GEICO update

[Pau Hana]

Wanted the forum to hear the facts of what is happening with GEICO.

GEICO remains a strong and viable insurer, so insolvency is not an issue. That said, GEICO has elected to restructure its sales channels; part of that restructuring is the elimination of the Independent Agency program, and changing to a direct sales/captive agent approach. Another change of note that was announced recently was the elimination of GEICO's Charter Program (policy code CBT) and Super Yacht program (policy code SSY)

Thus, Novamar (my company) and all other Independent Agencies are parting ways with GEICO over the coming year. This was not our choice, but a GEICO corporate decision. Depending on the state of issuance and applicable laws, non-renewal notices will be sent to policyholders advising them of this change.

This news was a complete surprise to us, and we learned of this just a couple of days ago- we had no inclination of this announcement. Novamar is taking a very proactive approach in this situation by informing current GEICO policyholders of the coming changes, as well as reviewing all GEICO polices for placement with different insurers.

I'll continue to advise of this situation as it develops. Please reach out to me should you have any questions.

 

[BandB]

A dramatic shift. Remains to be seen whether it benefits Geico or not. I understand trying to eliminate a layer, just don't agree with it from either a consumer or a business standpoint.

 

[Pau Hana]

Indeed. I see this as either (1) a knee jerk reaction or (2) actuarial business decision from GEICO.

Either way, I also see massive unintended consequences from the decision.

 

[Comodave]

We have Geico through Boat/US. Do you see that impacting us?

 

[BandB]

No

 

[BandB]

We have Geico through Boat/US. Do you see that impacting us?

No

 

[Mortensi]

Magic 8 Ball says

we have geico through boat/us. Do you see that impacting us?

 

[Pau Hana]

We have Geico through Boat/US. Do you see that impacting us?

Possibly. There are 2 separate insurance units in the G/BUS world, and changes at mothership GEICO will mean changes across the board.

 

[Comodave]

Possibly. There are 2 separate insurance units in the G/BUS world, and changes at mothership GEICO will mean changes across the board.

Great, maybe. Thanks for the info.

 

[socalrider]

Great, maybe. Thanks for the info.

My Geico renewal rate went up 40% a month or two ago after a 30% increase shortly before that when I moved slips. I called Novamar and got a significantly better rate.

 

[firehoser75]

I admit I know little about the business of insurance and underwriting. However, how can losing all of your (Geico's) business from the many Independent Agents be a good move??
This move does not make business sense to me, but remember my first line

 

[Pau Hana]

I admit I know little about the business of insurance and underwriting. However, how can losing all of your (Geico's) business from the many Independent Agents be a good move??
This move does not make business sense to me, but remember my first line

That, my friend is the correct question...

 

[klee wyck]

I admit I know little about the business of insurance and underwriting. However, how can losing all of your (Geico's) business from the many Independent Agents be a good move??
This move does not make business sense to me, but remember my first line

I know nothing of this subject, but this:
The owner of Geico is not known to be a stupid fellow. I would be(am) quite willing to bet this works out for him/us......

 

[BandB]

I admit I know little about the business of insurance and underwriting. However, how can losing all of your (Geico's) business from the many Independent Agents be a good move??
This move does not make business sense to me, but remember my first line

There have always been two very distinct approaches to insurance in the US. One is the use of independent agents. The other is to use only your own agents. The largest have used only their own agents. However, one major change has come about. State Farm and Allstate were set up on the basis of having agents with their own brick and mortar locations. Well, Geico was built without and a large percentage of Geico's business has always been direct. They advertise their direct business heavily as does Progressive.

I'm sure Geico feels that the amount of insurance they get through independent agents doesn't justify the cost but also they other part of the argument is this doesn't give them loyal, captive customers as a good independent agent is always willing to change the customer's insurer if appropriate. The loyalty is to the agent, not to Geico.

