Insurance Premiums What Determines the Price
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Consumer Federation of America (CFA) also found that higher prices of car coverage do not translate into better service for consumers.
“This research shows that consumers are supposed to shop very carefully for insurance,” said J. Robert. “The good news is there are insurance firms that pay negligible or no commissions, offer low on line vehicles coverage costs and have very good customer service.”
“However, this research also found plenty of insurance firms in which high commissions convert into lofty rates, with no gain in service quality,” J. Robert claimed. “Good vehicles coverage rates and good service may be found if customers take the time in order to compare insurance companies.”
CFA (Consumer Federation of America) researched commission information from the 20 most important writers of coverage for both private passenger vehicle assurance on-line and homeowners insurance. This sum commission information combined ordinary commissions and contingent commissions (paid after policies are sold and based on special sales or on profitability goals).
The report compared sum commissions with price, insurer profitability and also service quality as measured by grievance data and customer contentment indices. Consumer Federation of America revealed that:
1. Insurers having lower commissions tend to have lower rates. This isn`t always the situation, so customers have to shop carefully.
2. There is no evidence that paying higher fees to an insurance agent or broker produces either better service or higher consumer satisfaction. In fact, there seems to be no connection between the quantity of commission disbursed and the value of service provided.
3. Several insurance companies propose particularly high-quality deals. Others have charges that are almost always high.
In less competitive businesses, some insurance companies may be enticed to interest market share by proposing higher commissions to agents or brokers together with higher costs and, sometimes, higher gains for the insurer. Credit insurance is one area where this type of `reverse competition` is particularly prevalent.
Tips for Customers
We give 6 advices for consumers when shopping for online cars assurance:
1. Shop around! This research revealed that premium charges usually rise with commissions, although this isn`t always correct. Customers must be sure to get quotes from a number of the lowest monthly payment insurance corporations, including the direct writers of coverage that normally do not pay commissions.
2. Consumers don`t need to pay more to obtain excellent service. Some of the firms which have the best service records have low prices and low or no commissions. It is worthwhile to shop between the insurance companies with the lowest costs and the highest customer satisfaction/lowest complaint ratios.
3. To receive information on autos assurance rates, review state cost information guides. Most of the states have cost information guides. Typically, customers are able to download these guides from the country`s insurance department web-site.
4. To receive grievance information on insurance companies, check in the National Association of Insurance Commissioners` web-site, www.naic.org.
5. Be careful with going to only 1 insurance agent or broker for autos assurance on-line, even if that producer represents a number of insurance firms. Customers must know that several agents representing more than one company might put the customer in a higher priced insurer which has larger commissions even when the consumer qualifies for a lower price. States do not oblige insurance agents or brokers to put the client with the most excellent policy for him. More Info
6. Ask insurance agents and brokers the right questions:
Do you act for me or do you represent the insurance corporation you are proposing me to use?
What commission are you earning as a percentage of the cost of the on line vehicles coverage program you are proposing me to purchase?
Am I receiving the lowest cost among all the online cars assurance firms which you represent for which I qualify?
What other autos assurance on-line companies do I qualify for that you act for? What are the costs I would pay at the other firms and what fee would you get in every one of them?
Do you have a contingency commission arrangement with the insurer you are suggesting? Please fully elucidate it to me.
In case I have a claim, do you represent me or the insurer in the claim process? Is your reimbursement in some way related to claims filed by me and other clients of yours?
We hope that you`ve considered this progressive auto insurance policy text exciting plus catchy at least. Its objective is to make fun as well as educate.