Should I buy the cheapest auto insurance as if all carriers are the same?
Many people shop for the cheapest auto insurance carrier regardless of the carrier’s reviews and reputation. This is a mistake. Is a filet from Outback Steakhouse the same quality as a filet from Capital Grill? Of course not.
Similar to steakhouses, insurance carriers are tiered based on the quality of their product. Here are some reasons why you should insure your vehicle with a quality insurer.
A reputable insurer will act in good faith to settle your claims and not cut costs. Whether you caused the accident or were the victim of an accident, a bad insurance carrier can make your life unreasonably difficult.
Scenario: You cause an accident
If you cause an accident, your insurance company should act in good faith to settle your claim, so you are not exposed to a lawsuit and potentially an excess judgment.
Lower tier insurance companies:
- Delay on returning your calls/emails. Delay frustrates the process.
- Require you to repair your vehicle at a budget body shop.
- Decline to cover the full damage to your vehicle and/or use third-party parts (as opposed to OEM parts).
- Skimp out on rental car coverage.
- Look for ways to void your coverage (“deny your claim”) by finding inconsistencies with your application which they claim is a “material misrepresentation” (i.e. incorrect address, number of drivers, number of claims).
- Take your sworn statement (deposition) in an attempt to void your coverage and/or reduce your payout.
- In the event of a claim against you, a lower-tier insurance company will make a low-ball offer to settle the victim’s claim. This can expose you to a lawsuit.
- Drop you (or significantly raise your rates) for causing the crash.
- Hire cut-rate (i.e. inexpensive) defense attorneys in the event of a lawsuit.
- Dispute the medical necessity of certain treatments or procedures by the victim in an attempt to lower the payout.
- Claim the victim’s treatment is unwarranted in an attempt to lower the payout.
Scenario: You are the victim of an accident
If you are the victim of an accident, your insurance company should act in good faith to settle your claim pursuant to the terms of your uninsured motorist benefit coverage.
Lower tier insurance companies:
- Delay on returning your calls/emails. Delay frustrates the process.
- Require you to repair your vehicle at budget body shops.
- Decline to cover the full damage to your vehicle and/or use third-party parts (as opposed to OEM parts).
- Skimp out on rental car coverage.
- Look for ways to void your coverage by finding an inconsistency with your application which they claim is a “material misrepresentation” (i.e. incorrect address, number of drivers, number of claims).
- Take a sworn statement (deposition) of you an in attempt to void your coverage and/or reduce your payout.
- Make a low-ball offer to settle your claim.
- Argue that your treatment is fraudulent. They will send you to their doctors (“shills”) to cut-off your PIP benefits.
- Argue your treatment is fraudulent. They will send you to their doctors (“shills”) to claim that your injuries are pre-existing and/or unrelated to this claim.
- Claim your treatment is unwarranted.
- Hire private investigators to videotape you performing activities of daily living.
- Dispute the medical necessity of certain treatments or procedures.
- Drop you (or significantly raise your rates) for causing the crash.
- Deem you to be at-fault for the crash to avoid paying the claim.
If you cause a crash or are a victim of a crash, the last thing you want is your insurance company to make a low-ball offer to settle the claim forcing you into a lawsuit.
A good insurance company will make a fair offer to settle the claim in an attempt to avoid a lawsuit.
How to Differentiate the Tiers of Auto Insurance Carriers and Determine Who to Choose
- Look at their reviews from reputable sources.
- Compare price. Auto insurance companies use proprietary algorithms to determine rates. Your rate may be different from your neighbors’ rate even on similar vehicles. As a result, price out a number of carriers to determine the best bang for buck.
- Cost-benefit analysis. A filet at Capital Grill is better than a filet at Outback, however, at what cost? Is Capital Grill’s filet $1 better? $5 better? $10 better? $100 better? Try to find the best company at a reasonable price. Depending on a number of factors (accounting for risk), our clients sometimes receive less-expensive quotes from higher-tier carriers.
The following list is our opinion on some of the better auto insurance carriers in Florida. If the price is similar, go with the higher-tiered option.
Tier 1 (in no particular order):
- Chubb
- Amica
- AIG
- Pure
- Fireman’s Fund
Tier 2 (in no particular order):
- The Hartford Travelers
- Farmers
- USAA
- State Farm
- Auto Owners
- Nationwide
- American Family
Tier 3 (in no particular order):
- Progressive
- GEICO
- Allstate
- Liberty Mutual
- Mercury
Avoid at all costs:
- National General
- Infinity
- Windhaven
- United Auto
- The General
- Kemper
- Incline
The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Please consult with a licensed insurance agent when determining which auto insurance to purchase.
If you have been in a vehicle accident, and need representation from a trusted lawyer, contact Lyons & Snyder at MyTrustedLawyers.com. With the help of an experienced South Florida personal injury lawyer, you can ensure your strategy and claim are strong to seek all the damages available to you. Marc Lyons and Philip Snyder have been litigating personal injury cases since 2008, securing compensations for clients in cases ranging from wrongful death suits to truck accident claims. If you need guidance in a personal injury case, contact Lyons & Snyder at 954-462-8035 to schedule a free consultation.
