I shopped around a couple of automobile insurance quotes before I renewed my policy. It came down to a choice between my current insurer USAA and the possibility of switching to GEICO. They both have ultra-cheap business models because they don't maintain a horde of field offices with sales reps running up marketing expenses and administrative overhead.
I fiddled with the coverage criteria and discovered that I could dramatically reduce my premiums by adjusting my coverage for bodily injury and property damage to cover only the nationally-adjusted average costs per driver in an auto accident. Check out the RMIIA's data on the cost of car crashes. The National Safety Council also has estimates of the costs of motor vehicle injuries. This is why I'm ten steps ahead of the average American consumer. I use open-source Big Data products as the basis for my analysis, and I keep my decisions as rational as humanly possible. This data is now easy to find, so I no longer have any excuse for overpaying for coverage out of ignorance of the likeliest costs.
It came down to a pretty close decision, and I ended up staying with USAA. They carried over a discount from my last term that made the final cost worthwhile. I don't know if that discount will still apply when I renew my policy, and if it doesn't then GEICO's military discount may be the tie-breaker next time. Another feather in USAA's cap is the ability of its banking and brokerage services to shave a few bucks off routine transaction costs. I don't need that right now but it may come in handy if I have to move my savings and checking accounts from TBTF banks.
This cost comparison exercise drove home a really cool lesson. The difference in product cost between the two companies for the same policy terms was microscopic. USAA is a private club run by retired military officers who've never met a bottom line in their entire lives. GEICO is a Berkshire Hathaway company and Warren Buffett handpicks their executives. The difference in product characteristics and cost is virtually nonexistent because insurance company metrics are determined by actuaries, the original Big Data professionals who are so rational they may as well be inhuman. The performance of an insurance company has nothing to do with its executives' professional competence and everything to do with the structure of data profiles and risk pools. This is something the architects of the Affordable Care Act are going to learn the hard way as plan providers drop out of the exchanges.
