Change Companies for Better and Cheaper Car Insurance

Many motorists put up with bad service and high premiums for far too long. Unsatisfied policyholders should replace auto insurance carriers with cheaper and better ones at the first chance. Drivers are usually forgiving and prefer to stay put but companies find ways to keep disappointing them. One bad feeling is quickly remembered when the services start playing up again. So, providing good service is the key to retaining policyholders and it is more important than keeping the prices same or lower at renewals.

When motorists are content they are probably not going to shop around for cheap rates. Actually, being happy usually includes being happy about the premium paid as well. On the other hand, less than fully satisfied policyholders may quickly be tipped over the edge with premium increases and look for alternatives. They are a lot more likely to switch car insurance companies with better ones even when the price difference is not much.

satisfied policyholder

This theory is recently supported by a J.D. Power analysis. Their findings are that poor service is the main reason for replacing automobile insurers. They lose more customers because of this than having higher or increasing premiums.

According to this study, about 13% of policyholders decided to look for alternatives after receiving rate increases. On the other hand, 28% of the shoppers decided to change vehicle insurers when they received a lousy service. This goes to show that people are more motivated to make the move when they are badly treated.

Which Areas of Services Are the Most Important?

If car insurers want to avoid losing policyholders to rivals they need to listen to complaints. The areas needing improvement are claim handling, billing resolution and overall communications. Being informed about the price and other important developments is appreciated by clients of most businesses.

And new customers want to see that the savings offered are the real savings rather than the ones achieved by rehashing the coverage. Drivers are worried that they will be losing out on coverage when the price goes down. In addition, they get disappointed when the savings are nowhere near what the advertisements claim.

Is It Worth Changing Automobile Insurance Companies?

According to J.D. Power, about 1/3 of policyholders shopped around for better offers and about 1/3 of them ended up making the change last year. The motorists who switched saved on average $300 per annum. No doubt, this would be good enough for most people.

Nonetheless, many people in the survey complained that they were hoping for even bigger savings. The general problem appears to be the misleading advertisements. People start the search with a big discount expectation because of these campaigns promising just that. When they cannot save as much as they hoped for they get disappointed.

While motorists would usually find lower prices from other sources when they carry out comparison shopping, a few people may not be impressed enough with discounts. In a way, people get disappointed when they can only save a couple of hundred bucks because the advert promised them $500 or more!! The good news is that they are encouraged to look for better deals thanks to promotions run by insurance companies.

Here are the other findings of the report.

  • It appears that underwriters have been managing premium increases a lot better lately. They explain well why the premiums have to increase and stress that they still get value for money. This is how it should be, rather than hoping that nobody will notice.
  • Many drivers are happy to stomach the small rate increase. However, they are three times more likely to look for alternative quotes and replace car insurance carriers with cheaper ones when they face a more than $200 hike. Large numbers of policyholders face hikes below $100 while about 50% see no movement or reduction in premium.
  • The savings are likely to be greater when policyholders shop around after being with the same company for a while. According to the experts, this is because they have been seeing premiums going up slowly for a number of years.
  • Customers who have stayed put for at least 11 years saved nearly $430 pa on average when they switched. It is about $290 pa when it is only 2 years. So, you don’t have to wait long to get good discounts.
  • 80% of motorists remained with insurers after the first year when they were highly satisfied. Only 40% of those shopped around. Only 60% of unhappy motorists remained. And also 60% of those unhappy people looked elsewhere for better deals (as opposed to only 40% of happy ones). This supports the key findings that customer satisfaction is the main reason for switching automobile insurance carriers.
  • Among the 23 assessed by J.D. Power, Erie, MetLife, State Farm and USAA were the ones with the best customer satisfaction. Farmers, Progressive, Safeco, 21st Century, Travelers and Mercury were the ones with the lowest ratings (out of 23).
  • It should be kept in mind that there are hundreds of them in the USA, including a few regional names that may not have been excluded due to their size.

How to Find Companies with the Best Customer Service?

These figures may lead to questioning the quality of service you receive. If you are one of those motorists who wants decent care here are the tips to find them.

  • Check State Insurance Department Reports: They publish “consumer complaint ratios” on their websites. These figures show how many complaints a firm receives per 1,000 policies sold. These reports should give you a good idea about the picture in general and how the one you are considering is doing. If your state doesn’t provide such reports you can check the neighboring state reports.
  • Ask Family and Friends:  You would trust their recommendations more than anyone else’s. First-hand experience would be more valuable than any other recommendation.
  • Look for Other Independent Customer Satisfaction Reports: When you search online you can find a few people and firms rate insurance providers based on various figures. These could come from independent studies, research firms, accident lawyers and consumer advocates. Large independent websites may carry out their own studies and publish findings as well. You are highly advised to check them before you swap vehicle insurance providers.
  • Check Financial Strength Ratings: Standard & Poor’s and A.M. Best publish these reports based on ability to pay out claims. Some organisations display these ratings on their own websites. Standard & Poor’s publishes the firms with at least BBB ratings. This doesn’t tell you much about contentment but those don’t come to where they are if they are not good at it.
  • Ask Recommendations from Auto Body Shops: They are the ones who will fix it after an accident. Furthermore, they deal with many insurance companies and should be able to tell you which ones they are having problems with. Or which companies care less about making sure customers are fully satisfied after the repairs and care more about how cheaply they can get those repairs done.

Always Compare Competing Quotes

Unfortunately, there are carriers with terrible service and yet very expensive premiums. You would be the unluckiest driver if you paid tons of money and still end up with a lousy car insurance company. So, make sure that you don’t pay too much while looking for good care. Regardless of being satisfied or believing you are paying reasonable rates you should make a habit of getting several quotes from alternative sources at each renewal.

Besides, there is no reason why you shouldn’t replace a vehicle insurer when the service is bad. You can find an affordable quote from a highly reliable one. Generally, intermediaries love to use the phrase “You get what you paid for”. Although there may be some truth in that saying, paying more doesn’t guarantee full satisfaction. You should at least know that you are not being charged ridiculous amounts. It is so easy to do so with online quotes that it is a wonder why people wouldn’t check what else is out there.