August 4th, 2009
The Great Car Insurance Switcheroo – How do the savings stack up?
Picking the right car insurance company is all about savings—how much time, money, and customer service benefits you can get from switching auto insurance providers helps you to figure out which company is a cut above the rest.
The highly commoditized world of auto insurance demands that companies use anything, from clever marketing of talking mascots to discounts for good driving and even good grades, just to gain a competitive edge. But the three big C’s – convenience to quote or buy, cost, and customer service—stand out as the factors consumers consider when determining which company is the best safety bumper when they are out on the open road.
It is difficult to pick a best out of the bunch because car insurance companies tend to sound the same when they boast the basic commercial gimmick of, “Save $325 dollars when you switch to a different auto insurer.” So, we challenged their claims by taking two very different profiles—a new car-owning college student, and a 30-something couple with two kids and two vehicles—and used consistent coverage across the auto insurers to see how they truly stack up in savings.
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Cost
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Customer Service
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Company’s Savings Claim*
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College Student
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Savings to switch
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Young Family
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Savings to switch
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Claims Repairs?
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JD Powers (out of 5 stars)**
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Save $396
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$1,252
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Current Customer
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$1,183.50
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$85.40 Savings
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Up-to-date info on your claim via phone, with your Allstate Claims Team, or online
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••••
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Save $451
6min to quote |
$1,511.00
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$259.00 Additional cost
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$1,268.90
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Current customer
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E-Star facilities for Direct Repair Program so you can track your vehicle repairs online
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•••
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Save $300
7 min to quote |
$1,090.00
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$162.00 Savings
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$1,134.00
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$134.90 Savings
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Personal Care F.I.R.S.T program with Direct Repair Shops
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••
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Save $550
6 min to quote |
$1,026.90
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$225.10 Savings
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$1,470.80
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$201.90 Additional Cost
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Immediate Response Vehicles bringing claims professionals to where you are
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•••
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“Save 15% on your car insurance in
15 minutes” |
$1,094.20
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$157.80 Savings
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$803.20
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$465.70
Savings |
Auto Repair Xpress locations for estimates and repairs
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•••••
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Save $426
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$1,500.19
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$248.19
Additional cost |
$1,334.08
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$65.18
Additional cost |
Select Service Program for repair warranty, repairer locations, etc.
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••••
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* of Savings per year (reported average annual savings of customers)
**Provided by J.D Power and Associates, Overall Purchase Experience score for new insurance buyers based on how customers rate their new auto insurance provider overall.
Round-up
There was very little difference across convenience, cost, and customer service in comparing the six auto insurers. In terms of convenience, all the company websites’ online quotes had quick, easy accessibility and a fast turn-around; each company took 5 to 10 minutes and a few of them also offered additional phone or insurance agent support. For cost, switching swung between saving as much as $465 or costing the consumer an additional $259. For customer service, GEICO has the highest J.D Powers rating, but this factor varied according to the unique claims service and customer care features each company offers.
Since competition between companies has standardized much of the coverage and minimized the range of cost, some companies get creative in how they set themselves apart from the others. For example, Esurance offers E-star Direct Repair Program, which speeds up the hassle of car accidents by recommending a body shop, providing online repair monitoring with pictures of your car’s repairs, and guarantees on all repairs for as long as you own your car. Allstate’s “Accident Forgiveness” policy, if you qualify, promises that your auto insurance premiums will not increase after a car accident, even if it is your fault. 21st Century is best known for its lower rates than other insurers and simple, user-friendly website, with a self-adjusting timer to pinpoint the current average time to complete a quote.
However, auto insurance cost is not just a function of your car type, coverage, and service level; it is also about how risky you may be as a driver. The underwriting process of insurance providers looks at your credit report and credit score to gauge the risk of insuring you and your vehicle. Typically, the lower the credit score, the higher perceived risk of a claim, and not surprisingly, the higher your car insurance may cost.
When it comes to choosing which auto insurance provider will make you feel at ease on the road while still being easy on your wallet, shop competitively and look at what each provider offers and what savings you can get by switching. Ultimately, no one insurance provider is comparatively better for all consumers—it all depends on what you want in a happily-ever-after for you, your family, and your car.
Two of the biggest factors in insurance are the year/make/model of the vehicle and the location (zip code). What did you use for those factors?
For the college student profile, the vehicle was a 2010 Toyota Corolla Sport, zip code 94704.
For the young family profile, the two vehicles were a 2004 Jeep Grand Cherokee Laredo 4×4 and a 2008 Mercedes E350, zip code 94618.
Consistent information for both profiles’ vehicles, personal information, and options for insurance coverage was used to get the most similar quotes between the insurers.
Thanks for your question!