Well, do not feel bad, you are not alone. Car Insurance ads are mind-boggling. Most of them are based on price, then price, and lastly, price. Frankly, it is not that simple.
I am sure you have heard the phrase, “A rose is a rose is a rose is a rose”. Gertrude Stein wrote this in her 1913 poem from called Sacred Emily. When it comes to insurance the phrase should read, “A rose is not a rose is not a rose”. Not all insurance is created equal. You have also probably heard the phrase, “If it sounds too good to be true, it probably is”. This is true of auto insurance.
Most people want a good deal. When you hear the TV shout, “You could save up to 40% on your car insurance”, it gets your attention. Most people do not hear the word “could”.
We usually hear what we want to hear. We do not like paying for insurance but we have to have it by law. We have to have it to protect ourselves. So why not pay the lowest possible premium?
What is interesting is that experienced independent insurance agents “can also save you up to 40% on car insurance”. They can evaluate and guide you into building a policy that best protects you while still saving you money. Everyone’s protection needs are not the same. So purchasing a cookie cutter policy is probably not going to provide the protection you need. The worst time to find this out is after a claim.
Let’s look at an example. John Q. Driver needs auto insurance. He drives a company car so he only needs insurance on his personally owned car. So he contacts BuyCheapInsurance.com and gets a quote. Being the smart shopper John is, he gets other quotes to compare. Therefore, he contacts his agent and directs him to quote with the same benefits. BuyCheapInsurance’s premium is $85 per month. The independent agent’s quote is $100 per month. Sounds like BuyCheapInsurance.com did just what they said they would do and saved him 15%, right?
A month later, John has an accident in his company vehicle. The company insures that vehicle, so no problem right? Wrong. You see, the insurance that his employer provides on the company car only protects the owner of the vehicle, not John. For example, the party that John injures hires an attorney and sues his company and John. After all, John was driving right? His company’s insurance repairs the other party’s car, repairs the company car, and pays damages to the injured party. It does not protect John personally; however, the plaintiff’s law firm wants more money for their client. Who is left to sue? That’s right, John. John bought insurance on his personal car. However, John needed an endorsement called “extended non-owned” on his personal auto insurance policy. This endorsement covers John personally for the non-owned company car he was driving.
How was John to know he needed this endorsement? That is where an experienced independent agent may have helped. If he had called the agent and taken advantage of their expertise, he would have been advised he needed that endorsement which probably would have cost him an additional $2 per month. Does John feel like he got a good deal with BuyCheapInsurance.com now?
In addition, if John would have spent a little time speaking with the professional agent and allowed the professional independent agent to evaluate all his personal insurance needs, his auto premium would have likely been less than the $85 per month he received from BuyCheapInsurance.com. By providing an insurance package for his home and auto, the agent could have applied all the discounts John was unaware of, and received a lower premium on both his home and auto.
The moral of the story is what John already knew. “A rose is not a rose is not a rose”, and “if it sounds too good to be true, it probably is”. One more rule of thumb to consider when looking for personal insurance, “The more questions an agent asks, the better”. Why? They are looking for ways to earn you discounts while looking for potential gaps in coverage you do not even know exist. So take advantage of an experienced agent’s knowledge and expertise. It will likely save you premium dollars with no gaps in coverage.