Do People Choose the Cheapest or Most Recognized Car Insurer?

This is one of the most asked questions in the vehicle insurance industry. Everyone involved in promoting policies wants to know how motorists make buying decisions. Selling more is the sure way of increasing market share and in a way establishing a brand. Besides, they can sell other products and upsell to existing customers. So, let’s have a look at what is presented to us and how others select in order to see if it will help us in any way.

What the Surveys Say?

Many surveys show that name awareness is one of the key reasons for choosing a particular auto insurer. Unfortunately there is no conclusive answer as to how influential it is. One of the studies carried out in the UK by Gravytrain offers some insight into the price comparison or brand recognition question.

The survey carried out with over 2,000 people show that about 35% of those interviewed go with the names they recognize and trust. On the other hand, about 20% of vehicle owners always compare prices and go for the lowest quote. Others don’t check for alternatives often but they probably do when they see unexpected premium increases.

One of the most important findings of the study is that these figures quickly change depending on the age and background of the participant. For example, large numbers of (43%) 55+ year old motorists always buy from brands they know. In contrast, more of (31%) 18 – 24 year olds are likely to choose an automobile insurer with the lowest quote. This may be to do with differences in computer savviness, as well as social and economical status of each group.

You have to look at these figures carefully and closely to make sense of them. Clearly 55+ year olds must have come across a lot more companies throughout life than the 18 – 24 age bracket. For example, if they get 10 quotes from different sources they probably recognize 6 or 7 of them that would make their choice easier. Also the study suggests that people with lower income are more likely to go with cheap car insurance. This is probably one finding that is hard to argue with; people with limited budget look at price first.

What Do US Auto Insurance Companies Think?

Certainly, each would have some sort of an opinion on it. However, looking at the latest advertisements and comparing them with the ones from 3 decades ago can give us some indications. Many experts point out that they were stressing how trustable they were 30 years ago. The same companies appear to be concentrating on sending a different message today that their policies are much cheaper and you can save money if you switch to them.

This may be an indication that more and more policyholders are looking into saving money on premiums. Certainly, it is a lot easier to compare car insurance quotes online these days thanks to many websites and platforms, including direct access to the official sites. They can deliver quotes in minutes that within an hour you would have a pretty good idea if you can get reduced rates or not. Once it is established that there are other options, drivers can start looking at coverage and quality.

On the other hand, we mustn’t forget that the only way most policyholders would be persuaded to switch is to offer them lower premiums. Current carriers are always at an advantage since policyholders already know them. So, larger companies with more money would hit two birds with one stone (advertising). Firstly, they would make many unsatisfied and new drivers aware of their brands. Secondly, they would appeal to those people who are pleased with existing coverage but would want to look at alternatives only if they believe they can save money.

What Do You Think?

When people are aware of a name they don’t really think why. It may simply be through TV or other advertisements instead of recommendations from friends and family. Still it is name recognition and it sells policies. Trust is very important in this business. Vehicle insurers mainly sell trust rather than policies. These days they are working heavily on price but a few years ago the main theme of commercials was reliability.

Considering how influential television and visual media is they can build trust and work on people who are concerned with the costs. For many people knowing a brand may be enough to choose it especially when they are confused. The fact of the matter is that it doesn’t matter how they know it in many cases. They just do and that is enough.

So, next time you choose an automobile insurance company think about what drives you to come to that conclusion. Do you really get many alternative quotes, find out about coverage and reliability and size them up? If you do, you probably make a smart decision based on real information, rather than relying on self-promotions.