With Penny Gusner, Insurance Expert at Insure.com
If you drive a car, you need auto insurance, and with so many ads out there saying “come with us”, you want to know that you’re getting the best deal.
Go online to get on the right track.
Insure.com ranked the best auto insurance companies based on an evaluation by surveyed policyholders. Five key factors made up the survey:
- Customer service, which encompasses any questions raised after becoming a policyholder.
- Claims service, all the way from the incident to the resolution.
- Value for price
- Customer recommendation
- Ratings from A.M. Best, a global insurance credit ratings service
Based on this survey by insure.com, you’ll get the best auto insurance prices at—in descending order—USAA, ACSA (AAA of Southern California), CSAA (AAA of Northern California), Travelers, Mercury, and State Farm at number six. Surprisingly, some of the most well-known and more highly advertised, such as Geico, Allstate, and Farmers, are far down the list.
Low premiums can be too expensive.
Price is understandably one of the most critical factors when choosing an insurance company, but Penny cautions against not carefully evaluating other features. For instance, when you have to make a claim and you get the run-around—having to take your car for multiple quotes for repair, for instance—or the claims department is difficult to reach or to do business with, having the lowest premium loses its luster. A good hard look at each of the five issues is most important.
Once you’ve narrowed your preferences down to several companies, you can go online at insurance.com, fill out a short form with your particular information, and quickly get quotes from those companies. But, says Penny, since “insurance policies are so personalized, like they can’t guess about your real driving record and the crime in your area, all the things that when you put in your own information,” you won’t come away with the exact premium. You will, however, be able to compare costs before going forward with speaking to an agent.
Take your questions to the dinner table.
And, once again, as with many decisions we make in life, it always makes sense to seek out the recommendations from friends and family. Combining that method with the available online tools should make the process easier, faster, and more price agreeable.
Disclosure: The opinions expressed are those of the interviewee and not necessarily United Capital. Interviewee is not a representative of United Capital. Investing involves risk and investors should carefully consider their own investment objectives and never rely on any single chart, graph or marketing piece to make decisions. Content provided is intended for informational purposes only, is not a recommendation to buy or sell any securities, and should not be considered tax, legal, investment advice. Please contact your tax, legal, financial professional with questions about your specific needs and circumstances. The information contained herein was obtained from sources believed to be reliable, however their accuracy and completeness cannot be guaranteed. All data are driven from publicly available information and has not been independently verified by United Capital.
Steve Pomeranz: Penny Gusner is an expert on car insurance and an analyst for websites such as insure.com, carinsurance.com, and insurance.com. I’ve asked her here to join me to discuss insure.com’s ranking of the best auto insurance companies. These are the largest auto insurers evaluated by surveyed policyholders. Hey, Penny, welcome to the show.
Penny Gusner: Good morning.
Steve Pomeranz: Good morning. What were the key factors that made up the rankings? Let’s discuss each one one-by-one.
Penny Gusner: Okay. Sure. There are five main ones for auto insurance, and the first one is customer service, which as you know, if people get bad service they’re going to not want to come back to that company again.
Steve Pomeranz: Now is that service via the phone, you mean, when you call to make a claim? What’s defined in customer service?
Penny Gusner: It’s any dealings once they are a policyholder, since these were policyholders that we surveyed, so once they become a policyholder, any dealings they have with the company. That’s calling for questions. The claims one is more under the claims handling, which is also ranked, so this is more of just when you’re talking, asking questions, any other action you might have with your agent.
Steve Pomeranz: Okay. All right. What’s another key factor?
Penny Gusner: Claims handling, like we were talking about, which can be very subjective and even a wildcard, because not everyone has claims, so we narrowed it down then to the policyholders that did have claims during the past couple of years and how it was handled by the company. Yeah, it can be subjective because one person might think a couple of days to have their car looked at after an accident is fine and another person might think no, that’s horrible. They should be here in an hour.
Steve Pomeranz: Yeah. Right. Right. Also I’ve noticed with some companies, they’ll send you to different places locally and those places are contracted with the insurance company, so there’s another level of service and response based upon how this company that you’re going to, whether it’s a body shop or something like that, treats you as well.
Penny Gusner: Correct. It’s the whole encompassing of the time of your accident and you make your claim all the way till … When it’s fixed or, you know, if it’s totaled and you’re getting your monetary compensation.
Steve Pomeranz: All right. So we’ve discussed two of the five. What’s another ranking factor?
Penny Gusner: Price, which is probably the biggest for everyone, because we weighed each section of this and it came out that most people … That price was most important when looking for an auto insurance company.
Steve Pomeranz: I think most of us figure that insurance companies are kind of all the same. I’m not saying it’s a correct assessment, but in this area, I’m a lay person, so I think I’m basically … It’s like a commodity product. I’m just going to look at price and hope for the best and expect the best I guess that, when I do eventually have a claim, I won’t be disappointed.
Penny Gusner: I mean price is the first in front of everybody’s mind, but then you also want to go a little bit deeper, because it does matter if you need to talk to somebody, if there’s someone available, or if they have short hours. If they’re going to be there 24/7 for claims because you’re paying in your money and you want to make sure that if you do need to get some money back out of your insurer by a claim that they’re going to treat you right.
Steve Pomeranz: Well, I guess that-
Penny Gusner: But price does matter.
