Shopping for Car Insurance in 2019

We recently decided to embrace our city lifestyle and sell our second car.  We were thrilled about not paying insurance premiums on a car that spent nearly 360 days of the year in our garage.  Next step was to call State Farm to get that monthly payment off our books.  This is where my story gets interesting.  State Farm basically informed me I would only realize 50% of my projected saving because now, the insurance premium on my existing car would go up.  I know this is how businesses operate but its crazy.  I am not choosing to split my business with another company.  I SOLD my car - why I was penalized was beyond me...this is when I decided to price shop for insurance.  My buying process has been confusing, time consuming and has left me feeling like I am not making an informed decision no matter which way I go.  In this article, I have called out three things that State Farm & Allstate could have done better by way of improving customer acquisition, retention and loyalty :

  1. Connect Online and Offline Experiences : Allstate, my next choice, made things easy by giving me the ability to run a quote for my auto and home owners insurance online.  But then, the online engine didn't work for my home insurance quote.  So I got a call from their customer center to complete the process.  And the very nice lady, after about 20 mins, informed me they could only process home owners insurance up to a certain $ amount and mine was higher and would need to be handled locally during the week.  OK. 
    On Monday, I call the local agent who informs me he doesn't have access to anything I did online (?!?!?) and I would need to start from scratch.  He "understood my frustration and gets asked this all the time and has no good answer." As someone who works in digital, I was willing to bet a pretty big amount of money he just didn't know how to retrieve my quote from the system.  I hung up, called a different office and was able to pick up right where I left off.  Allstate, it would be amazing to be able to run an online quote for all scenarios but barring that, it would be great to train every agent to handle online to offline transitions seamlessly.

  2. Create Guided Buying : Allstate and State Farm are offering me different coverage levels at different prices.  My house is my biggest asset and my biggest liability.  I don't know if Allstate's coverage levels are too low or if State Farm's coverage levels are too high.  A quick Google Search on 'how much homeowners insurance do i need' also doesn't yield any results that inspire confidence in me because they know nothing about my house (an all brick, national registry of historic homes property) nor the value of my other assets which might be at risk in the event of a lawsuit.  So, at this point, I am making a purely intuition based decision but this would have been a great 'moment that mattered' to win my business.  Imagine a scenario where someone on the Allstate team would be able to show me a coverage level report (social proof) of others in my household income bracket, with my assets.  Businesses need to put themselves in the shoes of a customer, unpack the anxiety and indecisiveness that buying their product might entail and actively remove those barriers.

  3. Reward Loyalty : I have been a loyal State Farm customer for many years.  Current pricing models at Allstate and State Farm seem to encourage price shopping and carrier hopping.  In my ideal world, in my second year at State Farm my premiums would be lower (all things around violations, accidents etc. being equal).  Or, as my life changes, the insurance company could automatically alert me of recommended coverage changes.  Instead, each company continues to raise my premiums and every few years, I play this game of switching to get a lower price.  Maybe this tells me their customer acquisition costs are so low that they would be leaving more money on the table by rewarding my loyalty.  Or, I don't fully understand the insurance model having never worked in the insurance industry.  But in the age of value providers like Progressive and Geico and disruptors / new entrants like Metromile and Hippo, getting your customer to stay with you should certainly be a bigger priority than their experience and pricing seems to indicate.  “In the world of Internet Customer Service, it’s important to remember your competitor is only one mouse click away.” – Douglas Alexander Warner
At the time of writing this, I haven't switched my insurance.  I'm going to need to make a decision with imperfect information. I tell my team to get comfortable with this all the time.  Time to put my money where my mouth is 😁


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