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Gabi Insurance Review | Can You Save Money?

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Let’s face it, hunting for auto or home insurance is a pain. It’s a numbers game and it can take you weeks just to sift and sort through rates.

Who has time for that? Thankfully, we live in the information age and there are services out there that can help. Today we’re reviewing one of those services, a relative newcomer called Gabi.

So, how does it rate?

We’ll give you the scoop about what Gabi is, how it works, and how it rates against competitors so that you can decide if this is a time-saver or not worth your while. Let’s take a closer look at Gabi Insurance and the service that they provide!

What Is Gabi?

Gabi is a nifty little bit of modern technology. Licensed to broker insurance in 50 states, Gabi’s ‘gimmick’ is that instead of giving a list of places and rates, they will ask you about your needs and sift through that information to simply find you the best rate.

How Does Gabi Work?

This is where things get interesting. You can give Gabi information about your current insurance plan and from there, it compares it to more than 40 top providers that are part of its network. Many of these are major players in the insurance industry, so you don’t have to worry that you’re being ‘pawned’ on a potentially unreliable ‘underdog’ provider.

https://www.bbb.org/us/ca/san-francisco/profile/auto-insurance/gabicom-1116-876760

If your current plan is the best rate, Gabi will tell you this, and if you don’t have a plan at all yet then you can simply answer a series of questions and Gabi will find you a provider within seconds. Oh, did we mention that Gabi also scans your driving record?

It’s impressive technology and we have a feeling that they’re on to something here.

Gabi also lets you enter in more variables in your search, such as student or senior-level coverage, and can help in finding discounts for purchasing coverage for multiple vehicles.

As far as homeowners insurance, Gabi helps to make sure that you aren’t missing out on potential rate-changers, such as previous claim-free years or owning a top-of-the-line home security system.

Everything gets factored in so that you can instantly get the lowest rate possible without having to read through 30+ projections and listings.

It’s basically like having an independent insurance agent at your beck and call, who can do the work of days in mere seconds or minutes.

Doe Gabi Include Major Providers?

We’d mentioned that several major providers are covered. Here are a few examples of members of Gabi’s network of providers to give you an idea:

  • Allstate
  • Nationwide
  • Geico
  • Progressive
  • Travellers
  • Mercury Insurance

Does It Cost To Use Gabi?

Gabi is a free-to-use, deriving their capital from the insurance companies that they are referring you to, rather than you paying anything. All you need to do is go to their website and you can use the tool completely free of charge.

What Makes Gabi Different from the Competition?

One very important distinction that Gabi makes is that they are not an aggregator. An aggregator makes a commission redirecting you to another provider and also makes money from selling your personal data.

Gabi is not an aggregator, but a broker, and as such, they sell you the policy directly and they provide you with service throughout the life of the policy that you’ve selected. This is a notable difference, as it were, as most of the ‘referral’ companies out there are contributing to the huge amount of spam that you are getting daily.

It’s refreshing to be able to use a service without the worry of that, so we are giving Gabi a thumbs-up on this aspect.

They also take things a step further, as their money-saving proprietary AI continues to search for savings throughout the lifetime of your policy. This way, you may take advantage of lower rates with other providers as they come available.

This takes out the need to constantly review your insurance out of worry and as such, saves you even more time in the long run.

The Breakdown: How Does Gabi Rate in Actual Use

The actual experience is very streamlined. You upload your current provider information, Gabi searches this and your driving record, and you are presented with quotes. When you select a quote you are given a chance to purchase said insurance but you will still need to cancel your old policy.

You will also need to find out your current provider’s refund policy if you already have insurance. While most providers will give you a prorated refund, you’ll still need to calculate the difference to determine if you are still saving. Aside from automating this portion of the experience, Gabi seems quite useful.

What We Liked About Gabi

We liked a lot of things about Gabi and we’ll sum them up below:

  • Savings – Comparing rates through competitors’ searches, the information appears good so you can indeed save money. Gabi reportedly saves customers about $800 on average and we’re inclined to believe that. The tool seems to work as advertised.
  • Ease of use – It’s nice being able to use your existing policy, as most of us have spent a good amount of time selecting exactly the right coverage in the first place. This option means that you don’t have to worry about losing any coverage that you already have by accident and that gives a little peace of mind.
  • Wide coverage range and major providers – With 40+ providers and a wide range of different coverage types that you can purchase, Gabi should fit the needs of just about anyone who needs auto or home insurance.
  • Quote bundles are available – Gabi lets you do searches for home and auto insurance bundles, which can save you money and make it easier to manage your coverage. This is a nice option that not all providers give you.
  • Privacy – It’s a breath of fresh air not having your personal information blasted all over the internet and that’s not something that you see every day with this kind of service.

