Do you read online reviews? Most people do. It’s nice to know how other shoppers rate the same product or service. In fact, most of us read reviews before making a significant purchase. However, when it comes to buying insurance, online auto insurance reviews don’t provide the information you need. Here’s why.
Are Auto Insurance Reviews Manipulated?
It’s sad to say, but most companies offering auto insurance reviews (and reviews in general) are doing so to make money. They are not offering the service to help consumers. Naturally, they claim their mission is to help consumers. My advice is to be skeptical. Even better, there’s an easy way for you to find out if these companies are looking out for you or for their own pocket book. Here are two simple tests of how truthful the auto insurance reviews you’re reading actually are:
What percentage of the companies rated receive a below average rating?
If the grading system is a 0 to 1000 point scale, how many companies are below 500 points? Alternatively, if the grading system is 0 to 5 stars, how many companies are below four stars? A grading system that’s sincerely based on helping consumers should have approximately half of the companies graded below average.
Why do other grading systems show most companies as nearly perfect?
Whether collecting reviews, performing user surveys or analyzing insurance company data, this is an expensive business. The costs can easily get into millions of dollars per year to collect and analyze data on a large number of companies. Unfortunately, consumers won’t pay for this type of information. Therefore, to build a sustainable business, review sites have to sell their information to insurance companies. Insurance companies then use the information in their marketing and sales materials.
Many review sites are established simply to make money. Making money is a very different goal than helping people. With making a lot of money as a goal, having a having a large number of customers is important. The best way to do this is simply to make most companies look really good. This is especially true if the company has a large marketing budget. Unfortunately, that’s not how insurance works. Insurance depends on paying claims. Every dollar spent on marketing is a dollar not available to pay a claim.
Online Auto Insurance Reviews are Often From Paid Reviewers
What type of person is motivated to write any review, in particular an insurance review? Let’s contrast reviewing insurance companies with the rest of our busy lives.
The rest of our life:
- You want to tell people when you find a good restaurant.
- Finding the perfect size, shape and color of a new outfit at a great price is information worth sharing.
- Reading a book that’s so riveting you can’t put it down to eat or sleep is information your friends should have.
Our insurance life:
- Most people pay the insurance bill and nothing goes wrong. There’s nothing to report in a review.
- Some people had a minor fender bender and the insurance company paid promptly to get it fixed. Many drivers have paid the cost of that fender bender 10 times over. Low cost claims are easy to pay. Therefore, companies typically just pay them to have a happy customer. In this case, there’s not much to report.
- High cost claims are totally different. When an insurance goes really badly the insurance company requires customers to sign a non-disclosure agreement before getting paid. This insures no one ever tells anyone just how terrible the service of that particular company actually is. Therefore, the person that signed the confidentiality agreement isn’t writing a review. That’s the person you want to hear from.
In light of these real scenarios above, who’s actually writing insurance reviews? Not surprisingly, it’s either people that are really upset with an insurance company, or they’re getting paid to write the review. The pay may be cash. Alternately, payment could be in the form of a coupon or gift card they can exchange for other services.
Want Real Information About Auto Insurance Companies?
Click the button below to get a free report on any auto insurance company. We measure companies based on their claims handling, service and the overall value they provide. If your company scores well, tell a friend. If they score poorly, find a different company.
Note: ValChoice does not receive any form of compensation from insurance companies for grading them. We rely solely on data collected by state departments of insurance to grade companies. Therefore, we use only the highest quality data available to determine whether companies are a good option from which to buy car insurance.