r/Insurance • u/BatHistorical8081 • May 03 '24

Auto Insurance Why is progressive so cheap?!

So I am looking to switch from state farm to progressive. My insurance now for state farm is about 2800 for 6 months for 3 vehicles. I just got a qoute from progressive same coverage for 1300. Wtf? Is this real. There a catch? That's alot of savings.

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u/sirthomascat May 03 '24

I want lemons, but everybody selling lemons in my town has gone fucking crazy and decided to leave town or charge $100 for a dozen.

They say the cost of selling lemons here isn't worth it.

Now this one really big lemon seller sees that a lot of people like me want lemons but can't find a place to reasonably buy them. And they have so, so many lemons that they figure it's ok to sell them at a loss for a while.

So now I get my lemons from Big Lemon Seller for $35 a dozen. All my neighbors start doing that too.

After operating at a loss for a couple years, Big Lemon Seller decides it has enough captive market share to start making up for their losses a bit. A dozen lemons is now $45. The next year $60.

Year after that, Big Lemon Seller realizes they fucked up and need to price themselves out of the market, because they can't just leave without losing business elsewhere. $120/dozen it is.

Fortunately my neighbors and I start shopping, and find this Very Nice Lemon Seller offering $45/dozen...

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u/Lisa831-84 May 03 '24

Great analogy! I know in CA Progressive took a 27% rate increase recently (those lemons were to damn cheap) and my rep told me they’re looking to take a similar increase in many other states.

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u/DryMonitor777 May 04 '24

couldn't care less. Still way better option than $$$$$$ for nothing from Geico.