Do Your Homework

July 18, 2013
BY Linda L. Esterson
It takes more than 15 minutes to save on auto insurance

071913_do-your-homeworkHoward Ashkin carried insurance with the same company for more than 25 years.
He started with car and renter’s insurance while in his 20s, then as life changed, he picked up the phone and called his broker to add new policies.

“He had my history and I liked him,” said Ashkin, a Reisterstown resident. “It was easy to apply.”

It took a few bad turns with that insurance company for Ashkin to shop around and realize there was more to insurance than just history.

One was his life insurance policy expiring after 20 years with no call from the agent in advance about a renewal. Instead, he got a bill that was seven times higher than the premium he was paying. Another was a no-fault accident that ended up with a court settlement with the carrier not backing his family.

He entertained quotes from companies like Allstate and Nationwide, and he learned about discounts he hadn’t received with his previous company.

“I was amazed there were discounts I didn’t even know about,” he said. “I was so dependent on the agent and the company I was with.”

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Chuck Lurie says that independent insurance brokers don’t lean toward one company.

Ashkin turned to Diversified Insurance, which has handled his employer’s insurance for about 40 years. The ind-ependent agency shopped insurance for the Ashkins with many different carriers. Because independent brokers don’t lean toward one company, they shop the market for the best premiums and coverage based on the family’s needs, says Chuck Lurie, owner of LC Insurance Group, LLC.

Diversified put out a request to many companies and compared price and coverage. Ashkin ended up with more protection for less money. When it came time for renewal, he went with the package from Diversified. And a year later, he was stunned to receive a $200 credit and a lower rate for the second year after no claims were made for the family.

Using an independent broker is just one of three ways to purchase car insurance.  People also can go online, do their own investigation and purchase insurance via the computer. They also can go to a direct writer like Allstate, Nationwide or State Farm, and deal with someone who represents only that one company.

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Andy Heller says that it’s important to buy insurance from a company that can back you after an accident.

“Auto insurance is underwritten based on driving record, credit history and the way you drive,” said Andy Heller, an independent agent with Woodholme Insurance Group. “It all comes down to doing your homework and research.”

That research should include making sure the carrier is a quality and financially stable firm with high ratings through the Agency Management System (AMS) and AM Best ratings.

“You want to make sure it is a solid company that in the event of a claim, they will back it up,” Heller said.

Liability insurance is written two ways, which protects the car’s owner, Lurie said. Single limit liability covers bodily injury and property damage up to a certain designated amount. Split limit insurance designates separate amounts for injury, property damage and liability. There’s also uninsured and underinsured motorist protection required by law in the event that the other driver involved in an accident has no insurance or not enough to cover damages.

Auto insurance coverage also inc-ludes Personal Injury Protection (PIP) of at least $2,500 to cover lost salary or hospital costs in the event of an accident, regardless of fault. This is required by Maryland law. Also required if a car is financed is comprehensive insurance that covers fire, theft, vandalism and glass breakage and collision insurance that covers vehicle repairs.

Lurie explained that some policies include extras that are optional. Some policies include funding for car rentals if repairs will leave a driver without a vehicle. Others include coverage for medical expenses, if the PIP coverage or medical insurance are not used. Other policies include the use of manufacturer’s parts instead of aftermarket parts for repairs, which some people prefer.

Lurie suggested paying close attention to television commercials that don’t always tell the full story. When the ads mention accident forgiveness, viewers shouldn’t be fooled.

“Is it true accident forgiveness?” asked Lurie. “If there is an accident and you’re not charged for it and they take away the good driver discount, it’s the same percentage as charging for the accident.”

There are also times that rates change, and any carrier can beat another’s price for the same coverage, Lurie said.

“Each company has its own enh-ancements,” he says. “You’re not just buying by price. You need to buy the proper coverage.”

In addition to an independent agent shopping with multiple companies, there’s also a comfort level in working with one agent who has a family’s best interests in mind and a history with them.

“It’s a personal business; it’s about value, relationships and understanding needs and issues,” said Heller.

“We work to find the pieces to fit the puzzles. It’s tough to do that on the
Internet or by calling an 800 number.”

Like Ashkin, Joel Fiddle had the same carrier for a long period of time. He realized one day that he was paying too much money for car insurance. He called Safeco for a quote and spoke with someone in Ohio. The rates were much cheaper.

Last fall, Fiddle learned that Heller represents Safeco and he hired him as his personal agent.

“I let him be my representative,” he said. “I wanted a local guy instead of calling an 800 number and getting nobody.”

Fiddle called Heller to add his daughter, Hannah, to the policy as a new driver. He likes the personalized service he gets with Heller.

“There are cheaper places and more expensive places,” he said. “But you
get what you pay for, like anything in life.”

Linda L. Esterson is an Owings Mills-based freelance writer.

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