This is one of the most asked questions in the auto insurance industry. Everyone involved in promoting these companies want to know how motorists make their buying decisions. Selling more policies is the sure way of increasing their market share and in a way establishing a brand. Besides, they can sell other insurance products and upsell to their existing customers.
What the Surveys Say?
Many surveys and studies show that brand recognition is one of the key reasons for choosing a particular auto insurer. Unfortunately there is no conclusive answer to this question in terms of how important is brand recognition. One of the studies carried out in the UK by a company called 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 choose to buy from car insurance carriers they recognize and trust. In comparison about 20% of vehicle owners always compare prices and go for the lowest quote.
One of the most important findings of the study is that these figures quickly changes depending on the age and background of the participant. For example, large numbers of (43%) 55+ year old motorists always buy from brands they recognize. In contrast, large numbers of (31%) 18 – 24 year olds are likely to choose an automobile insurer with the lowest quote.
You have to look at these figures carefully and closely to make sense of them. Clearly 55+ year olds must recognize a lot more brands in comparison with 18 – 24 year olds. For example, if they get quotes from 10 different companies 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 look at price. This is probably one finding that is hard to argue with; people with limited budget want cheap automobile insurance.
What Do US Auto Insurance Companies Think?
Certainly, every company would have some sort of an opinion on it. However, looking at the latest advertisements and comparing them with the ones from 30 years ago can give us some indications. Many experts point out that companies were stressing how important the trust in the insurance business and how trustable their brands are 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 their policies. Certainly, it is a lot easier to compare car insurance quotes these days thanks to online comparison websites and insurers’ own sites that allow motorists get quotes. These sites can deliver you quotes in minutes that within an hour you would have a pretty good idea if you can reduce your premium or not.
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. Their current insurers are always at an advantage since policyholders already know them. So, larger companies with more money for advertising would hit two birds with one stone (advertising). Firstly, they would put their brands in front of many unsatisfied and new policyholders and build their brands. Secondly, they would appeal to those policyholders who are pleased with their insurers but would want to look at alternatives if they believe they can save money.
What Do You Think?
When people recognize a name they don’t really think why. It may simply be through TV or other advertisements instead of great recommendation from a friend. Still it is name recognition and it sells policies. Trust is very important in insurance 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 their commercials was trust.
Considering how influential television and visual media is they can build trust and work on people who are concerned with the cost of their policies. 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 the brand in many cases. They just know it and that is enough.
So, next time you choose a car insurance company think what drives you to make that choice. Do you really get many alternative quotes, find out about the companies and coverage and compare them. If you do, you probably make a smart decision based on real information, rather than basing your choices on the self-promotional advertisements.