GEICO (NYSE: NYSE:BRK.A), Progressive (NYSE: PGR) and Allstate (NYSE: ALL) have all recently run advertising campaigns telling consumers that their automobile insurance products could save consumers over the competition—and they’re all right.
Each of these companies can correctly state that they could save consumers hundreds of dollars per year versus the competition because there are huge differences as to what any given consumer will pay at any of the major insurers. For some consumers, GEICO might be the cheapest. For others, Allstate or Progressive, State Farm or anyone else could be the cheapest.
There are substantial differences between what insurance will charge a consumer based on that individual driver’s circumstances. Each insurance company uses its own criteria to assess your potential risk level and price your insurance policy accordingly. Each company can correctly state that they’re the cheapest because they’re all assessing different motorists profiles and presenting the results as typical.
The moral of the story is diligence—you need to be diligent when shopping for car insurance over the phone and on the web for the best deals. Make sure to get a coverage statement from each insurer that you’re dealing with and compare the different coverage’s you’ll receive on an apples-to-apples basis with other insurers’ offerings.
Typically, consumer advocates recommend that customers re-shop their insurance policies ever 3 years to ensure that they are getting the best deal. If you’ve recently been in an accident and it was your fault or get a reported ticket, it’s recommended that you wait until 3 years after that event has occurred before re-shopping your policy.