I've always valued independent agents and held them in high regard although at some point along the way I did go the State Farm route. Not having anything but cars and home it worked fine. I never insured a boat through them. I remember my very first boat in my name. Small runabout. Rate through independent using St. Paul was 1/3 of the rate of State Farm. I repeatedly tell people here to find a marine broker first, not an insurer. This is again proof as while Geico is more than willing to pick up some of the customers, there are others they are dropping and where would those be if they didn't have an independent agent? Shopping the market on their own.

Now, clearly insurance is conducted on the phone today. So, Geico can do this. They just won't ever have my business doing so. But then they want you captive and don't want just your boat business, they want home, auto and boat.

I think Geico can operate fine handling it all out of a central office. I don't think they care about losing some boat only customers, although they'd still have a lot through their captive Boat US. I wonder about the future of State Farm and Allstate agencies. I ask any of you using them when the last time you went into one of the offices was? Also, I want to note that the value of one of those offices is far less than you may think. There are hundreds of Allstate agencies available for sale at any given time. Why do you never see State Farm agencies for sale? They can't be sold. No, not even on retirement. If you decide to retire, you can't turn it over to your long time assistant or sell it, your customers are just dispersed to others. So, you work decades and build up zero asset value. State Farm has 19,000 agents. Allstate has 12,000. You'll never see the approach again. Last of a dying breed of single line agencies.

So, Geico has decided to cut out the middle man. They have decided they want only captive customers. They don't want you having an agent who can write you policies with other companies. A reasonable business decision, but not one I feel is in the best interest of any marine customer. In home and auto, they don't drop customers like they do in marine and the policies don't vary the same. They're also more closely regulated by states.

I would say this strongly. Even if your home, auto, and motorcycle are through Geico, going direct to a single line for marine insurance is very dangerous and eventually you'll find yourself looking to a multi-line independent agent for help.

 

[BandB]

I admit to not knowing all of Geico's plans at the moment. After all, you go to their website and you'll still be referred to independent agents. Then on top of that, they have their "Own an Agency" web page so trying to sell agencies. And they sure haven't been forthcoming in any sort of public announcement.

 

[STB]

. I ask any of you using them when the last time you went into one of the offices was?

I have State Farm. When I went from never owning so much as a row boat to a 42' Trawler with 0 time on the water, they were the only one I could find that would insure me. Others probably would, but after a day on the phone getting told I bought too much boat for my level of experience, even by GEICO and BoatUS, I walked into the State alarm office of David Hiser, now retired, and left with a binder that became a policy.

These days, when on land, I walk into my long time agent, David Masters' office, and leave with whatever I needed and sometimes a cup of coffee. Years ago, when I got into a fight with a "Service First" body shop over the quality of repair work, he sent an inspector, my rental car was extended, and my car didn't leave the shop until I was happy.

In each case, I can only imagine that State Farm wasn't looking only at the risk or cost at that moment in time, but the value of the policy I'd had for many, many years, wanting that to continue into the future. They made the right bet.

Although State Farm doesn't give their agents ownership over the policies to sell, which really sucks for their agents, they don't disperse the customers of offices that are functioning well -- they appoint a new agent to take over the portfolio. After working in other capacities for State Farm for years, David took over that office (and my policy with it) from my former agent who retired.

Coverage with State Farm has some limits w.r.t. marine insurance. In particular, unlike marine insurers, they just write checks later. In the moment of crisis, they dont really have the capability to anything beyond that. They also don't have many limitations on use.

I don't recommend them unconditionally for larger boats because of how well I've seen GEICO and BoatUS manage the entire process, often saving boats and minimizing loss without the owner spending a dime (beyond, eventually, the deductible).
But, personally, I cannot complain that my agents have been unavailable or that they haven't valued my business or paid out when I needed them to, including subrogating that claim against a hit-and-run driver and refunding my deductible.

