me over as a customer and that would be it. Yes, dear reader, you guessed it, nothing is as simple as I think it is going to be, and thus the story takes a left hand turn.

Insurance Sequence of Events

I called up the brokers, and said, I am an existing client of the insurance company and I’d like to add a vehicle to my coverage, the young lady on the phone was more than happy to help me out, and she asked for my policy ID to “bring up my file”. I exercised my abilities in the phonetic alphabet rattling of various Alfa, Bravo, Tango and other letters and the young lady typed it all in. There was a long pause and she repeated back to me what I had just told her, and I agreed she had the correct policy number.

Her response surprised me when she said, “I am sorry sir, your policy is not coming up, do you have your policy with this broker?”, I said, “Pardon?”. Evidently since who I have my insurance with is not nearly as important as from whom I have purchased my insurance. I was told that I would need to call the “broker” I had dealt with previously to add my new vehicle.

The interesting twist on this is that the “broker” I deal with is actually part of my insurance company (from what I can tell), and thus I must call my insurance company, have them transfer me to my “broker” and then I can add my new vehicle.

I did finally succeed in getting a new quote for my new vehicle so that task is now complete.

Obtuse Insurance Games

My insurance policies actually renew in a few months, so now I will do something so obtuse that I must write it down to believe this, but here goes:

I will phone an insurance broker to get a quote for my car insurance with the same insurance company that I currently have to see if I can get a cheaper rate for my car insurance, even though the policy will be with the exact same insurance company.

I guess it makes sense given the discounts available, and the free market at work, but it always seems so obtuse that I can get a cheaper price for the exact same product, by simply calling someone else. Yes, I am naive, I assume the cheapest price should just be the normal price, but that is another story.

Interesting Brand Name Funny

When Buick introduced it’s new Luxury Sports Sedan (I have no idea what this class of car is for, but let’s stay on track here) they did not check with their offices in Montreal about the new Brand Name they were going with. This vehicles name is the LaCrosse, but in French Canadian slang, LaCrosse means … ummm … let me put this in a delicate way … male sexual self-gratification, to put it as delicately as I can. I was unaware of this, but I did check with a co-worker who is French Canadian and sure enough, that is the case.

This is almost as good as the Chevy Nova, which in Spanish translates to “No Go”!

OK, nothing to do with money, but still quite funny


  • Neil January 27, 2010, 12:47 PM

    Are they both different people within the same insurance company? Or are you trying to move from dealing directly with the insurer to dealing with a broker. Because while it’s surprising that the broker could offer the better deal, it’s still not surprising that they couldn’t service a product that someone else sold.

    • bigcajunman January 27, 2010, 1:10 PM

      Different brokers with different group discount “groups”. Interesting idea, just confusing.

  • Neil January 27, 2010, 12:44 PM

    The same logic applies to your lower price. Just as you can shop around different stores for the exact same physical product, you can shop around different stores for the exact same financial product. Depending on that store’s (broker’s) profit margin, and sometimes volume discounts they get from the producer (insurance company), they can offer different deals.

  • Neil January 27, 2010, 12:41 PM

    An insurance company is a producer, and a broker is a store. If you bought a Samsung TV at Superstore, would you take it back to Future Shop for service? They both sell the same brand, after all.

    • bigcajunman January 27, 2010, 12:44 PM

      True, but in this instance I am buying from the factory outlet, which is even more interesting.

  • Jerry Hung January 27, 2010, 10:28 AM

    Last week, I just called my insurance (State Farm) and got 3 quotes for 3 different cars in < 5 minutes over the phone, that's the easy part.

    Hard part is learning that new car rate is more (from $1600~$2000/yr vs my current $1200), so I'll continue to drive my old car then


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