How Much Do Cheap Quotes Affect Car Insurance Choice?

It is an acceptable argument that automobile insurance market is a highly competitive one. They not only compete in price but also in quality of policy offerings, claim handling and customer service. This raises a particular question; can you switch and be equally satisfied with whatever company you go with? Ignoring one or two exceptions, would this assumption hold? If it does, it would make the selection process very easy for everyone.

Is Auto Insurance a Commodity?

One future of a commodity is that it has a definable price and would that apply to policies? Would customers be able to say how much is so much coverage? Then, drivers would only need to look at premiums quoted before making a choice for the same package.

This is a point most twisted in the industry. Agents and brokers use it the way that suits them. When they see customers going away because they found a better deal they pull out the quality card and say things like “price may be lower but do you get the same quality of coverage and reliability?” They have no hesitation to suggest that there may be something wrong with cheaper vehicle insurance quotes. Usually, they don’t even bother to check it for you to ensure you are getting good value. It is just a de facto response used to scare people.

Then whenever it suits, they wear a different hat and say things like “you get the same coverage but it is cheaper”. You cannot blame them, as their job is to sell a policy. And they see nothing wrong with taking sides especially if it pays to take sides. Remember their only source of income is commissions.

The fact is that it is hard to quantify how good a certain carrier and how reliable their products. It is even harder for customers to compare them because they will have real experiences when they have a claim and even then they will only come to really know, appreciate or hate the ones they came into contact with. So, what if a current carrier came up with goods when they needed. Does that make others bad?

Competition Brings Car Insurers in Line

It is a fair assumption that they are watching each other closely in the industry. If you were switching from one established company to another there would be only slight variation on service and claim handling. As long as you get a cheaper quote for the same coverage you should be all right to switch auto insurance companies.

There are only few studies that tested similar theories and the common conclusion is that they can be ranked looking at various data but there wouldn’t be a huge difference between them. For example, several of them may be faster and more generous in terms of claim settlements but the rest isn’t far behind.

Besides, most people buy a policy just in case they might face a loss they cannot handle on their own like liability claims or stolen auto. Many motorists go years without facing any trouble. If that is the case, what if it takes one or two weeks longer to get compensated (assuming the cheaper company has a worse claim handling record) when you have one?

On the other hand, the prices can be significantly different from one to another. Several studies show that you can save as much as 50% especially if you have stayed put and never done comparison-shopping for a few years.

Perhaps it is fair to say that your personal viewpoint will be highly influential when it comes to making a decision to stay or stick. For example, someone can take a point of view and say that car insurance quotes that are obtained on the same coverage bases are interchangeable. At the end, any policy bought should not have significant enough difference even from the best. Therefore, why would you not pick the cheaper one and save some money?

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