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Why do some people say – don’t buy Progressive auto insurance?

Like most other large property & casualty companies, Progressive Insurance has both fans and foes. Progressive is one of the nation’s leaders in the underwriting, sales, and administration of nonstandard auto insurance for individuals considered as “high risk” drivers.

Auto insurance isn’t a luxury purchase. Drivers must buy auto insurance before getting behind the wheel of a car in every state but one. But paying too much for auto insurance rates isn’t required. Every driver should compare auto insurance quotes at least once a year. Use the ZIP code and the rate tool now!

While the company also sells commercial insurance for companies that need to insure light or heavy trucks and vans, Progressive’s strategic focus remains the sale of consumer insurance by telephone or through the company’s website. Progressive uses a network of 30,000 independent insurance brokers and agents to sell insurance to individuals. Nonstandard auto insurance premiums account for about 60% of Progressive’s revenues.

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How does Progressive leadership affect consumer perception?

Progressive’s Chairman of the Board, Peter Lewis, may be another reason some people don’t want to buy auto insurance from the company. According to the Columbus, Ohio Dispatch dated May 2, 2011, Lewis urged the Ohio legislature to legalize the medical use of marijuana. A preliminary proposal has been presented to the Ohio House of Representatives. For some people, this may put them at odds with the company due to their point of view on this topic.

As a large car insurance company competing on accessibility and cost of insurance, Progressive’s team of independent agents may not offer the same auto insurance quotes to an individual buyer of insurance. For example, a buyer of auto insurance is contacted by two independent sales reps. Depending on the sales agent, the individual may receive two different price quotes for the same auto insurance from the same company, according to ComplaintsBoard.com.

Why do Progressive customers complain about cost?

High risk drivers pay more for auto insurance than drivers with good driving records (usually considered no moving violations or accidents in three years plus) and credit history. That’s another reason Progressive clients may complaint about costs of auto insurance.

High risk drivers, depending upon a history of accidents, moving violations, DUI/DWI, create the expectation of future claims payments for the insurance company. Paying heftier premiums than friends or family members may not endear the high risk driver to Progressive, or any auto insurance company.

It’s easy for customers to change auto insurance providers, and Progressive’s television campaign featuring red lipstick-wearing Flo encourages customers to check out the company’s auto insurance rates. Progressive offers a competitive analysis of how much a customer will pay for auto insurance at a few other big name insurance companies. It does not compare with all insurers in an area, or many of the smaller ones.

Is Progressive a good company?

Progressive’s revenues, unlike those of some competitors, come from insurance policy premiums (or payments on auto insurance billed monthly, quarterly, or annually). Progressive is one of a group of large auto insurance providers (including Allstate and State Farm) that makes most of its money from auto insurance premiums.

The company doesn’t earn a significant amount of corporate revenues from investments. Unfortunately, Progressive did own some subprime investments and took a loss because of the investment portfolio in 2008. The company’s 26-year string of gains was broken that year.

If you’re considering changing auto insurance companies, check out the company with your state’s department of insurance. You’ll obtain free information about the customer complaint and remediation process offered by that company in your state.

Checking out the company’s financial history is also important. If your insurance company reports a declining rating from A.M. Best or Standard & Poor’s, the company may not have the assets on hand to pay customer claims. Progressive is rated A+ and stable with AM Best.

Progressive’s insurance operations remained profitable during the global financial crisis. The company opened new geographic areas for the distribution of its personal insurance products. In 2009, Progressive launched the sales auto insurance policies in Australia. Australian consumers, like Americans, sign up for Progressive auto insurance online.

So when you hear people caution you against Progressive, it may be because that person is a high risk driver paying high rates, or they may have a personal issue with leadership. Finally, of course, they may have just had a bad experience with the company despite its high ratings and reputation. Many people also like Progressive auto insurance because they’ve experienced responsive customer and claims service, and because they get good rates with the comparison quote system.

Comparing your auto insurance rates with those of other insurance companies is one of the ways you can save money on auto insurance. Get fast, free auto insurance quotes from other insurance companies by typing your home ZIP code right now!

References:

  1. http://ambest.com/
  2. http://www.standardandpoors.com/home/en/us

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