 

[tiltrider1]

Pau Hana is my broker. Gieco is owned by Berkshire Hathaway (warren buffe) and I have a sizable investment in BH. I was just at our annual shareholder convention. As always The Gieco presentation was about reducing costs by streamlining and using a cookie cutter approach. When Gieco talks about boat insurance, and that is what they say to shareholders not marine or yacht, they talk about bass boats and ski boats, with an occasional small sail boat. They don’t talk yachts. I suspect that larger boats is not a focus for them going forward.

 

[Leonard Atkins]

Like a few I was surprised to find our small pocket trawler being insured by State Farm this year. Our last 5 cruising boats were insured by Boat US and then this year Geico/Boat US sent a renewal notice with a 28% increase. We are not in a hurricane area and have never submitted a claim. So went to bid and State Farm who already has our house, vehicles, fishing boat and umbrella policy (40 years) had a lower premium, similar protection and learning the umbrella policy also covered our boats it became the best policy. State Farm even reduced our vehicle insurance costs after asking if w had retired.



Have found similar "raise the price and see if it sticks" this year from cellular, internet and heating oil providers who we had long term relationships with. Bid them all and found similar service at less cost in all cases. Without exception they were surprised we went elsewhere without calling them first to negotiate their new fees. I do not expect any of the new vendors to be long term relationships, the situation is just different now,

 

[BandB]

Have found similar "raise the price and see if it sticks" this year from cellular, internet and heating oil providers who we had long term relationships with. Bid them all and found similar service at less cost in all cases. Without exception they were surprised we went elsewhere without calling them first to negotiate their new fees. I do not expect any of the new vendors to be long term relationships, the situation is just different now,

Internet, Cable, etc. are the ones that infuriate me as they're approved by the towns or cities and have monopolies, and yet are allowed to just increase prices astronomically. I hate the strategy of huge discounts to new accounts and when those wear off you're suddenly paying $50 more. Their prices stick because even if you go to streaming you still need their internet.

 

[tego]

I've had Boat US since 1993, no claims ever, and was disappointed when GEICO acquired them but went along with it till this year. I got my renewal and was surprised to find my "agreed value" policy changed by devaluing my vessel by $4000 and a price increase of $150. When I called them, they told me it was because of all the damage claims in my area. I boat the TN River nowadays. told them where they could put their policy and switched to Progressive for a lesser cost than before. Ben

 

[Pau Hana]

I've had Boat US since 1993, no claims ever, and was disappointed when GEICO acquired them but went along with it till this year. I got my renewal and was surprised to find my "agreed value" policy changed by devaluing my vessel by $4000 and a price increase of $150. When I called them, they told me it was because of all the damage claims in my area. I boat the TN River nowadays. told them where they could put their policy and switched to Progressive for a lesser cost than before. Ben

Be sure you understand the coverage differences between the Progressive policy and the GEICO policy- there are better choices than Progressive.

 

[Benthic2]

We have Geico through Boat/US. Do you see that impacting us?

Absolutely !!! GEICO's profits will go up and they will pass all the savings on to you!!

:lol::lol::lol::lol::lol::lol::lol::lol::lol::lol::lol:

 

[Comodave]

Absolutely !!! GEICO's profits will go up and they will pass all the savings on to you!!

:lol::lol::lol::lol::lol::lol::lol::lol::lol::lol::lol:

I won’t hold my breath waiting...

 

[rslifkin]

Be sure you understand the coverage differences between the Progressive policy and the GEICO policy- there are better choices than Progressive.

That reminds me, I need to look into alternatives to the Progressive policy I currently have. Probably due for a new survey though. Initially I ended up with Progressive, as they were the only insurer I found that both offered a reasonable price, but also wasn't going to force me to pay for a training captain. I took that attitude of that requirement being BS, as I'd been operating the boat in question since I was a kid, I'd just never owned a boat (but most of the insurers didn't seem to care, they just saw "38 foot first boat, needs captain").

