Discount Auto Insurance Quotes – Why Buy From a Stock Company

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The point of view of the stock company is expressed by a representative of a prominent stock insurance company as follows:
First of all, the most potent mutual appeal is based on lower price. In this instance we might quote that well-known saying, “There is hardly anything in the world that some man cannot make a little worse and sell a little cheaper, and the people who consider price only are this man’s lawful prey.” Compare discount auto insurance quotes now!

It is always difficult to argue against price when the opposite element is service. Direct writing mutuals do not pay agency com-missions. Capital stock companies do pay these commissions. This leads us, then, to the advantage of a local agent versus a salaried mutual claim adjuster in some other city or possibly in another state. The stock companies say it is an advantage to have the services of an agent available in the event of a claim just as it is an advantage to have his services when the insurance is written.

Direct writing mutual companies practically guarantee a 20 per cent return of the premium at the end of the policy year. They call it a dividend. If they can return 20 per cent at the end of the year, why do they collect it in the first place? The reason, of course, is that in this way they obtain the use of millions of dollars that do not belong to them for a one-year period.

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Another element is the American way of doing business with invested capital earning a fair return as against the socialistic principle of self-insurance. The fundamental strength of a mutual company, lacking capital reserves, lies in the fact that the members insure each other, although they are total strangers. Non-assessable mutual policies naturally defeat the purpose, if indeed there is such a thing as a non-assessable mutual policy.

Mutual organizations claim that they skim the cream from the top of the bottle and will consider nothing else. Stock companies operate on the law of average, trying to give equal protection to all. They do not knowingly accept bad risks, but, on the other hand, they do realize that the good risk today can be the bad risk a few years from now. Get discount auto insurance quotes online!

At that point the mutual, in theory, at least, runs out on its faithful policyholder and substitutes for him a risk which experience has shown is better as a class. This applies more to property insurance than to liability.

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