By Theo Thimou – ClarkHoward.com
When you’re getting ready to shop for auto insurance, what considerations come into mind? For most people, it’s price first and foremost. What you pay is often the deciding factor in swaying you from one insurer to another. But as Clark has long said, there are considerations beyond what that monthly insurance premium is going to look like in your life. There’s also brand equity to be considered, among other things.
If you’re not familiar with the idea of brand equity and how it relates to auto insurance, it can be summed up with a couple of questions: Are you familiar with the insurer? Do you have an idea about whether their coverage is quality or not? Those factors are often prerequisites in a consumer’s mind before they move on to purchase consideration.
Top car insurers in new brand equity rankings
The 2016 Harris Poll EquiTrend study has just come out with new insights into the auto insurers with the most brand equity.
At the top of the list is AAA, which has been named Auto Insurance Brand of the Year by Harris Poll for 2016.
After AAA, you have State Farm, USAA, American Family Auto Insurance, Nationwide and Farmers.
The Harris Poll asked more than 97,000 of us about 3,800 brands in 500 categories. Ranking were then based on three factors: familiarity, quality and purchase consideration.
“To be recognized as the highest-ranked auto insurance brand in the nation is a great honor for AAA,” AAA president and CEO Marshall L. Doney said in a statement. “AAA Insurance provides value to members with great customer service and peace of mind at home, on the highway or when preparing for the future.”
Do the Harris Poll results jibe with Consumer Reports?
According to Consumer Reports, AAA is among the top five insurers in their recent rankings based on a 2014 survey of 64,872 Consumer Reports readers.
USAA, however, is the top pick in Consumer Reports and gets the highest score on satisfaction in terms of claims resolution, price and service — despite being listed at number three in the Harris Poll.
Meanwhile, State Farm, American Family Auto Insurance and Nationwide all only get lukewarm scores, according to Consumer Reports.
The real surprise here, however, is Nationwide. They get the lowest possible score on the Consumer Reports tally, yet the insurer somehow miraculously managed to come in fifth on the Harris Poll!
When you’re considering a new auto insurer, it’s wise to get a lay of the land by consulting multiple deep dives into brand reputation like those done by the Harris Poll, Consumer Reports and J.D. Power too.
You can usually settle on a solid choice by culling the collective wisdom of these kinds of surveys. Look for the commonalities, like one insurer being at or near the top of survey results from a variety of sources. That way you’re more likely to find a winner!
How to shop for car insurance
Looking to shop your auto insurance? Here’s how to start the process:
Begin by identifying solid companies
Clark has long talked about the merits of Amica Mutual and USAA. But those aren’t the only two companies you should look at. Consider buying a one-time subscription to Consumer Reports and checking their latest list of the best auto insurance companies to find others that should make it onto your shortlist.
Get your quotes
Once you have a list of candidates, you’ll want to start getting quotes. This typically takes around 15 minutes on the phone. Have your most recent policy in front of you in case any questions come up about the make and model of your vehicle(s).
Working with an insurance broker is another option. He or she will get multiple quotes for you and you’ll have access to all the insurers they do business with. It’s an easy one-stop shop that lets you still have the flexibility of comparison pricing.
Once you get the quotes back, it’s time to compare them. Each quote should be based on the same amount of coverage so you can do an apples-to-apples comparison. What if a poorly ranked company offers you a great quote? Clark says to avoid them! While the premium might be tempting, you want to be sure your insurer is there for you when the chips are down.
Know when to drop comprehensive and collision
The general rule is when the cost of comp and collision exceeds 10% of your old vehicle’s value, that’s the time to dump it and just have liability coverage. You can determine your vehicle’s value at Edmunds.com, KBB.com or NADA.com.
So let’s take a simple example. Say your vehicle is worth $4,000. If you’re paying anything more than $400 annually (that’s 10% of $4,000) for comp and collision, it no longer makes any financial sense. One notable exception to this rule: If there’s no way you could financially cover the loss of your vehicle, forget the math and keep paying for comp and collision.
Be prepared to take a higher deductible
You should always opt for a $1,000 deductible for the best savings on your policy. At that level, you’ll pay a lower premium and won’t be tempted to file any small piddling claims.
By Theo Thimou – ClarkHoward.com
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