3 Indicators for Reliable and Affordable Auto Insurance Companies

Three indicators for reliable and affordable auto insurance companies stem from the provider’s service, finances, and attention to small details. Considering these factors when seeking a reliable carrier will virtually guarantee you’ll deal with a successful company that values its customers.

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Trying to find a dependable car insurance company with low rates will take some exploring. There are hundreds of companies out there with incredible claims. Most of these companies lure their customers with promises that they claim no one else can match. Others market discounts that only apply to a small group of consumers.

Consider Just the Facts

Ironically, larger auto insurance companies spend so much time competing with each other that they have left the door open for newer, smaller agencies to emerge.

Some car insurance companies invest in television, radio, and Internet advertising that makes their product seem superior to that of competitors. Nevertheless, when you start comparing their offers, it can be hard to spot what makes each company unique.

Consider the vanishing deductible offers or accident forgiveness plans. With the exception of a few, minor differences, the features and benefits remain identical for each company.

Many consumers think they can simply find a basic policy with comparable coverage.

However, the only way to ensure you have a solid company protecting you and your vehicle is to delve into the investigation process.

Ignore the catchy jingles, funny mascots and celebrity endorsements – these distractions merely help companies build their appeal with consumers. Instead, carefully consider the facts and statistics. The unbiased information you find will be far more impressive than a dancing frog or clever catch phrase.

Experience and Established History

Most dependable car insurance companies that provide annual premiums within your means have been in business a long time. They have an established background that has helped craft their reputation based on service and customer satisfaction.

Many of these reliable companies include industry pioneers that found efficient ways to service their customers. They combined technology and next-generation applications without compromising the personal touch that many consumers want.

They mined ideas to meet customer demands and worked proactively to solve problems that were not yet visible.

Because these auto insurance companies can handle current customer needs and anticipate potential problems, they continue to succeed in growing their customer base. Confidence in their abilities appeals to new drivers and helps to retain long-standing customers.

The two oldest and most trustworthy car insurance companies are Traveler’s Insurance Company and the Automobile Association of America, also known as AAA.

Traveler’s issued the first car insurance policy back in 1853. AAA began writing policies as far back as the turn of the 20th century.

Although Traveler has endured several changes between 1990 and 2000, the company remains true to its initial concept: to provide low-cost car insurance for responsible drivers.

Through its visionary efforts, AAA created the first drive-through service center and was the only company that serviced more than 100,000 customers within its first five years of business.

Obeying State Laws

Before searching for low rates, which vary by state, you must understand how the automobile industry functions. Each company has a certain leeway when setting premiums. It provides corresponding state regulators with specific data to align with current laws.

Officials in some states, like Ohio or California, work for the Department of Insurance. Other states, like Wisconsin and Washington, rely on a Commissioner of Insurance office. While the names differ, these officials’ job descriptions remain the same. They receive reports from every registered insurance company and review their plans.

Their job is not to set or change all insurers’ rates. Rather, their objective is to focus on policy statutes to ensure compliance and determine whether the companies’ procedures meet the public’s best interest.

As long as car insurance companies stay within the limits, they can write policies for any amounts they see fit.

How They Treat Customers

You can find reliable car insurance companies with low rates by checking with current customers. Countless online forums – found with a simple Internet search — allow car insurance customers to discuss the pros and cons of their providers. This is one of the best ways to discover inside information.

Particularly unsatisfied or pleased customers often go out of their way to comment on Web-based forums to chastise or promote their carriers. Just realize that their feedback might be tainted by emotion.

You should also try a few of the major consumer feedback sites like Consumer Affairs, Consumer Search and Consumer Reports. You can also go to the oldest and most trusted organization, the Better Business Bureau.

The BBB has gathered data for all kinds of companies since 1912. Its user-friendly site discloses a company’s number of customer complaints and separates them by category and year. See an example here in their review of Geico. The site also provides descriptions of conflict resolutions and issues each company an overall rating.

You should utilize several of these resources and attempt to cross-reference each company you research.

For instance, using just one source can produce inaccurate results since some companies may not register with the BBB and some customers may not list their complaints on national websites.

Forums are great, but opinions sometimes are prejudiced, especially with difficult customers. A combination of two or more opinion sources should paint a fair picture of the auto insurance company’s reputation.

Money Management

When it comes to offering reasonably priced car insurance rates, you should investigate the way an automobile insurance company manages its money. To ensure stable prices and steady offers, the company must have a balance of profit and losses. In other words, it must have strong earnings with minimal customer turnover. This is just good business.

A.M. Best is one of the most popular ratings companies that report for various insurance companies, including the car insurance industry. Compare their review of Geico here.

Most people choose the service because of its history of honest and forthright statistics. However, many consumers may overlook another trustworthy resource, NASDAQ. The stock exchange’s website provides a great way to review a car insurance company’s business dealings in real time.

Larger corporations, like Berkshire Hathaway, Geico, State Farm, Progressive, Nationwide and Allstate, have public stock exchange symbols. You can see how well these companies perform just by looking at their stock’s value.

When the stock’s dollar value increases, the company expects great returns on its investments. This gives the company a strong position. NASDAQ also has excellent forecasting tools that can help you estimate how a company’s stock will perform in the future.

Although this site provides a nice roadmap, remember: Rome wasn’t built in a day.

Similarly, building trust in your chosen insurance carrier takes time.

Managing finances correctly takes long-term planning, so use stock exchange information as a guide of things to come. For instance, if you begin to see declines in a company’s price, you can safely expect a rate increase for your car insurance premium.

Consider the Fine Points

To encourage customer retention, auto insurance companies must incorporate loyalty programs and extend their claims process to cover a multitude of issues. Cut-rate car insurance companies may provide lower premiums because they have loopholes in their agreements. They may not protect you from certain types of damage, namely natural disasters or extreme weather.

There are tradeoffs for everything. For instance, some insurance carriers may encourage you to park your car in your home garage as a way to lower your premium. Parking on a lot or on the street carries a higher risk. However, should your home receive fire or other damage, the company may want you to reach out to your homeowner’s insurance provider for compensation.

Comprehensive coverage can be very tricky and an unreliable car insurance company will find ways not to pay.

If you live in a region that is prone to flooding, the company may require you to sign a waiver on damage related to this natural event. Alternatively, the policy may feature sweeping restrictions; for instance, you may want to take out a policy for $300,000, but the company may allow a maximum of just $100,000.

Ensure They Use Authorized Repair Shops

Before choosing an automobile insurance company, ask potential providers if they use authorized repair shops. Many car insurance companies offer a list of approved repair shops they want you to use if your damaged car requires extensive work.

If you decide to select one of these shops, ensure it uses replacement parts approved by the Specialty Equipment Market Association. These parts will stand up to the wear and tear of the original manufacturer’s equipment.

Failure to comply with these standards can void your vehicle warranty and violate the Environmental Protection Agency’s emissions regulations.

Certain states, namely California, have stringent laws regarding these mandates. Because the atmosphere can be so fragile, your car insurance agency must work with reputable repair shops.

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