Comparing Auto Insurance Policies

Periodically, I like to call competing insurance companies and have them quote my personal insurance. This way, I can know if it really is possible to save 15% on my car insurance (I never do) and to see the quality of service and advice I receive.

Last week I called into one of these companies to obtain a copy of the policy I would be buying if I signed up with them. My contact said they wouldn’t send me one, because, “all car insurance policies are alike.” No matter how much I tried to persuade him that polices are not all alike, and that I would like to see how his compared, he wouldn’t send me one to evaluate. No telling what kind of coverage I would have received had I signed up.

The experience motivated me to compare actual policies from five major companies. I was surprised at the differences.

Here are some examples:

• While all companies define the insured to be the person named on the policy and their spouse, there are exclusions. If a couple had a disagreement and one moved into an apartment, taking one of the family cars with them, coverage on that car would cease as soon as they signed the apartment lease. Two companies extended coverage for 90 days to a spouse that moved out due to separation or some other factor.
• All five companies defined an automobile differently. Company P limited it to vehicles with a gross vehicle weight of 12,000 pounds or less. If you need to rent a U-Haul to move, good luck. Company S said it must have four wheels, so if anyone insured by them borrows a friend’s motorcycle, they wouldn’t have coverage. Lastly, company A had a very broad definition that included truck tractors and farm implements.
• Company P specifically excludes coverage for any retail or wholesale delivery. I hope your local Mary Kay representative isn’t insured by them, or they don’t start contracting to GrubHub.
  All policies exclude payment for damages intentionally caused by an insured. That is just common sense. However, Company A goes further, excluding any damage “arising” from an intentional act. If you’re parking your car intentionally and hit one next to you, doesn’t that damage arise from an intentional act?
• All companies provide automatic coverage if you purchase another vehicle providing you notify them about the acquisition within 14 days. Companies A, T, and P allow 30 days. However, here is the problem. Company H doesn’t extend this automatic coverage to trucks with a Gross Vehicle Weight of 10,000 lbs. or more. Good luck if you are insured by them and buy a Ford F250 or a Chevrolet Silverado 2500 on a Saturday when you can’t reach them. They both have a gross vehicle weight of 10,000 lbs., and wouldn’t be covered.

These are all major insurance companies, and we have sold for them all, and recommend them.

Since there are many other differences, here is what you should take away from this:

• Read your policy. It really isn’t that hard to understand and you might discover something that could cause you a problem.
• Call us with any questions you might have about coverage in a particular situation.
• Be careful of companies that promise to save you a lot of money. They are often marketed by people like the one who told me all policies were the same. If they can save you a lot of money, it might be at the expense of your coverage.
• Your best bet is to buy your policy from an independent agent who can recommend a policy that best suits your needs, so you aren’t stuck with one that doesn’t.