The trend amongst huge direct selling insurance companies (GEICO, Progressive, Esurance...) is to trivialize the importance of insurance and promote premium savings alone.   You've seen hundreds of TV commercials from these companies, and they show up on all websites and social media sites.  But when have you ever heard or seen them promote the great advice and outstanding claim service they provide?  In our experience, the answer would be never.  That's because that's not what they do. The goal of spending hundreds of  millions of dollars per year on advertising (each company!) is to eventually brainwash consumers into believing that all insurance coverage is the same, all companies settle claims the same, coverage advice is not necessary, and therefore the only thing that matters is how cheap your insurance is.  And the faster you can do it with the least amount of thought and effort, the better. 

We conducted an experiment in order to find out how the largest of these direct selling companies compares to our policies.   First, we obtained a quote for an auto insurance policy on their website.  We know insurance, so we knew what coverages to choose and how to arrange each one, but the average consumer would probably struggle with selecting the appropriate coverage.  We observed that some coverage limits that we would normally recommend to our clients were not available. 

After obtaining our online quote (which wasn't lower than our current policy), we called the toll free number and posed as a potential customer.  We asked two relatively simple questions about auto insurance coverage to see how knowledgeable the representive was.  After placing us on hold for about 20 seconds the representative came back and read the brief coverage description that is shown on their website.  It was fairly clear to us that this representive had very little knowledge about auto insurance. 

Next, we obtained a copy of their auto insurance policy and compared it to a typical policy that our insurance companies write.  The direct selling insurance company's policy was like, well... Swiss cheese.   We found many policy terms that limited or excluded coverage.  If a consumer buys one of these policies and has a claim that is limited or excluded they will be on their own to pay for the injuries or damages themselves. 

The insurance companies we represent aren't flashy... they don't spend a fortune on advertising, they don't have any cute characters, and you don't hear their names in your sleep... but they write solid insurance policies and back them up with fast, fair claim service.  As an agency affiliated with these quality companies, we're proud to serve our clients with good advice and ongoing service.  

Don't fall for the quicker and cheaper is better pitch.  15 minutes could cost you a fortune!
Posted 10:03 AM

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Anthony said...
Great information. Ive always wondered why people trust companies that build their reputation off of advertising rather than their product or service.
FRIDAY, OCTOBER 17 2014 12:03 PM

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