The True Cost Associated With ‘Low Cost Auto Insurance’
It is remarkable how much text has been authored about the auto insurance business on the web. The key method in use by the vast of the literature is in the way of selling the insurance service with no regard to other criteria, not in the right context of insurance product or ‘a product to protect your wealth and assets.’ That is why when searching for the keyword ‘auto insurance’ a large amount of websites show up with the ‘selling’ phrases like cheap auto insurance, affordable auto insurance, or low cost auto insurance.
In the first quarter of 2011 Google AdWords reported that there were 8,100; 9,900; 74,000 monthly searches for the above key phrases, respectively. Alternatively, there were only 110 monthly searches for the expression ‘reliable auto insurance’, 170 monthly searches for ‘quality auto insurance’, and 8,100 monthly searches for ‘top auto insurance companies.’ It is rather easy to come to a conclusion that most of the auto insurance searches on line are about price, not quality.
A basic principle in marketing is to understand what people ‘want’ and design and package your product or service to meet what the folks want. Looking at those numbers we can tell that most people want cheap auto insurance. As a marketer, if you design any campaign without considering that analysis you may eventually flunk the marketing tests, close your website and go do something else.
So what’s the difference between auto insurance polices? From a ‘financial planning viewpoint’ car insurance comparison should never be based on price only, and perhaps most people agree that cheap insurance is not necessarily the best car insurance. But what most people do not know is that an insurance policy with the best rated company may also be one of the most problematic contract. An auto insurance policy should be compared in reference with three factors:
1. Policy Premium: Surely, the lower the better, but assuming other things are alike.
2. Rating of Insurance Company: Most non standard automobile insurers are less stiff than their preferred or standard counterparts when it comes to past of the household drivers and the credit scores of the insured applicants. However, non standard carriers are harder than others when it comes to customer service and paying claims. Most of customer protests come from the performance of the non standard insurance carriers. Where standard and preferred companies do not hesitate to quickly pay for smaller claims suck as eight or ten thousand dollars claims, or even little more; all insurers from top to bottom will take their time to examine the claim details to see if they have to or do not have to pay a $100,000 on the behalf of the insured.
3. Liability Limits. This is the most neglected, most under stated, but is the most critical aspect of the automobile policy from the standpoint of the financial planning profession. Liability limits influence clients in times they need the assurance most, when they are exposed to lawsuits. Liability limits indicate how much protection the insured person has in the event he/she gets sued because of neglectful driving of one of the members of the household. A skilled financial planner will never present you a car insurance policy at low limits if he/she has enough information that you possess enough assets or capital to be sued for, in the event that you or one of your household members cause a major auto accident and your auto insurance pays the maximum on the policy limits, which happens to be insufficient.
There are quite a lot of insurance policies sold with top rated insurers at the lowest liability limits permitted by the state. In the Illinois the minimum liability limits are 20/40/15, which interprets as in the event you or a household member become responsible for an automobile accident and you get sued by others, your insurance company will pay to other people on your behalf no more than $20,000 for bodily injury for one person, no more than $40,000 for bodily injury for all other people in the accident, and a maximum amount of $15,000 for any and all property damages caused by that accident. If you are a property/ business owner or a retiree with a sizable 401K plan and you cause a major accident resulting in a valid lawsuit of $300,000 against you and your insurer decides to pay the max on the policy which is$20,000 , the difference of $280,000 will be your duty to pay, and must come from the sale proceeds of your property, or your retirement saving accounts!
Ed Sneineh, an insurance professional since 1989, former college educator of insurance, and founder of Insurance Navy, a leader in providing Illinois auto insurance quotes. Visit our website http://www.insurancenavy.com and get your instant car, SR22 insurance Illinois in 5 minutes or less.
