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Can you trust a car insurance company if you’ve never heard of them before? What happens if you are in an accident? If you’ve never heard of them, will they go out-of-business right as you need them? Here are the top five reasons to change to an unknown insurance company.
The First Reason To Change To An Unknown Insurance Company:
Insurance Companies Have To Cover You. PERIOD.
We’ve all heard of those companies where their prices seem too good to be true. The online scam for a free trip to Paris for two. Or maybe the big screen TV you win if you complete enough surveys. And the eBay seller whose account magically disappears after you click “Buy Now”. All of these experiences make us nervous about trusting a new company. You can rest assured that any legitimate insurance company is so heavily regulated that they can’t be a fly-by-night operation. In order to legally issue insurance, they have to prove they have enough funds to pay out for the coverage they provide. Above that, some states require that all the insurance companies pay into a monthly fund to cover any expenses that one insurance company cannot pay should they somehow fail.
The Second Reason To Change To An Unknown Insurance Company:
You Don’t Have to Pay for Their Ads
It may seem strange but all companies have to get the money from their ad budgets somewhere. This money either comes from investors, loans, or customers. Every time you see an ad for Geico, Nationwide, The General, Progressive, Allstate or State Farm, just remember that their customers are probably paying for you to see that. Super Bowl ads get more expensive each year and so does your car insurance. Any correlation there?
The Third Reason To Change To An Unknown Insurance Company:
You Get The Same Coverage With Them
Since car insurance is based on the same coverage options, you end up with the same coverage no mater where you go. State Farm’s 50/100/50 coverage is just the same as SafeCo’s. Progressive’s collision coverage covers the same events as Root’s. The only differences are minor features and options. For example, some carriers offer accident forgiveness if you have had them for several years. Progressive will let you have full-coverage insurance with $2,500 deductibles whereas several other carriers only allow $500 or $1,000 deductibles. Some carriers offer Gap coverage on financed cars. Most of these features are overpriced or unnecessary.
The Fourth Reason To Change To An Unknown Insurance Company:
You Support Smaller Businesses and Competitive Rates
If you think about it, the only thing keeps car insurance rates down is competition. There aren’t laws to keep them at a certain price. Since car insurance is a requirement to drive, you have to buy it. Hypothetically, if a car insurance carrier was the only company in your state that could sell you car insurance, they could hike up rates until only the richest people could drive. Could you image paying $1,000 a month on car insurance? I’ve seen rates that high.
When you buy insurance from a smaller insurance company, it keeps them in business. This probably helps the local insurance agent support his or her family but it also makes it so that the larger guys can’t hike up their rates. If Geico, Progressive and State Farm charged you $150 a month but word got out that Root only cost $65, the larger companies will have to be careful before raising their rates to $200 a month for fear of losing customers.
The Fifth Reason To Change To An Unknown Insurance Company:
You End Up Saving A LOT of Money!
When I got car insurance for the first time, I was paying about $175 a month for liability for a 13 year old Ford Focus. When I switched to Root, the cost went down to $62 a month for full coverage with insured and underinsured coverage. That’s saved me $113 a month! What would you do with an extra $1,356 a year? Buy a new TV, have the downpayment on a new car, or make that family vacation last a few extra days. Wouldn’t that be worth a few minutes of your time?
What To Use The Best Insurance Company?
Download The App And Take Root For A Spin!
Read my review here!
Adam is a license Property and Casualty Insurance Agent for over two years in 25 States. He has worked with 10 different insurances companies. His interests include marketing, insurance, sales, and personal finance.