With some minor exceptions, there should not be much of a difference in the legalities of the insurance policy between different insurance companies. Although, there are huge difference in an insurance company’s willingness to over deliver on the promise they made when you agreed to pay premiums. In this article, I will mention some examples I have come across in my 7 years of insurance experience. Our agency primarily sales Progressive Insurance, Travelers Insurance, and The Hartford Insurance, so I will give some examples I have seen between these carriers and other insurance companies.
Timeliness in Paying Claims – An auto insurance company must legally respond to a claim within 30 days of the insurance company being notified. Some companies like Progressive Insurance resolve a claim as fast as the next day. Progressive Insurance also gives the appraisers (the guys driving around in a Progressive car) the ability to resolve a claim and write a check instantly if the sum is a small amount (not sure what the amount is, but I have seen them cut a $1,500 check). They actually have a printer in their car and they can write checks instantly.
Denying Claims – An auto insurance company may deny a claim for many reasons. I once heard about a case where a pregnant wife was driving to a construction site to deliver nails to her husband. While in the construction site, she hit a vehicle and caused $4,000 damage to her own vehicle. The 3rd rate insurance company denied the claim because they considered this “business use”. Technically, it was considered business because she was running an errand for her husband’s business.
On the other hand, a customer once lied to me and told me he did not use his minivan for business, so I insured him under a personal policy. 3 months later I found out he converted his van into an ice-cream truck and had an accident while at work. Progressive Insurance paid the $1,000 claim and sent the customer a notice of “Non-Renewal”, which means they will not renew the policy when it expires. In my opinion, this is much better service; Progressive could have denied the claim, but chose not to.
Late Payments – If your payment is late, the insurance company has the right to cancel your policy after 10 day notice. Some 3rd rate insurance companies send you a bill 10 days before with a notice of cancelation (in other words, every bill you get is a notice of cancelation) and they will cancel your policy the next day after payment was due. Then, if you wish to reinstate, you have to pay a reinstate fee.
On the contrary, most insurance companies will give you a 10 day notice. Some other companies like The Hartford Insurance and Travelers Insurance, will take up to 30 plus days to cancel your auto insurance policy (it may vary based on your billing cycle). This is a good thing if you forgot about your bill.
In summary, most auto insurance companies are legally bound by a very similar contract. The difference is how well they deliver. Will they only fulfill what was promised and nothing more, or will they over deliver on that promise? This article was written by Jesus R. Olivares at Bound Insurance. Contact us with any question or concerns. We can be reached at 512-454-7799 or by email at firstname.lastname@example.org/.