Among car insurance customers who shopped around in the last year, 43 percent switched to a new insurer, according to the J.D. Power and Associates 2012 U.S. Insurance Shopping Study.
Many of those drivers bought from the brand-name aisle. But others headed for the boutiques.
Auto insurance companies can sell policies to a wide group of customers but still cater to specific demographics -- the military, teachers, churchgoers, the elderly and even beer makers -- with discounts, payment plans and very specific types of coverage. Insurers don't necessarily seek out these groups for their driving habits, says Mike Vanderwerker, a board member of the Independent Insurance Agents and Brokers of New York (IIABNY) -- although they take driving records into consideration when setting rates for individual members.
Insurers seek groups with stable membership and businesses that have low employee turnover, such as municipalities and school districts in hopes of keeping a large group of continuously insured customers. In return some companies offer a 10 percent discount from their regular rates, Vanderwerker says, going even deeper with a discount for payment by payroll deduction. (See our guide to car insurance discounts.)
But a group policy isn't the only way to get same kinds of tailored discounts. Many larger insurers offer affinity groups sharing a membership or diploma discounts on certain types of coverage.
Many insurers who cater to groups add customized coverage to seal the deal. Among them:
GuideOne Insurance. Calling itself the "nation's leading insurer of churches," GuideOne's "FaithGuard Auto" insurance has some unique benefits for people of faith.
The company covers up to $750 for tithes -- a driver's financial contributions to a church -- if the insured driver loses income because he or she was disabled in an auto accident. If an accident happens on the way to church, the company waives deductibles, doubles medical limits if non-family are in the car and injured, and pays up to $3,000 in car loan payments if the driver is disabled.
The Hartford. While the company has a range of products for all kinds of customers, its auto insurance for AARP members is about 10 percent less than what it offers nonmembers, Vanderwerker says. One reason it offers discounts to AARP members, the company says, is because driving skill improves with experience.
USAA. This insurance company for military members was one of the first to sell insurance to a specific group. Perks include big discounts for vehicles stored during overseas duty, for example. (See "6 jobs that get car insurance discounts.")
USAA has expanded beyond military members and offers auto insurance to their families and pretty much any relative of a service member. Customer turnover is very low, with 95 percent of customers staying with the company for life, according to its 2011 member survey.
Horace Mann. Educators are this company's target. Its "Educator Advantage" auto policy offers some benefits for teachers, such as waiving the comprehensive deductible for covered losses from vandalism on school property, and liability coverage when teachers transport students in their cars.
Other groups. The independent insurance agents group that Vanderwerker helps lead sells auto insurance to municipalities in New York. Premiums are paid through payroll deduction, helping customers spread the payments out. The coverage is portable even after a worker leaves the job as long as premiums are paid, Vanderwerker says.
Any occupation that doesn't have high turnover, and will thus lower an insurer's customer turnover rate, is game for a boutique discount, Vanderwerker says.
For example, IIABNY is developing a discounted auto insurance program for microbrewers. "Once we have a critical mass, then we can go to a client and negotiate a program for them," Vanderwerker says.
Insurers recognize that making beer has nothing to do with how microbrewery workers drive, says Vanderwerker. "Those are the guys that are least likely to be on the road drinking."
Roots in risky professions
Many specialty insurers were launched because no one else would sell to groups perceived as too risky, says Bob Hunter, director of insurance at the Consumer Federation of America.
USAA was founded by 25 Army officers to insure each other when no one else would. Lumbermen who couldn't get insurance elsewhere relied on Lumbermens Mutual Casualty Co., which later turned into Kemper. Farmers who couldn't get insurance formed what eventually became Farmers Insurance.
"Most companies can't really do that anymore because that might be considered discriminatory," Hunter says. While still offering the kinds of discounts and coverage aimed at their founding membership, almost all specialty companies grow to offer policies to a much wider base of customers.
Affinity discounts are available through the auto insurance giants as well. GEICO offers group rates to 275 professional groups and alumni associations.