Everybody knows that a 15 minute call may be able to save you 15% on insurance, but there is another way to save money on your GEICO Insurance policy that isn’t as well known. It’s easy to do and all GEICO policy holders can become eligible with one simple step. Today’s article is about how to get this discount, and how much it will save you.
How it works
We start with the world’s richest man, Warren Buffet. Warren Buffet is the largest owner of a company called Berkshire Hathaway, which is known for offering unusual incentives to its shareholders. During the annual meeting in Omaha, Berkshire Hathaway stockholders get discounts on a wide variety of products including furniture, jewelry, and art work from a variety of retail stores that Berkshire Hathaway owns. The details can be found here.
While you may or not find those discounts interesting, there is another discount that is available year round, and you don’t have to go to Omaha for. Berkshire Hathaway owns GEICO Insurance, and shareholders of Berkshire Hathaway get a discount of 8% on their insurance premiums.
How to get your discount
The first step is to purchase at least one share of Berkshire Hathaway stock. There are two types of Berkshire Hathaway stock, type A and type B. As of the time this article was written, type A stock had a price of about $205,000 and type B had a cost of $137. I am not trying to make any investment recommendations, because I have no idea if these stocks will go up or down in the future. My recommendation to buy these stocks is purely based on the discount you will receive. If your only motivation to buy these stocks is to get the discount, I would probably recommend going with the type B stock.
After you have purchased the stock then call Geico at 1-800-861-8380 and tell them you want your Berkshire Hathaway shareholder discount. It’s as easy as that.
How much can you save?
Is it worth it to take the risk of buying the Berkshire Hathaway stock to get an 8% discount? It is always possible that a stock can lose money, and in extreme circumstances stocks can even become worthless. I’ll look at what I pay in insurance premiums as an example.
For auto and homeowners insurance I pay about $1,400 per year. At 8% savings, I would save about $112/ year. If I were to buy type A stock at $205,000 it would take me 1,830 years to make my money back (ignoring gains or losses from the stock during that time). That’s not such a great deal.
However, If I buy the type B stock. it will only take me 15 months to make my money back, which is a great deal.
But I don’t want to buy stock
Even if you don’t want to buy any stock there are other ways to get discounts on GEICO Insurance. GEICO offers discounts to many other groups including the military, many alumni groups, several credit unions, and a long list of other organizations. If you are a GEICO customer it probably makes sense to check out the list and see what kind of discount you can get.
Disclaimer: Nothing on this website should be taken as investment advice. Other than the fact that you get the discounts discussed in this article I have no opinion on whether or not the stocks described above are good investments or not.
Photo by Steve Dunleavy