4 Ways Car Insurance Companies Fail Customers

Car insurance can save the day, especially if you are involved in an expensive accident that would have cost you thousands of dollars in medical bills or repairs without insurance. Unfortunately, some characteristics are common throughout the car insurance market. These annoying tendencies can leave customers feeling confused, unappreciated, and frustrated.

Mysterious Rate Calculations

It is common knowledge that a driver’s car insurance rates are based on their driving history, age, marital status, credit report, zip code, gender, and the type of car they drive. What is not so clear is how each insurance company measures each of those categories to determine the customer’s rate.

Every company uses a different scale, which means that a single customer could receive an extremely wide variety of quotes from several insurance companies based on the same information. The only way to make sure you are getting the best rate for the coverage you need is to compare quotes from at least three different insurance companies.

High Susceptibility to Fraud

The insurance industry is constantly plagued by fraudulent claims. The trouble is the companies don’t have a good way to determine which claims are fraudulent versus which claims are genuine. By the time they figure out a specific insurance scam and protect themselves against it, the scammers have developed a new scam. The real victims of this continual fraud are the honest drivers who have to pay more for their insurance policies to cover the losses created by the scams.

The Insurance Information Institute reports that insurance companies pay out more than $30 billion every year for dishonest or exaggerated claims. The high cost of keeping up with insurance theft is one of the main reasons the companies have to raise their rates.

Policies are Complicated

The language of many insurance policies is almost impossible for the common driver to understand. Insurance policies tend to be written in legal language that protects the insurance company from any loopholes that a driver might be able to use to increase a claim. It almost feels like insurance companies are intentionally misleading customers by making their policies so difficult to read and understand.

Customers need to take their time and research a car insurance policy thoroughly before signing on the dotted line. It is important to understand exactly what is covered by the policy and exactly what is not covered by the policy before you need to file a claim.

Slow Communication with Customers

Many insurance companies are having a hard time keeping up with the communication demands of their more tech-savvy customers. Drivers want to be able to ask questions and receive information through e-mail, but insurance companies seem to be resistant to jumping onto the information superhighway. The majority of today’s car insurance companies don’t offer electronic policy updates or other digital conveniences that many drivers, often a younger demographic, prefer.

Research shows that these drivers are also the quickest to search for a new policy when they feel slighted, so insurance companies that pay attention to the growing trend toward e-mail will probably have the most success in the next few years.

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