Is Getting a Cheap Rate All That Matters on Your Auto Insurance?

You have all seen or heard the ads: Call now and save 15% or more on your car insurance. Sadly, when someone is potentially selling substandard coverage or service, the only marketing ploy they have, seems to be to get the cheapest rate.

This mentality leads consumers to think that the only difference between insurance companies is price. However, auto insurance is not a commodity; but rather a set of coverages, service, and claims paying ability that can vary from company to company. Ironically, the supposed savings from not going through an agent is being replaced by the cost of some of the most expensive advertising budgets ever seen.

It is important when shopping auto insurance, to compare apples to apples. Sure, if you want to start giving up important coverages and good protection that might save you thousands in a claim situation, we can get your price down; however, we want to make sure that you are protected for when you need the insurance the most.

Let me share this real story to illustrate the danger of thinking only about price. An agent had an insured’s house covered but their car was insured with a save 15% company. The actual claim read as follows: Our insured’s car was stolen and destroyed. The carrier denied the claim because the keys were in the car and there was no sign of forced entry. According to the adjuster, the policy does not cover theft without evidence of forcible entry.

While the standard insurance regulated auto policy has no mandatory exclusion, this specific carrier’s policy did have the exclusion. So, the insured is out almost $20,000 on his car, but he did (supposedly) save 15% on his premium!

Conclusion: getting the cheapest price should not be the only consideration on obtaining auto insurance. Know what is covered and what is not, and research the claims paying ability,the financial strength, and service of your carrier.

Our three A+ rated auto carriers: Travelers, Progressive, and Mercury all offer great coverages, service, and claims paying ability at reasonable prices. Call us for a quote or to review your current policy to make sure your coverages are adequate to protect you!

Next month’s article: Why do insurance companies require so many inspections?


January 18, 2011

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