Post Date December 2, 2009 -One of the most recognizable tag lines in car insurance advertising today is: “You could save 15% or more by switching to Geico.” Wow! Think about that! Could it be true? Is Geico Insurance 15% cheaper than every America auto insurance company? Think about this; if this were true, Geico would be only car insurance company in the United States. The reality is, if you shop online, watch TV, listen to the radio or read the newspaper, every car insurance company makes it sound like they are the cheapest. So Mike, how can that be? Well, it can’t. If there was truly one car insurance company which had the best rates on car insurance, we would not have thousands of car insurance carriers all competing for the same auto insurance dollar.
Can You Really Save On Car Insurance?
The truth about these “our car insurance is the cheapest” claims is very simple. Every driver, car and situation is different. Every car insurance company needs to raise and lower it rates to stay in business. While everyone is running around shopping for the best rate on car insurance in NJ, OH, PA and so on other states; the carriers are keeping you guessing by raising and lowering their rates and calling the Programs they offer by different names.
Trying to compare one insurance company to another is like shopping for a mattress. Yes, that’s what I said: Car insurance policies are like mattresses. Just try to find a common name of a mattress at two different bedding stores – it will never happen. Say you go to “Mattress Galaxy” and find a great Mattress called “Spine Bracer.” If you want to compare the price at “Bedding World” – they may have the identical mattress; but it’s named “Straighter Spine.” That makes it tough for you to really compare products. The reason they do this is because they don’t want you to be ableto tell the difference. So if I’m going to have the same experience when shopping for auto insurance, what is one to do? What option do you really have instead of shopping between different car insurance carriers who try to obscure the difference between the policies they offer? If you go to State Farm; Allstate or Nationwide - a ‘captive agent’ represents only one car insurance carrier. If you call Geico, they’re only going to give you one rate. A Geico rate. The same is for State Farm, Allstate, Nationwide and 21st Century.
The one thing all the captive agent companies hope you don’t do is call a national broker like InsureDirect.com. We’re independent. This means that when you call our Toll-Free number, our friendly representatives give you the ability to receive quotes from over 30 different major carriers including Progressive and carriers owned by Allstate and Nationwide.
But wait a minute Mike! I’ve been told buying from an agent costs more money because an agent makes a commission. I’ve been hearing that for 18 years. If I hear another captive agent lie one more time – I’m going to scream. The next time you hear that tale, keep in mind who it was that told you will pay more for your car insurance by going through an agent or broker. The big carriers who have to add in the cost of their astronomical advertising budgets, or the single product carriers who have to look out for their ‘captive agents,’ right? Thought so. Don’t be fooled by the common misconception that if you buy direct and cut out the agent; you’re going to pay less and save money. Nothing could be further from the truth. In fact, the exact opposite is usually the case. Independent Agents and Brokers make it possible for independent car insurance companies to sell insurance who don’t necessarily see the wisdom of spending 100′s of millions of dollars on TV, Radio advertising or captive agents who must be paid regardless of what they sell.
Lets take Geico for example. I don’t know if you are aware of the cost of advertising these days, but it’s astronomical. But here’s where it gets interesting… How many millions of dollars do you think it costs Gieco to make sure that there’s always a Geico TV or radio commercial or a picture of their lovable lizard in just about telephone book in the nation. Not to mention paying for internet ads running 24 hours a day 365 days a year?
The answer? Actually, it costs them nothing!
That’s right, all that advertising doesn’t cost Geico a dime. Those millions of dollars being spent daily are paid by every single auto insurance policy holder currently insured through Geico. So think about this if you are with Gieco. The next time you see a Gieco commercial, ask yourself if that’s the one you paid for? Now; if you take the advice I offered above and combine that with what you now know about who really pays for the high price of car insurance advertising, isn’t it worth at least one more call to us at 1-800-807-0762 , to see just what you might save on your auto insurance.
Michael E. Dortch
President & Managing Agent
Corporate Home Office
618 South Broad Street
Lansdale, Pennsylvania 19446
(800) 807-0762 ext. 602