Regional vs. National Auto Insurance Policies: What’s the Difference?
It’s no secret that shopping for auto insurance can be tricky. Not only is the jargon overwhelming and the paperwork excessive, but the different policy types can be enough to make your head spin!
One of the many decisions you’ll need to make? Whether to purchase national auto insurance or go with a regional carrier.
The differences between the two types can be a little confusing, so we’re here to break it down for you. Read on to learn how the coverage compares and what you can expect from each one!
What is a National Auto Insurance Carrier?
As their name implies, national auto insurance carriers are big. These are giant companies with coverage areas that stretch across multiple states.
As such, they usually have more resources at their disposal. This means they’re able to invest in the modern technology systems and personnel resources required to provide a range of policy options to meet any request. They perform extensive research into the world of risk and spend much of their time and money on launching new solutions and products.
As a policyholder, working with a national carrier can mean a more seamless insurance purchasing process. These companies differentiate themselves from the competition by providing innovative solutions that appeal to customers and distribution channel partners alike. An added benefit is that most national companies have substantial reserves that enable them to quickly process any future claims with ease.
What is a Regional Auto Insurance Carrier?
Compared to national auto insurance carriers, regional companies are much smaller in size and bandwidth. While they might not have equal coverage access, they are able to customize local policies to meet your needs. They also have fine-tuned operating processes, although some struggle to achieve growth and modernization amid competition from national carriers and insurance startups.
As such, they tend to look for cost-effective ways to serve clients and stay competitive. They look for new market opportunities and innovative approaches, including digital automation, to sustain profitability and drive growth.
In terms of the purchasing process, regional carriers work equally hard to make sure it’s as painless and easy as possible. Most are easy to access, and well-versed in their local territories. In fact, these agents can customize an auto policy based on the risks associated with your local market, so your needs are always covered.
Important Points of Comparison
Both national and regional auto insurance carriers offer their fair share of pros and cons. Wondering which one to go with? Let’s take a look at a few points of comparison that can help you make a decision.
When it comes to customer service, there are many advantages to partnering with a regional auto insurance company. Though their pockets might not be as deep as their national competitors, they’re often more accessible. You’re also more likely to speak to the same person on the phone when you call.
The agent dedicated to your account will become familiar with those details and can recall them as soon as you get in touch. When you’re in an emergency or need to file a claim ASAP, this personalized service can make all the difference.
For a regional company, you’re more than a number on a list. You can usually expect more personalized service when you work one-on-one with these carriers. In fact, most local providers work as insurance brokers rather than aggressive sales agents for bigger companies.
This way, they can work with myriad car insurance companies to create hybrid or customer-centric plans that national carriers don’t have access to. Along the way, if you experience any issues with your plans or want to look at other ones, the broker can quickly switch you to a different option.
A national carrier is simply too big to offer the same connection. Those agents deal with thousands of customers on a daily basis, so you might interact with multiple people over the course of a given day. In general, they tend to be inflexible, offering a standardized and more corporate approach to business.
Of course, one of the most important questions you might be asking is, “How do national and regional auto insurance carriers compare in terms of pricing?” You want to make sure the company you invest in is the best deal around, taking into consideration the level of service and policy features offered by each.
On the basis of purely cost, these two entities can be very competitive. Because there are so many different companies in both spheres, it isn’t possible to set a specific price for one plan versus another. Yet, curious customers aren’t without recourse.
For a closer look at prices, you can simply request different quotes for the same type of auto policy coverage from each option and compare them! Today, online tools like ours make this step easier than ever. In addition to auto insurance, you can also compare life insurance, home insurance and health insurance providers in seconds.
Once you do get your quotes back, be sure to compare them thoroughly. If a dependable regional carrier with a solid reputation offers a plan that’s significantly lower than the national option, resist the urge to be swayed by name recognition alone. There’s no need to shell out more money each month simply because you’ve heard of one company over another.
One important issue to keep in mind? Some mechanics are more comfortable interfacing with large, national insurance carriers simply because they’re more confident that they’ll get reimbursed for their services. If you have a trusted mechanic you’ve gone to for years, talk to their team before making a decision.
National carriers naturally have a wider spectrum of coverage. They’re able to reach across multiple locations and markets, but they are not specialized in one particular area. As such, they tend to take more of a one-size-fits-all approach, providing standard coverage in all of their markets and locations.
On the other hand, regional carriers offer more limited coverage. Yet, this makes them more familiar with the areas they do specialize in. They understand the insurance needs associated with your specific location and can provide plans tailored to those risks. For instance, if you live in a city with a high rate of car accidents, a regional insurance carrier can offer helpful advice and provide more customized insurance products than a national carrier could offer.
As mentioned, national carriers can process policyholder claims at quick speeds, thanks in large part to their oversized reserves. Conversely, regional carriers tend to take a little longer to investigate and scrutinize them, due to the limits on their resources and reserves.
Collectively, national insurance carriers manage far more drivers than regional carriers do. This allows them to offer larger policies and a more consistent claims management process. In turn, the more claims they successfully process, the more their reputation grows and the higher their policyholder numbers climb.
Thus, their operating profit tends to far surpass any claims they do handle. However, national companies have the resources to keep claim costs as low and manageable as possible. They do so through the following means, among others:
- Offering low settlements
- Establishing networks of preferred repair mechanics
- Seeking reimbursement from other insurers when another driver is at fault
The Issue of Fraud
National carriers earn customer confidence due to their household name and good reputation. Yet, it can be difficult to access reviews, testimonials and other resources when you’re researching a regional carrier. Some fraudulent regional “companies” have used this hindrance to their advantage, posing as reputable carriers when they’re anything but.
That’s why it’s always smart to do your research when you’re in the market for a new auto insurance policy. Take the time to learn as much as possible about the company in question before signing on the dotted line and agreeing to any terms. This simple step can help you identify the most authentic regional carriers in your area.
Find the Best Auto Insurance for Your Needs
Looking to drive off with a new auto insurance policy? We know it’s easier said than done.
That’s why we’ve made it our mission to help you navigate this challenging journey. Whether you’re deciding between a national auto insurance carrier versus a regional one or comparing a host of other options, we’ve got you covered.
Our online tool makes it easy to compare providers in seconds. Start here to get started and save!