• Advantages and Disadvantages of No-name Auto Insurance Companies

    Drivers who want the best deals and the best experience with auto insurance companies need to shop around. Financial experts report that in the auto insurance world, different consumers are likely to find their best auto insurance bargains at different companies, so that in reality, there may be no “best auto insurance company” overall. In fact, while some drivers report getting better coverage at rates with large national car insurance companies, others say they get better deals from smaller independent shops. Here are some of the pros and cons of going with no-name auto insurance companies.

    Pros

    • Customer Service – In the world of insurance, customer service is very important. That’s one of the best selling points for smaller local insurance offices. Customers can walk into the office, or call and ask for their insurer rep by name. With larger companies, none of this is possible. Good customer service is a huge reason why households and drivers would sign up with a local shop over a large national chain, when those big companies have so much power in terms of advertising dollars.
    • Accountability – Because customers of smaller insurance shops know who they’re talking to, there’s more accountability, which is also critical for insurance agreements. An insurance policy rests on that accountability, because the customers paying toward the day when a claim needs to be made. Having a concrete agreement with a local shop is one of the best ways to get peace of mind regarding your auto insurance, because it’s harder for the individual rep or company owner/operator to waffle on claims.

    Cons

    • Financial Liquidity – Smaller independent auto insurance shops are generally dealing with a smaller pool of money. They don’t have as much to throw around. That means that in some situations where larger national companies would be able to pay claims with an endless bankroll, a smaller shop could have a problem. These kinds of problems with claim payouts seem to be relatively rare, but it’s something to think about when talking to your insurer about coverage and how claims would be paid.
    • Insurance Ratings – When you’re dealing with a smaller insurance agency, it may be harder to find their insurance ratings online or in the periodicals of insurance associations. Auto insurance company ratings show how reliable that particular company is. Drivers can get auto insurance company rating information from a number of sources. They can also get financial ratings from Standard & Poor’s. A financial rating shows a number of points about a company that reflect how likely they are to pay on claims. This kind of information can be valuable, and it is often easier to find insurance ratings on the large companies than the smaller ones.

    The above reflects some of the advantages and disadvantages of dealing with “nameless coverage” from an independent insurance shop.