The Apples and Oranges of Auto Insurance

By Joseph Zeleny:

Sparked on by Lilly and Biz’s articles, I wanted to share my own experience in auto insurance.  First understand that I am a lot like many people in that I want my work done for me if at all possible.  That is why I like using online insurance quote companies who give you their rate and compare auto insurance rates with other insurance companies.  So I went to one website and got four quotes all together.  Something that struck my eye was the fact that I had never heard of one of the companies.

Leaving that window open I went to another online auto insurance website to do the same.  Found my rates on that website were different.  So I decided to find as many insurance companies and compare all of their rates.  I think the whole process probably took me about an hour to get done.

The rate differences were large when I thought about it on a five year basis.  See, I am a creature of habit and knew very well that if I switched from one company to another that I would be with them at least as long as I had my new car.  So I figured if I really wanted to get an idea of savings I would go ahead and look at the price difference over 60 months rather than one I could save per month.  By doing so I was able to get a clearer idea of who was going to offer me the greatest savings.

I got seven auto insurance quotes from a total of twenty plus insurance companies.  All in all I found five that were very similar and realized that at least one of the companies seemed to be on all of them and pretty much had the highest price auto insurance of anyone.  I took my five cheapest insurance quotes and found that the best five only differed by about thirty dollars over a span of five years.

I opened up the complete details of each and what I found was nothing less than eye opening.  One of the company’s full coverage was not really full coverage.  It lacked acts of God and vandalism.  I went to the next one and found that their full coverage didn’t include any kind of full repayment for my car if it was stolen or totaled.  I went down the list of different car insurance quotes and found the same thing over and over.  I found one company who was the most expensive of the five, again by about $30 over a five year period, that’s like fifty cents a month, that offered everything I needed and roadside assistance similar to AAA.

So is this some kind of deceit from automotive insurance companies to keep their rates competitive?  Yes and no is the only honest and non biased answer.  It really does come down to the definition of full coverage.  As we saw in the article “Automotive Insurance Overkill” Guru’s daughter felt that full coverage included automotive rentals that she couldn’t even get.  So I don’t really think (optimist) that it’s a matter of the insurance companies being deceitful about the prices for their definition of full coverage.  I would more like to believe that they simply carry a different belief of what the term full coverage is.

Do a little homework; decide which features are important to you.  Do you really need roadside assistance our would you save more money in the long run if you dropped it out of the features and went with someone else like AAA?  Is an additional $20 a month worth the rental reimbursement that you will only use for a couple of days should your car be damaged?  If you park your car in front of your office in the day and in a garage at night, is vandalism protection really something you want to pay extra for?  By asking yourself a few of these questions and then looking online for automotive insurance quotes, you can save yourself headache, confusion, and in this economy, most importantly, you can save yourself money.