If you have noticed an endless amount of auto insurance commercials on television, you are certainly not alone. No matter what part of the country you live in, car insurance companies are working in overdrive to either maintain or get your business.
The impetus behind all of the major insurance companies getting on board with massive advertising campaigns was the move of one major company to directly market to consumers rather than going through insurance agents.
They did this through an intense amount of television advertising, which then other car insurance companies picked up in order to keep pace with a major player in the car insurance game.
The Competition Among Car Insurance Companies for More Customers
Car insurance companies know that all drivers will need to have car insurance.
They have a fairly captive audience because car insurance is a reality for everyone. Car insurance companies rely on a variety of advertising tactics, including print media, social media, television advertisements, radio commercials, and online ads.
Most drivers in the U.S. are insured by the major players in the auto insurance game, and these companies are the ones that are investing the most money in television advertising.
Before you commit to any particular auto insurance company, you need to do some further digging into the record of the car insurance company and whether you are getting all the coverage you need for the right price.
One place to start looking for this information is with your state insurance department.
They will have information on the official registration status of the insurance company to operate in that state and whether there are consumer complaints against the car insurance company.
You always want to make sure that you are insured by a reputable company in your state.
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Regulation of Car Insurance Companies by State Officials
Under the McCarran-Ferguson Act, states have the capacity to regulate the car insurance industry and all companies that sell car insurance to drivers.
State departments of insurance regulate insurance companies within their state by making sure that there is a way for high-risk drivers to still be able to get insurance and protecting insurers from bad faith actions by insurance companies.
State insurance departments also make sure that there is sufficient competition among insurance companies so that consumers are able to get a competitive rate on car insurance.
Each auto insurance company has a different way that rates are calculated for drivers, even though much of the same information is used by the major car insurance companies to determine the relative risk of each driver.
There are some general factors that contribute to the rate that you pay for car insurance:
- Your driving records
- Your credit score
- The type of car you drive
- Where you live
- Your driving experience
- The other driver’s in your house
- Whether you have been dropped by an insurance company for not paying your premium
The underwriting process undertaken by each car insurance company will verify the information you provide in regards to the above factors.
You want to be sure that you are giving accurate information in seeking quotes because if you have not, this will be uncovered during the underwriting process and could result in you being denied for the auto insurance coverage that you need.
Some of these factors you can influence. For example, if you are able to improve your credit score, you may be able to get a lower rate on your car insurance.
Every car insurance company uses a different equation in determining the risk for each driver to be insured. Before you accept any particular quote from a car insurance company, make sure that you have enough quotes to make an informed decision.
Also, keep in mind that some companies target a different profile of drivers and do not offer rock-bottom premiums so that they attract a higher economic class of drivers.
This is because those drivers tend to be more loyal and have fewer problems paying their premiums online. They also probably maintain more coverage in general.
Policy Information from Various Insurance Companies
If you think about the types of commercials you see on television from car insurance companies, you probably cannot recall much of the substance of the policies being offered.
Instead, car insurance companies focus on other aspects of their brands, such as their reputation for customer service or their rates in comparison to other companies.
In general, most car insurance companies are attempting to build brand awareness through television advertising so that customers have a positive association with their brands.
In fact, you can probably think of the major slogans or jingles used by the top insurance companies right off the top of your head.
Even though getting insurance through a stable company that has a great reputation for taking care of its customers is very important, the specifics of your policy are essential in determining why you choose a particular car insurance company or coverage.
This is why it is imperative that you take the time to read the details of your policy and know exactly what is covered.
The declarations page is a great place to start in understanding the most important details of your car insurance company.
The Bottom Line
To recap, so many car insurance companies invest money in television commercials because they are trying to sign up and maintain as many customers as possible to their brands.
Television commercials are a great way to reach a target audience in a specific area, which is helpful for car insurance companies in going after a particular subset of customers.
While it is easy for drivers to shop around for different car insurance quotes, car insurance companies know that it is more important than ever for them to maintain brand loyalty among customers.
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