Are you taking full advantage of the fact that auto insurers compete for your business?
An insurance customer in the UK, responding to an online story published in that country, made an interesting observation about how consumers spend inordinate amounts of time picking the color of their new vehicles and choosing options rather than shopping for insurance coverage.
Unlike with private health coverage in the US, Americans have a great many options when it comes to auto insurance because the industry is far less concentrated and much more diversified. The fact is that big and global or small and localized, auto insurers must compete – often quite heatedly – for the consumer dollar. To paraphrase a recent radio ad campaign, when auto insurers compete, you win – but only if you do your homework.
The Dangers of Complacency
Now, if you have other types of insurance through a particular company (such as homeowner’s insurance or life insurance), that company may very well offer you a break on your auto policy as well. In this case, there’s not much point in changing unless another company can offer you a better deal in this regard. However, most people get their auto insurance as a stand-alone product – and they don’t want to think about auto insurance until they actually need it. Many of them have been with the same insurer for many years. For them, it’s just easier than going out shopping.
After all, if it ain’t broke, why fix it – right?
Yet such complacency may result in paying out a lot of money that you shouldn’t have to pay.
The Auto Insurance Game
There are three sources of auto insurance in the world:
• huge, often trans-national corporations
• smaller, usually regional companies
• independent agents
Is one of these better than the others? It depends on your insurance needs. The “big boys” do not have sales representatives; they sell directly to the public. Because they do business in volume and do not have to pay out sales commissions, they are able to offer discounts to consumers who also buy other types of insurance from them. The down side is that such institutions are impersonal and difficult to communicate with (your claim is likely to be handled from a back street office in Mumbhai, India). Problems can take a great deal of time to resolve.
Smaller, regional companies have local agents working for them with whom you can meet face-to-face. Customer service is more personalized, and you know the agent who will go to bat for you when you have difficulties with a claim or payment.
Finally, there are free agents. These insurance salespeople represent several different companies and will shop around on your behalf in order to get you the best deal. If you are “insurance-challenged” – that is to say, if you have several traffic violations or an accident on your record that would make your policy more expensive – an independent agent may be your best option.
Don’t Forget the Web
Virtually all auto insurers have websites where you can quickly obtain quotes using online forms.
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