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Besides Price, What Factors Differentiate One Car Insurance Company from Another?
Oct 28, 2021
Cost is important, but it is not the only thing to consider
The marketing used by the one-choice-fits-all, direct/online auto insurance companies would have people believe that the only significant difference between insurance companies is price.
What you pay can vary by company and is undoubtedly an important consideration. However, other factors are essential when comparing car insurance offers. Here are a few things that should be considered:
Financial Rating of the Company:
A company’s financial rating is an indicator of its ability to pay claims in a worst-case scenario. Since insurance’s primary function is to transfer the risk of significant financial loss, a company’s financial stability may be of interest. You can see your company’s rating by checking them on online third-party services. The most rating popular rating service is:
- AMBest Financial Ratings: https://ratings.ambest.com/search.aspx
The Company’s Customer Service and Satisfaction Ratings:
Companies are rated based on how well they provide service to their customers. Among the most popular services that track customer satisfaction are:
- JD Power & Associates:
- Auto Insurance Satisfaction: https://www.jdpower.com/business/press-releases/2021-us-auto-insurance-study
- Home Insurance Satisfaction: https://www.jdpower.com/business/press-releases/2021-us-home-insurance-study
- New York Auto Complaint Ratios
- https://www.dfs.ny.gov/system/files/documents/2021/04/2020_auto_complaint_ranking.pdf
Coverage Enhancements:
Despite what many think, there are differences between how liberal versus restrictive auto insurance contracts can be. Some companies lean towards providing restrictive language and coverage options, while some companies offer consumers a broad range of coverage enhancements and features. Some of those options are a great place to engage with your agent to help determine what makes sense for your situation.
Agent Representation:
Does your company come with an agent who can advocate on your behalf without bias? An Independent Agency/Agent represents you and not just one company. They are in a unique position to assist you with:
- objective advice and counsel regarding the price you pay
- the service you will receive
- the coverage options available.
A quality independent agent represents
you
and is not beholden to any one company.
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