Danger Ahead: High-End Cars, Low-Price Insurance
Atlantic Mutual Offers Drivers Questions to Ask About Auto Coverage and Claims Service
NEW YORK, March 9 -- With a few insurance companies heavily advertising low prices and the ability to get quotes over the Internet, many people have become more price-conscious when purchasing auto insurance. But choosing the lowest price could end up costing consumers a lot more if they have an accident, especially if they own a high-end auto, warns Atlantic Mutual.
"We are seeing a growing tendency among consumers to view auto insurance as a commodity product," said Dan Olmsted, president of Atlantic Mutual. "This is a dangerous misconception because coverage terms and limits and service quality can vary greatly among companies."
Atlantic Mutual is offering a free list of questions to ask when obtaining auto insurance quotes. Available at http://www.atlanticmutual.com/, the questions will help consumers understand the quality of coverage and service being offered. Four of the most important questions are:
Will the insurance cover replacement parts from the original manufacturer? Some low-price auto policies will only pay for "generic" auto parts from third-party manufacturers. The quality of these parts may differ from the originals. The discrepancy can be of particular concern to owners of luxury or high-performance autos. Policies designed more for the affluent customer will pay for parts produced by the original manufacturer, also called "OEM" parts.
How much will I be reimbursed if my car is "totaled?"
Even if your 7-year old Lexus looks and runs like new, standard policies sold at the lowest rates can take thousands out of your reimbursement by applying the most aggressive form of depreciation. Replacing your car -- even with another used one -- could seriously dent your wallet. Ask about adding an "agreed value" clause to your policy. This feature enables you to establish the value of your auto with your insurance company before it becomes a total loss, so you avoid an unpleasant surprise.
Will the cost of renting a comparable car be covered?
Even if you're used to ferrying the kids to school or commuting in a large sport-utility vehicle, low-price insurance policies may come with per-day and total spending limits that barely pay for briefly renting an economy car. Repairing or replacing your auto could take weeks, so be sure to consider policies with limits that will allow you to rent a comparable car for an extended period.
What quality of claims service can I expect?
Even companies selling low-price policies promise to deliver excellent claims service, so it's best to seek a second opinion apart from the company's website or advertising. Ask an independent agent which company has the best claims service. Or, check with your state's insurance department. Some states (such as New York and New Jersey) provide information about the number of legitimate complaints lodged against auto insurance companies.
"It seems so easy to compare by price, but insurance consumers need to dig into the more complex coverage issues too," said Olmsted. "Insurance is an important financial service, and like any service or product, you get what you pay for."
"That's why we recommend working with an independent agent," continued Olmsted. "Representing multiple companies, the independent agent has the expertise to discuss coverage and service as well as price and make sure consumers select the company that best meets their needs." Consumers can find a list of agents representing Atlantic Mutual at http://www.atlanticmutual.com/.
About Atlantic Mutual
Atlantic Mutual offers property-casualty insurance products for individuals with substantial assets to protect. The Atlantic Mutual Insurance Co., formed in 1842, is a mutual insurance company owned by its policyholders. Its products are sold through independent agents. Additional information about Atlantic Mutual can be found at http://www.atlanticmutual.com/.
