PHOENIX — As a journalist, I usually write about other people’s experiences. But when I tried to get a breakdown of my family’s car insurance costs earlier this year, the interaction I had with the company’s call center was so baffling I decided to find out if it reflects a larger problem.
Turns out it likely does, although my case was probably an extreme example of the typical frustrations one might face trying to get answers about their rates.
Two big takeaways in my situation may help consumers, especially considering the average cost of auto insurance rose more than 20% in 2024, according to J.D. Power.
One, don’t assume the first call center employee at your insurance company has all the relevant information. Two, seek help from your state department of insurance if you believe you have been unfairly charged.
Don’t assume the first call center employee (or third) has all relevant information
My quest to understand my family’s insurance costs began with a phone call to our longtime carrier, USAA. Our rates seemed too high and I wanted a breakdown of our coverage.
The first USAA operator I spoke with told me I wasn’t even named as the driver on my car’s insurance coverage. It got stranger from there. For the record, we have three members in our household driving three cars, and a fourth family member who had moved out months earlier and had obtained his own insurance for his car.
The next two operators gave me various versions of my rate plan that also did not align with what I knew to be accurate. Between three operators, they gave contradictory explanations for 1.) surcharges 2.) a 2021 traffic violation and 3.) a very high premium associated with my vehicle.
None could accurately describe the terms of my plan. It wasn’t until the third employee - described as a USAA manager - put me on hold for ten minutes and returned with new information about my family’s coverage that I finally got a logical explanation for our high costs.
Turns out when my wife had attempted to change our coverage several months earlier, our oldest son (the one who had moved out and obtained his own insurance) was still being counted as what the manager described as “kind of a floater” on our coverage. He said that was the reason for a more than $100 per month surcharge.
That explanation came about 90 minutes into the phone call. I couldn’t help but wonder: if a reporter like me who regularly deals with companies and bureaucracies was unable to get accurate information for such a long period, what about the regular consumer?
Going up 'the chain of command” in customer service
Shannon Martin is a licensed insurance agent and Bankrate analyst. Martin said she was not surprised by my experience because, like many industries, the auto insurance industry has had layoffs in recent years and relies more heavily on call centers. People answering your questions are likely receiving a fraction of the training they might have received ten or twenty years ago, she said.
“What’s replacing them (experienced employees) is A.I. or people who aren’t necessarily going into the job planning to be there long term and the training has gone down drastically,” Martin said. “You are going up the chain of command in customer service, not in underwriting.”
That’s why it’s important to plan your phone call and have a list of questions ready, Martin said.
“If you know you are going in with a list of questions after the agent says hello, say ‘Hey, I have a list of questions so it might take a little bit.’ That might make it easier for you,” Martin said.
'It’s like a secret sauce'
When I pressed to understand the reason for certain premiums and costs, the USAA manager I spoke with said he could not explain fully the underwriting process. He described it as “a secret sauce.”
Martin said that is an accurate description because insurance companies guard closely certain aspects of their rate formulas.
“With most companies, the odds of getting absolutely every detail where you could write out your own policy is very, very slim,” Martin said. She added that even departments within a given insurance company may not be fully transparent with each other.
“I don’t know if that is by design or not,” Martin said.
That is why she recommends asking to speak with a “frontline underwriter,” someone who has experience in the underwriting process. If one is not available, it is worth asking to speak with another employee with more information (in my case I was forwarded to the “escalation team” and then to a manager).
Martin also recommends downloading your insurance paperwork and looking up the “Class Code” before making the phone call.
“If you can get your full policy documents and compare them, you’ll notice, ‘Wait me and my spouse work from home, why does it say we commute five days a week?’ Essentially you are checking to make sure there weren’t any policy changes you were not aware of,” Martin said.
USAA: 'Call centers are appropriately staffed'
A spokesperson for USAA said their goal is to provide “personalized and accurate information on every interaction.”
“USAA’s call centers are appropriately staffed with thousands of highly trained professionals who are equipped to handle a wide range of inquiries, including complex insurance needs,” said Andrew Femath of USAA. “We continuously evaluate our service by analyzing feedback from surveys, call interactions and direct member input, which allows us to refine operations and deliver a better experience to our members.”
Femath said all of USAA’s underwriting practices comply with strict state regulations that ensure fairness and transparency.
“We are committed to providing members with clarity about how their rates are determined, specifically the key factors that influence premiums like driving history, location and types of coverage.”
He acknowledged the underwriting process is not fully available to the public.
“USAA, like all insurance companies, protect their proprietary methods used to price risk, which help maintain competitive pricing and financial stability for policyholders,” Femath said.
The State provides comparison profiles
There are other ways to make sure you are getting a fair deal. The Insurance Information Institute provides education and insight for the insurance industry and the public.
The Arizona Department of Insurance and Financial Institutions publishes a database of filed rates that allows customers to compare insurance companies with each other.
A department spokesperson said the most common complaints they receive from the public include claim-handling delays, denials, conflicting information from the insurer, and underwriting errors.
If you believe you have been discriminated against or unfairly charged, you should contact the department, a spokesperson said.
“Insurance companies do need to follow certain guidelines, make sure the rating is as fair as possible and the (state) commissioners can request certain information,” Martin said.
In my case, USAA reimbursed our account for the previous surcharges and company representatives were always cordial with us.
My worry is that too many policyholders, regardless of the company involved, are politely being given faulty information about their rates.