FARMERS INSURANCE / Norman Maul Agency Deceptive and fraudulent billing practices Phoenix Arizona

I am very sorry that "Jim" had an unsatisfactory experience with my Agency. Unfortunately, I cannot respond in detail because I do not know who "Jim" is. Even if I did know who he is, I would not disclose his personal business on the Internet. We take privacy very seriously.

It should be noted that most of Jims more serious complaints are not with my agency at all, but with a completely different company. Jim's only complaint about my agency seems to be about billing and pricing, which my agency does not control.

Bait and Switch is a crime that occurs when a business lures a customer with one product with the intention of switching the customer to a different and more expensive product. This is completely different than misquoting an insurance policy. The product doesn't change, only the pricing.

I freely admit that that policies are sometimes quoted that later turn out to be more expensive than the initial quote. There are valid and honest reasons for that, which I will elaborate on below.

I acknowledge that errors are made at times. Insurance rating is a complex process, with literally hundreds of possible variations that affect pricing. If we make mistakes, we admit it and apologize. Having said as much, we are not Farmers Employees, and we do not have the ability or authority to change prices. Further, rates and rules are filed with the State of Arizona, and we are legally bound to follow those rules charge the correct price, once it is determined.

If we messed up Jim's quote, I personally offer my sincere apology, if I did not already do so.

At my agency, we also disclose during our closing interview that all rates are a Good Faith Estimate, and the customer signs a statement that says so. The words Good Faith Estimate are printed in Bold Blue Ink, and underlined in an otherwise Black and White document. I am reasonably certain that I could produce such a statement signed by Jim if I knew his last name.

During 2008 my agency gave more than 5000 quotations over the Internet. Nearly all of these were given based on whatever information the prospective customer gave to us. We don't run credit reports, claims reports, or motor vehicle reports for initial quotes. We just take the prospective customer at his or her word. Often we get incomplete driver information, inexact vehicle model information, or other incorrect or incomplete data.

The nature of the insurance business is such that most prospective customers don't want to give personal data (understandably so) until after they know if they want to do business with the company or agency. Without personal data, an accurate quote is difficult to make. However, if you don't quote, the customer goes to someone else who does. It is an impossible situation, a "catch 22".

So, how do we quote? We make our best guess at whatever information we don't know for sure (which is all of it), and make additional assumptions such as risk assessment score, (related to credit worthiness), previous insurance history, and quite a bit of other detail.

In order to come up with a quote, we charge for ONLY that claims history, miles driven, drivers, accident and citation record and so forth that the customer tells us about. We also assume medium good credit, not the best, but above average.

This gives us a tentative initial quote, and we send it out. Naturally, these quotes are often incorrect until we get complete data. Worse, they usually go up, not so often down. This is because no one ever tells us about EXTRA tickets, accidents, bankruptcies, or other details that may make the rate go up. But often they do leave things out, intentionally or otherwise.

Other times the inital quote does not include some coverage the client wants, towing, rental, glass, lower deductibles, and so on.

All of this adds up to the fact that the inital quotation is nothing more than an estimate.

This doesn't mean that an agency is guilty of Bait and Switch. It just means the initial estimate is sometimes too low.

Thanks for listening.

Again, apologies to Jim, whoever you are.

Norman Maul