Auto insurance is a fact of life for every licensed driver in this country. At a minimum, drivers have to have liability insurance or risk stiff fines and penalties including license suspension. There is a wide range of prices people can pay for their coverage and a wide range of quality in the companies that provide the coverage. When making car insurance comparisons it is useful to understand what the differences are that cause such a wide price and service variance.
The business model of the insurance company has a lot to do with the rates they provide. If a company does business online directly with the consumers, they are trying to be the price and convenience leader for a certain demographic. By focusing on the part of the population that is computer savvy and used to doing personal financial transaction online, these companies avoid a lot of overhead costs. By doing so, they are able to offer a very competitive rate.
The other business model is the field agent or broker network that provides the policies on a local level. Their way of remaining competitive with the price leaders is to provide superior personalized face to face service. A significant amount of people prefer to be able to sit down with their agent and deal with them in person.
Also, the local agents are usually able to provide competitive rates by bundling different types of insurance into package deals that are deeply discounted. This is good for people who have homes, autos, boats, businesses and more that they can offer the agent to write. Read the rest of this entry »