Where We Felt Gabi Could Use Some Improvement

Every service has its caveats and here is where we felt that Gabi could use some improvements:

  • While they have a lot of providers, we would like if their network was expanded to include more than their current 40+ as there are likely still some deals out there being missed.
  • The quote that you are given still has to be reviewed by the actual insurance company, so there could be changes. This is something to consider before canceling your old policy.
  • Gabi doesn’t read .pdf files very well and so if you upload a .pdf of your policy then you will have to wait for them to report back. This can take up to 2 days, so we were a little disappointed there.

The Final Verdict

All in all, we have to say that we were impressed with Gabi’s innovative business model. You essentially get the services of a dedicated independent agent with everything being done at the speed of a machine. While we hope they expand their network a bit, our testing indicated that the savings were indeed significant.

Consider our verdict a solid thumbs-up for Gabi and we’re looking forward to seeing what they do in the future. In the meantime, you don’t have to take our word for it.

Feel free to give them a test so that you can see it for yourself. As Gabi does not sell your information, you won’t be added to any mailing lists and the service is free to use.

We think that you might be pleasantly surprised!

Image by:[Samad Murghal]

Lending Club Review

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At a time when investors are making record low interest rates of little more than 1-2%, there is an opportunity to earn much higher returns through peer-to-peer investing with Lending Club.

And for would-be borrowers, the news is almost as good. They can borrow money from Lending Club investors at rates generally below those offered by credit cards. They can do so without putting up collateral and without all the red tape that comes along with borrowing from a bank.

Note: A few years back Matt used Lending Club to consolidate his debt and has been investing with them ever since paying off that loan. Over the last three years he has averaged an interest rate of over 10% on his investments with Lending Club.

What is Lending Club

Lending Club is a “peer-to-peer” lending company, matching borrowers directly with lenders.

The model removes banks from the process, enabling the borrower to pay a lower interest rate, and the investor to earn a higher rate of return. The company is the first peer-to-peer lending organization to be registered with the Securities Exchange Commission.

The company began operations in 2007 and has originated over $1 billion in loans.

According the company’s website, the latest statistics–as of November 23, 2012–include:

  • Loans funded to date: $1,348,306,700
  • Interest paid to investors since inception: $114,375,168

77.32% of Lending Club borrowers report using their loans to consolidate debt or pay off their credit cards. Can I get an Amen?

How does Lending Club work

Both investors and borrowers can go to the Lending Club website, sign up and investigate the loan programs available, including loan requirements and grades, interest rates, terms and any other factors connected with the transaction.

Loans sizes range from $1,000 to $35,000 (the maximum loan amount), and are unsecured, personal loans. If a borrower is determined to be credit worthy, Lending Club assigns them a credit grade that determines the interest rate charged. Credit grades are determined by the borrower’s credit characteristics, including credit history and credit scores, loan amount and debt-to-income ratios.

Loan (or note) listings are provided on the Lending Club website that reveal the loan grade, loan amount, and loan purpose. Investors can choose loans to invest in from the listings, deciding, for example, what loan grades and interest rate terms they deem acceptable – then they can save the filters and use them later to find and fund more notes.

How investors benefit from Lending Club

According to the site, Lending Club has over 45,000 investors who have funded more than $1 billion in loans. And they have collected over $114 million in interest payments.

Lending Club Notes ($20,000 denominations) have a net annualized return that is determined by loan grade. For an A note, the net annualized return is 5.66%, ranging up to a G note with a return of 12.07%. The nominal average interest rate is 14.21%, with an average default rate 4%, and an average net annualized return of 9.64% (Matt is currently earning at 10.23%).

Lending Club itself makes money by charging a service fee to investors and a loan origination fee to borrowers, similar to points charged by a mortgage lender.

Investors start by opening a account with Lending Club and depositing their money. They then choose the loans they want, based on the expected rate of return on investment and the level of risk they’re comfortable with. Higher rate loans also carry higher risk, while lower risk loans offer lower interest rates.

How Borrowers benefit from Lending Club

Borrowers can borrow money through Lending Club for less than they’ll pay for most other loans. Since there’s no “middle man” in the Lending Club process, they can see a loan approval in less time and with much less documentation. Borrowers can get debt consolidation loans to pay off credit cards charging, say, 15% with a loan from Lending Club carrying a rate well under 10%.

