Competition in the USA Auto Insurance Industry

There are hundreds of vehicle insurance companies in the United States of America. Quite a few of them operates in most states and otherwise there are enough companies licensed in every state. However over seventy percent of all policies are sold by top ten companies. This may suggest that there is over concentration of business among a few select providers.

Another way of looking at it is that there are at least ten great companies to get car insurance quotes from. These companies are not connected with each other and each of them is strong, reputable and well-known enough to make top ten. Any one of them would be good enough insurer. This does not mean that many other large, medium and smaller companies are not good enough.

How Different Automobile Insurance Quotes Can Be?

Even you stick with the top ten for the sake of easy comparison in terms of quality, reliability and security the rates applied to you by each company can be widely different. For example, a recent report suggest that basic liabilities coverage costs can be over thousand dollar different between two top companies in some zip codes.

Each company has a different culture, underwriting background and criteria and they consider each factor’s importance differently. While you are getting large discounts for being a good driver from one company the same one may ignore the fact that you have excellent credit score. So, you may need to find a company that will offer you the maximum overall savings for your good driving and credit history. Don’t be afraid of exploring your options at all.

How Come Car Insurance Rates Be Different When They Have to Be Approved?

State insurance commissioners do check and approve vehicle insurance rates set by each company. However, they do not interfere with their level but more with their fairness and equality across policyholders. Insurance commissioners are not underwriters to determine how much a company can charge for insuring cars.

There is a considerable misunderstanding on this area. Many motorists are led to believe that the rates would not be different regardless of which company they go to. This is to suggest that shopping for lower premiums is pointless and makes the lives of agents who are working only for one company easier.

Unfortunately this point is taken as if it was fact by many policyholders. Many of them do not bother to look for alternative quotes and may be losing thousands of dollars over the years. You have to make the most of competition as a consumer and purchasing automobile insurance policies are not different.

What Is the Best Way of Checking Your Options in the Market?

First thing to do is to look at your requirements and priorities. For example, you may only want to be insured by a household brand or a large company. Even then you have plenty options to choose from. Any motorist can easily count a few auto insurer names. Then, think about what coverage you would want your policy to include.

The next step is to get several quotes without compromising from your needs and wants. Since you have already pre-qualified the companies you are getting quotes and determine the acceptable level of coverage it should not be difficult to choose one of the quotes by considering their price.

Leave a Reply