Steve Pomeranz: No, I hear what you’re saying. Price matters, but it’s hydrocodone online what you get for the price that matters, and I guess it’s rankings like this which help us to compare one company to another to help us make those kinds of decisions?
Penny Gusner: Exactly.
Steve Pomeranz: Right. We found this, by the way, on the website insure.com. All right, so we talked about customer service, claims processing, price. What are some other factors?
Penny Gusner: We ask them if they plan to renew their current policy. That we didn’t rate as heavy because people are lazy, unfortunately, and they don’t always look around. My advice is always do it every six months, at least once a year when you’re renewing your policy, when the notice comes in. Go look around and see if somebody has a better price and also see … Yes, look into if they have good customer service, if they have good claims policies, and look at their financial rating too. You don’t want to jump ship to a really cheap company that won’t have the financial security to pay if you need a claim.
Steve Pomeranz: Yeah, but what you’re saying sounds easier said than done. I mean if I go up on the web how am I going to find out about customer service and claims processing quality? I mean I could probably find out about price, but even price is tricky because you have to talk to a representative, you have to give them all your information. They have run it through their computers before they can actually price it out, because maybe you had an accident four years ago or something of that nature. Is there an easier way to go and check this out every six months?
Penny Gusner: You can come look at our survey results, one.
Steve Pomeranz: Okay, that’s one, right.
Penny Gusner: That helps you, and also you can compare it online pretty easily. At insurance.com you can get quotes right away and you go through a short form. It gives you an idea, using a few of your personal details, because there are some sites out there that will give you quick estimates, but really insurance policies are so personalized, like they can’t guess about your real driving record and the crime in your area, all the things that when you put in your own information they’re able to actually spit out and give the actual premium that you would pay. The last thing that we surveyed, which was would people recommend the insurer, so besides going and looking online always talk to friends and family and see what they have to say.
Steve Pomeranz: Okay. That’s smart. We’re talking about car insurance, how to figure out what some of the qualities are when choosing car insurance. Obviously price is important, but there are other factors as well. My guest is Penny Gusner and she is with insure.com and carinsurance.com and insurance.com. Hey, Penny, are these all the same, it’s just that they bought these domain names to capture anybody who is looking in this area?
Penny Gusner: They’re actually three separate sites. I just work with each one of them and they each have sort of a different audience. Yeah.
Steve Pomeranz: All right. So this survey was at insure.com. Okay, drum roll. Let’s get to the list already. Steve, get to the list. What was the number one rated car insurance company ranked by this survey?
Penny Gusner: USAA.
Steve Pomeranz: USAA? So let’s talk about the scoring a little bit. It had an overall score of 97.2 and you … We mentioned these ranking factors, but you also … You rank the factors in terms of importance. You don’t give each one of these five factors the same level of importance, is that correct?
Penny Gusner: Correct. We went and looked at what they ranked because we have to ask them the importance of each of these factors, which they thought was most important, and price came out on top.
Steve Pomeranz: Customer service, USAA was a five, claims processing a five, value for price a four and a half, plans to renew 92%, would recommend 97%. So we’re not recommending any companies here, we’re just reading down the list. The second on the list is ACSC. Never heard of that. What is that?
Penny Gusner: You probably know them by their other name, the Automobile Club of Southern California.
Steve Pomeranz: Okay. Well, we’re in Florida so we’re not too familiar with that. There’s CSAA. What is that?
Penny Gusner: That’s another insurance group. It’s Triple A of Northern California, but they changed their name a few years ago to CSAA Insurance Group, because they’re not just in northern California now. They’re in 23 states.
Steve Pomeranz: I see. Okay. So the ones that we’re talking about, these are national though, or you said 23 states? So they’re found outside of a particular state even though they may not be in all states, right?
Penny Gusner: Yes.
Steve Pomeranz: Okay. Let’s see if we see any other names here that we may be more familiar with that had a high ranking. Triple A Insurance … Well, no, that’s the CSAA. Traveler’s Insurance was number four on your list.
Penny Gusner: Yes.
Steve Pomeranz: Yeah. So tell us a little bit about Traveler’s in terms of how long … Do you know how long they’ve been in the marketplace? It sounds like such a familiar name in life insurance.
Penny Gusner: Yes. They’ve been around for quite some time. I think it’s been I think 160 years they’ve been in business, if I’m not mistaken. I think they started as a marine insurance company. Some of the companies started as something different, like GEICO used to be just government employees and then they expanded.
Steve Pomeranz: Right. Right. So we have Traveler’s as number four, Mercury Insurance is number five. State Farm is there. The Hartford, Progressive, American Family, Nationwide. GEICO is really kind of down the list, right? Let me count this. One, two, three, four, five, six, seven, eight, nine, 10 … 11th on the list, which is surprising, considering how successful the company is and how much advertising they do. Also I know there’s another online company here, eSurance I noticed, which is an Allstate company. That was pretty far down on the list as well. Unfortunately, we’ll have to wrap this up. Any final words or advice you can give to our listeners when buying car insurance?
Penny Gusner: Shop around. It’s worth it and you can see the price varies extremely from one to another, and look at the different factors besides the price.
Steve Pomeranz: And, finally, don’t be lazy.
Penny Gusner: There you go.
Steve Pomeranz: Because I tell you, I am guilty of that. I’ve had car insurance for a really long time, meant to do it, meant to do it, never did it, and finally did it, and I did save some significant dollars about three months ago. Penny Gusner, thank you so much for joining me.
Penny Gusner: Thank you.