The bait and switch: It’s one of the many ways American corporations mislead consumers. I recently experienced this age-old sales scam while shopping for car insurance online. Lured in by a reasonable quote from Geico (among others), I spent money and time lining up a car to replace the one that was lost in a small accident 18 months ago (that’s a story for another time). I was eagerly anticipating the lifestyle improvement this car would mean: less time on public transportation, more quality time as a parent, multiple bags of groceries at a time from Trader Joes, clean clothes at the laundromat, day trips from the city with my daughter this summer. The sun shone bright on my future. Hopeful and grateful, I flew 400 miles to pick up the vehicle my brother was loaning me.
At the moment when I had the car keys in hand and logged on to finalize the transaction so I could legally drive off into the sunset, the price of my insurance doubled.
Shocked? I was, too. So I called the Geico agent to find out why. It appears that during the quote process, when I declared the accident and the website “found” my DMV record and acknowledged the incident, it wasn’t really taking into account the details of the DMV record, despite the official appearance on the screen. In fact, the accident fell into the “bodily injury” category, because the guy who pulled partially into a driveway right in front of me went to the doctor to find out that he was fine. The insurance company paid him $200 for the doctor visit. He was not injured, but because the insurance company had to pay on the claim, California law dictates that I lose my 35-year good driver record for a 3-year term.
I find this to be horribly unfair, as I told the insurance adjuster who reviewed the accident at the time, but that’s not the subject of this discussion. The issue now is that Geico and other insurance carriers use California’s one-size-fits-all insurance law to justify a 100+% hike in the rate they quoted me initially. When I earned my good driver record, my insurance company gave me a 20% discount, but now, coupled with the supposed bodily injury, my rates are more than double what they should be.
As a result, I cannot afford to insure the vehicle whose keys dangle idly from my fingers. My summer plans with my ten-year-old are scrapped. The mountains of laundry that I struggle to drag up hill and down dale to the laundromat continue to grow in my bedroom. My refrigerator shelves boast gaping holes between the items that fit in the one bag I can carry at a time. And I feel ego-deflating shame at my 50-year-old self falling for such a scam that seemed too good to be true.
We consumers feel powerless against such abuses of the law. Insurance companies know that once you buy the car (or in this case, borrow it indefinitely), you have to insure it or drive illegally uninsured, which many less ethical people choose to do. Geico gives you one quote — seemingly in order, with a highlighted DMV record and the statement “We found the incident record” — and then the use the legal code to gauge the consumer. I refuse to take part in this practice. I will continue to take the bus.
Similar consumer abuses happened in the early days of this most recent recession: taxpayers paid to bail out big banks, who then turned around and — in my case — doubled the interest rate on credit cards, passing their losses on to the consumer in an exponential way. And we’ve been paying for it ever since, while some of those who were bailed out have earned profits and paid their executives bonuses for stealing our money twice. They have not repaid, nor are under any obligation, it seems, to repay those who saved them from disaster. And, despite the achingly slow recovery, interest rates for consumer credit remain high. The banks have no incentive to lower them. We are caught in the vice-like grip of greed. When I saw my rate double, I called Bank of America, who could offer me no reason for the change, except “everyone is forced to do it because of the economy.” I cancelled my account and moved the debt to my credit union, who has not raised my interest rate in 12 years. Apparently, not every lender felt equally forced to punish its customers.
But frankly, who can blame the corporations? The capitalist system is designed to reward profit without consideration of ethics. It seems at times that the more unethical you are, the more you are rewarded in this system. Our corporations send jobs oversees where labor is cheaper, and then claim the public relations elite status as “job creators,” while CEOs pocket the money they save by not hiring Americans to do those jobs. The rich get richer and unemployment grows.
I am not an economist. Like many participants in the Occupy Wall St movement and it’s various spin offs, I cannot propose a solution, nor should I have to. But I can highlight the problem and ask that those in power take a look at the balance sheets and add a factor of ethical behavior into the equation. I can ask that California insurance law consider the shades of grey instead of seeing consumers as “good” or “bad” drivers, and punishing us accordingly. And I can choose not to give my money to Geico, and ask others to do the same.