Which is exactly what Matt did. He consolidated three credit cards and an auto loan, then paid it off in seven months.

Lending Club isn’t a “no other way” lender, and there are some stipulations that keep loans primarily to higher quality borrowers. According to the website, fewer than 10% of loan applications are approved. The credit standards are pretty stiff, with a minimum credit score of 660.

This is because Lending Club likes to deal with borrowers who are going to pay off the loans. Makes sense right?

Some statistics on the profile of the average borrower from the site:

  • 715 FICO score
  • 14.98% debt-to-income ratio (excluding mortgage)
  • 15.21 years of credit history
  • 68,831 personal income (top 10% of US population)
  • Average Loan Size: $12,159

Even with the high credit standards required by the program, Lending Club offers tangible advantages for borrowers who do qualify.

As mentioned above, 77.32% of Lending Club borrowers report using their loans to consolidate debt or pay off their credit cards. How cool is that?

Betterment Review

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The past few years have seen the rise of a number of specialized, online investment management services. One of the better programs out there is Betterment.

Betterment describes itself as “The fully diversified, automated, and smart investment account that helps you feel good about your future.” It offers a simple, efficient investment system that will appeal to a large number of investors.

How Betterment Works

Betterment uses a simple investment strategy that’s based on two investment options, referred to as baskets. One basket is made up of stocks and the other of treasury bonds. But rather than holding individual stocks, each basket is comprised entirely of a mix of exchange traded funds (ETF’s).

As an investor, all you need to do is set your portfolio allocation and the system handles your investing for you.

Unlike many online investing services, Betterment does not require a minimum opening account balance. If you open your account with less than $10,000 however, you will be required to make monthly deposits of at least $100 until the balance is achieved. Once you reach the $10,000 mark, continued monthly contributions are optional.

You can move money easily and automatically between your Betterment account and any outside accounts you have with next day transfers. The system also allows you to do investment projections online simply by changing asset allocations and projected contributions.

One of the coolest parts is that you can “try before you buy” so-to-speak by running savings goal scenarios before actually committing the money to those investment mixes.

Betterment will also give you $25 if you open and account with at least $250.

Betterment Pricing

In regard to investment fees, Betterment has no transaction fees, but charges a management fee based on portfolio size. There are three pricing tiers that determine the amount of the management fee:

  1. for accounts under $10,000 the annual percentage charged is .35% of the balance,
  2. for accounts of $10,000 and up to $100,000, the fee is .25% of the balance,
  3. for balances of $100,000 and higher the annual fee is .15% of the balance.

If your account balance is $100,000, your annual account management fee will be .15% of the balance, or $150.

This makes betterment one of the lower cost investment systems around, especially on accounts with higher balances.

Betterment Advantages

Pricing is an obvious advantage with Betterment. To be able to maintain $100,000 of managed investments for just $150 per year would be difficult to duplicate elsewhere.

Simplicity is another advantage. You can set your portfolio allocation between stocks and bonds and management will take it from there. You don’t need to actively trade, to follow your investment positions on a daily basis or to make changes.

Betterment also has professional management which saves you the time and effort that will take to become a successful investor. And rather than investing in stocks, management invests instead in ETF’s. That not only keeps trading expenses at a minimum, but it also achieves significant diversification within each asset class.

Management’s investment philosophy also seems very solid. The bond basket is invested in ETF’s that hold Treasury Inflation Protected Securities (TIPS) with maturities of three years or less. That minimizes interest rate risk that is inherent with longer-term bonds. This makes Betterment’s bond positions more secure than typical bond funds

The stock position is held in ETF’s that invest in value funds and small-cap funds. At this time the entire stock portion is held in US based stocks. Betterment holds the stock position in several ETF’s that are determined by management to best achieve the program’s investment goals for its equity positions.

Like many of the online investment systems available, your holdings in the account will be limited to Betterment’s baskets. You will not be able to hold individual stocks, mutual funds, or ETF’s as you would in a typical online brokerage account. Betterment is, after all, a managed investment account, and not a general investment account. This is how they keep it simple for you, the investor.

On balance, Betterment looks to be a good investment choice for most investors, particularly for those who are looking for aggressive equity investments, counterbalanced by conservative bond investments. And the cost and simplicity will be hard to beat anywhere.

You can get more information on how Betterment works, and take advantage of a free 30 day trial offer and the $25 bonus by visiting the Betterment website.