 

[Pau Hana]

That reminds me, I need to look into alternatives to the Progressive policy I currently have. Probably due for a new survey though. Initially I ended up with Progressive, as they were the only insurer I found that both offered a reasonable price, but also wasn't going to force me to pay for a training captain. I took that attitude of that requirement being BS, as I'd been operating the boat in question since I was a kid, I'd just never owned a boat (but most of the insurers didn't seem to care, they just saw "38 foot first boat, needs captain").

That is because claims filed by first time boat owners on large vessel are statistically much higher than on owners that have a graduated experience background. Ownership can be documented, while operational experience is harder to prove- and too often, folks falsify their experience (and the high number of claims bears this out).

 

[BDofMSP]

I've restrained myself from sharing the horrible customer service experience that I got from Geico last year, primarily because Peter went to the mat personally for me and escalated my situation within Geico. Now that you'll be parting ways with them, Peter I hope you don't mind that I say "good riddance". I do understand that it was during Covid and I've been more that willing to give them the benefit of the doubt. But they drove me away as a customer more relentlessly than any business I've ever seen.

Kudos to you for helping me through that, and then to transition to superior coverage for even less. Thank you so much for your great customer focus!
BD

 

[moparharn]

Just got an insurance quote from Geico last month for a 43 foot steel trawler. They quoted $2,850 per year. Hmmmmm.
Chubb quoted next at $784 per year. Geico/Boat US is a complete waste of time as far as I am concerned. I use Tow Boat US, but have never received a competitive quote from them.

 

[Shaunc]

I got notice yesterday that from the 1st of June and the start of hurricane season here in Florida, I am no longer covered because when the went to take my renewal deposit, I had anew credit card. Despite updating the card info, they would not renew my policy

So desperately hunting for new insurance

 

[Montenido]

This is interesting, When I brought my boat back from Mexico in August, where it had been for almost 4 years, I called to let my insurance know (geico), thinking I would save some money. Not only did I not save money, but I was informed that Geico no longer covered me in Mexico, and had not for most of the year! Say what? I received no notice of the change in coverage, and was paying for 8 months when I wasn't legally "covered". I'm heading to MX again in October and will be looking for a new provider then. Say bye bye Geico.

Cheers, Bill

 

[Nepidae]

We've had BoatUS insurance since we bought the boat in '10.

While I've never had a claim, so far (knock on wood & my head) BoatUS has always been responsive to my contacts.

Recently, I check to see if there were hurricane exclusions (Latitudes) on my policy, which there are none.

Rates have fluctuated, which is understandable.

I queried the agent with respect to the agent cancelations and how that would impact my policy.

Her response was that BoatUS & GEICO are 1 & the same company so no changes to my policy.

I asked about boat size exclusions and she said it is strictly owner, size, experience (as well as the normal stuff of credit rating and other personal nuances). She also added that a 60' is probably the extent of the size they would entertain BUT I would check with them if you are over 60 and interested.

There may be on the MTOA site a document with the specifics of what the MTOA had negotiated with Jon which I used to upgrade my policy with BoatUS. Doing so was less expensive than the quote I got from his company which would have also necessitated a survey.

For those who are looking for replacement policies, check out BoatUS. Also, be aware you may be required to obtain a survey before they will bind you. I would guess that might be the case with any insurance company you contact for a quote.

The woman I spoke to was very cordial and straightforward with her answers.

One important issue that I rarely ever seen discussed, is whether an insurance company will pay if you file a claim. I have talked with several who had insurance with other companies that had to negotiate on getting a payment from the company, therefore for me, it isn't only the cost of the coverage, but will I need to negotiate. In all of the discussions pertaining to BoatUS, I have never heard of anyone negotiating to get paid. I understand they pay the value of the policy. That is equally important to me.

Also, when I've called BoatUS I have always gotten an agent who handles my policy, not the same agent but why do I care, they have my insurance info on the computer in front of them and can handle any needs I have.

Good luck to those searching for insurance.