Customers aren’t happy with their car insurance and are switching carriers, but the cheapest option isn’t always the best

Switching to the cheapest car insurance isn’t always the best option.

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Despite over $10 billion in rebates and discounts from car insurance providers, consumers are still dissatified.
Consumers are switching providers for the cheapest premium they can find.
However, cheap premiums don’t guarantee proper coverage or good claims service.

See Insider’s picks for the best car insurance companies.

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The auto insurance industry has offered over $10 billion in rebates and discounts due to the pandemic, but according to a J.D. Power Insurance Intelligence study, as the pandemic worsened, so did customer satisfaction. Most customers said they never even received information about the COVID-19 related rebates or discounts.

A more recent study by J.D. Power shows dissatisfaction has grown, and customers are switching insurers. Usually, the cheapest premium wins out. However, customers are forgetting the old adage of “buyer beware,” because the cheapest price doesn’t mean you’ll get good claims service or proper coverage.

The great debate: price versus claims service

You get what you pay for. Usually, going for a higher price with an established auto insurance brand means better claims and customer service. If you get a cheap price, you may be giving up customer service, or, worse, coverage.

According to Tom Super, head of property and casualty for J.D. Power, the average consumer wants things to be fast, cheap, and convenient. Many consumers are applying that to their insurance coverage. He noted that being cheap on car insurance doesn’t impact consumers tangibly like getting a cheap car, which you feel immediately. Super said there’s the potential to be underinsured when going for the cheapest insurance coverage.

Questions to ask before buying car insurance

Like with homeowners insurance, getting the cheapest auto insurance rate is probably not going to provide the coverage you need, especially if you have a new or newer used vehicle. If you have an old beater, maybe the cheapest liability coverage is enough.

Question consumers need to ask inlcude:

If my insurance company doesn’t cover this, can I afford to pay out-of-pocket to repair or replace? If no, then you need to make sure you get enough coverage, which probably isn’t cheap.

Do I care if my carrier is responsive during the claims process? Does prompt customer service matter? If yes, then you need to focus on insurance companies with high rankings for claims and customer satisfaction.

Car insurance companies with high claims satisfaction

Claims satisfaction refers to how customers feel about how insurance companies settle claims. Below are rankings from J.D. Power based on a 1,000-point scale.

NJM Insurance (909)
Amica Mutual (907)
Auto-Owners (890) and USAA*
The Hartford (888)
MetLife (886)
State Farm (881)
Erie Insurance (880)
Allstate (876)
Nationwide (876)
Farmers (872)
Industry Average (872)
Esurance …read more

Source:: Business Insider


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