Why You Should Consider a Smaller Car Insurer
Why You Should Consider a Smaller Car Insurer, When it comes to auto insurance, bigger doesn’t always mean better. Checking with smaller insurers is also advised. How many auto insurance providers are there that you can immediately name? It’s probably less than ten.
In actuality, there are over 2,400 auto insurance companies in the country competing for your business. However, the majority of drivers choose making their purchases from well-known brands. According to a recent poll conducted by Expertise.com, a website that investigates and evaluates leading service providers, nearly 60% of participants stated they would purchase an insurance policy from a business they had seen an advertisement for.
However, these massive insurance companies do not necessarily provide the finest customer service or the most affordable auto insurance.
In fact, NerdWallet’s rates investigation showed that the cheapest auto insurance rates weren’t from one of the country’s major providers in 23 states.
Here are three more explanations for why you might want to go with a less well-known insurer.
Not by happenstance do well-known insurers become household names. Consumer data source Statista reports that the four biggest auto insurance companies in the country invested more than $3.75 billion in advertising in 2020.
The amount you pay for auto insurance may be mitigated, however, by the fact that many lesser-known insurers don’t invest as much in advertisements, according to Robbie Moore, executive vice president of Blanchard & Calhoun Insurance Agency, an independent insurance company with headquarters in Georgia.
Nevertheless, there’s no assurance that a smaller carrier will provide lower prices than more well-known ones. Compare prices from a number of large and small providers to discover the best deal on auto insurance.
Better customer service
You might be hesitant to work with a company you haven’t heard of, but that doesn’t mean a less well-known insurance business will give you worse service.
A study from the National Association of Insurance Commissioners (NAIC) found that some smaller companies had fewer customer complaints than the biggest names in the business over the last three years.
Also, a 2021 study on auto claims satisfaction by customer research firm J.D. Power found that only half of the eight insurance companies that got above-average scores were among the biggest in the country.
A lot of the time, smaller brands will do extra to get your business and keep it. Moore says, “They really take the time to get to know you when you’re going through a claim. It’s a very personalized experience.”
You might think that a small insurance company won’t have as many coverage choices as a big name insurance company, but this isn’t always the case. By law, all auto insurers must offer at least the bare minimum of coverage. On top of that, they usually offer basic coverage like collision and comprehensive insurance, which pay for repairs to your car.
There are times when smaller companies can offer coverage choices or extras that bigger companies don’t normally offer. For example, some companies offer free extras like forgiving accidents or pet insurance along with a basic auto insurance plan.
Moore says, “I think they know that because they are smaller and you haven’t heard of them, names won’t help them get your business.”
If you want a carrier that works well with tech, you might want to stick with well-known names. A bigger company might say that its products are more high-tech than those of its smaller rivals. Before you decide on an insurance company, you might want to check out their website and app.
A smaller company might not sell policies in as many places as a bigger one, either. Due to this, you may need to switch service providers if you move.
How to choose a car insurance company
Before getting an insurance policy, you should always look into the company. Make sure it has the coverage you need and any extras you want, like not having to pay for accidents.
Find out how financially stable a company is to make sure it can pay your claim if you need to make one. A rate company like A.M. Best can tell you how financially stable a carrier is. On the NAIC page, look at the list of customer complaints.
You might want to work with an independent insurance agent who can put you in touch with both national and neighborhood insurers. These workers don’t just work for one company; they work with a number of different ones. Agents who work on their own usually get paid by fee and can only sell insurance from companies that work with them.