Comparing ca insurance quotes are essential for the consumer trying to find the best car insurance policy! Of this there is no doubt – but is it possible for the average consumer to “fully” compare these quotes?
At first glance we might easily say that –Yes – that is why we have insurance aggregators and comparison websites! I believe that with all the different car insurance offerings it is near to impossible to effectively compare any quotes other than the most simple or “stripped down” car insurance quotes.
Example of car insurance quotes
I would like to argue this with reference to an actual example sent to me by a car insurance client in Cape Town. She is a 37 Year old single lady and provided the following details:
- The vehicle to be insured is a Volkswagen Polo 1.6 Comfortline, 2004 model
- The vehicle was comprehensively insured at market value R72,700
- She paid the monthly premium of R534 through a broker at a car insurance company
- Additional benefits include roadside assistance + general liability of R500k + insurance of the radio @ R1,500 + excess buster
- After negotiations this was lowered to R455 with a Zero excess
- She approached a direct insurer and was quoted a monthly premium of R284
- Additional details include a joining fee of R205, the premium is fixed for 3 years and the general liability is for R5m
- The excess will now be a flat rate of R2500 and there is also a small dent policy
What does this say about comparing car insurance quotes?
I believe that comparing requires far more than merely comparing premiums. Even though car insurers are innovative in their insurance offerings and product design – they are also making it nearly impossible for clients to compare the offerings from one provider with that of another!
Extras / Sweeteners / Add-on’s / Additional Benefits – what to make of this?
It is these innovative additional benefits that make a comparison so difficult! The car insurance industry is highly competitive and the car insurers are constantly trying to find that one ingredient that could give them the edge! They design new products and even patent these add-on’s to stop others from doing the same.
Additional benefits include:
- No claims bonuses
- Premiums fixed for 2 or 3 years
- Roadside assistance
- Flat or no excess
These benefits do not have an easily identifiable monetary value – thereby making it very difficult to estimate the true value of the benefit when comparing one quote with another!
Are car insurers intentionally making it difficult to compare their insurance quotes?
Product innovations and sweeteners are not unique to car insurance policies. In the pension fund industry we find the same variety in life cover with additional benefits such as varying free medical limits, funeral benefits, health and gym benefits and even educational benefits for remaining children.
We cannot expect from car insurers to merely provide the exact same benefits than all the other car insurers. This will not be in the interest of the consumer and could be regarded as anti –competitive. In the same way that fast food restaurant spice-up their beef burger with a special sauce or free drink, car insurers providers can be expected to out-wit competitors with unique product offerings!
Advice to the car insurance consumer
What can the consumer do to avoid all the clutter?
- The consumer needs to be aware that there are many different products and that they differ in more than just price.
- The consumer should approach any comparison with caution and take some time to compare offerings.
- Do your homework to gain an understanding of the true value of additional benefits.
- Only through some research and investigation will you be able to make an “informed” decision.
- Use the internet and ask around to gain the necessary confirmations – chat to happy and disgruntled customers to find the correct questions you will need to ask!