The Auto Insurance Merry-Go-Round

Post Date 3.10.12 – I recently found and purchased on E-Bay a magazine called “Motor Service”.  Although the magazine was not dated, it clearly was printed in the middle 1960’s.  The magazine was by subscription and was a publication which catered to the automobile repair and auto body industry. What caught my eye was the topic of that weeks issue. The Auto Insurance Merry-Go-Round.  The issue clearly focused on Car Insurance Problems and the misunderstanding most people have about their insurance coverage.  The issue has a series of articles outlining the misunderstandings auto insurance customers run into  on a daily basis or during the occasion they are involved in an auto insurance accidents. The articles posed a number of  vital and informative questions like:

“Will overpriced or cheap car insurance rates create a new élite class of those whom can afford to drive and those whom can’t afford that privilege?

Although most automobile owners maintain insurance, most  really don’t understand their coverage.  This lack of understanding creates many problems when those drivers are involved in an automobile accident – regardless how minor. Many accuse Body Shops and Repair as the primary reason in the annual increase of car insurance rates.  As a result,  Auto Body and Repair Shop Trade Associations throughout the United States disagree with these assumptions.  They remind us Insurance companies and loss adjusters pressure  these shop operators to lower the cost of repairs so to increase the the insurance carrier’s overall profit.  This is not a bad thing.  Lower repair costs enable insurance companies to pass on lower rates to their customers – and they do!  With the enormity of insurance companies competing for your premium dollar, it’s in the carriers best interest to offer customers a lower rate.  An insurance company’s income is regulated in the same manner as any public utility. Income for an insurance company comes from only two sources. Of course the first is your premium dollar.  The second is investment income.  Insurance companies invest in the stock market and bonds just like may people do.  In most cases, they are using the premium dollars they collect and the profit from the same investments to support the stability of the insurance carrier.

Over the next few months, I am going to offer a comprehensive review of these important issues along with adding my experience and updated commentary.  This information is as true today as it was 45 years ago.  We at spend a lot of time with our customers making sure they understand their insurance coverage. This is why has a 92% annual renewal rate among it’s customers.  Regardless if it’s for their car, home or apartment, a well-informed client is very, very important.  The biggest problem we face as agents in today’s marketplace is other deceptive  insurance agents competing for our customers. Since we represent the 30 national insurance carriers, we offer the best rate in most cases. In order for a dishonest agent to save a customer money, they reduce coverage and in turn reduce the client’s insurance monthly payment. This is dishonest and we have seen the result of former customers life being disrupted over a claim with inadequate coverage! Fortunately, our customers are well-educated about their limits and coverage and don’t fall for such dirty tricks.

If you have any questions regarding this upcoming series of articles – feel free to comment or send me an email at


Michael E. Dortch
President &  Managing Agent
Corporate Home Office
618 South Broad Street
Lansdale, Pennsylvania  19446
(800) 807-0762  ext. 602