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Look at me! Auto insurance companies try to stand out from the crowd

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CarInsurance.com

Look at Me

Not happy with the way your car insurance company handled your accident claim? Ask for your premium payments back for that policy period. That's what Allstate is promising its policyholders. The nation's second-largest auto insurer is offering a money-back guarantee to let customers know the company backs its customer service.

The Northbrook, Ill.-based insurer in December added a "claim satisfaction guarantee" to its standard auto policies for no extra charge in Indiana, Michigan and Ohio. If this test program proves successful, Allstate will extend the guarantee to policyholders in other states, says Christina Tyler Loznicka, a company spokesperson.

"If for any reason a customer is not happy with a paid claim," Allstate will credit his policy for the premium amount, Loznicka explains. "No questions asked." The credit is equal to the premium for that policy period, which usually covers six months. To be eligible, customers must file a complaint within 180 days after the incident for which they filed a claim.

Allstate also provides "deductible rewards" on collision coverage for every year you go without an accident and safe-driving bonus checks for up to 5 percent of your premium.

You can find other appealing car insurance policy options from a variety of insurers:

  • Allstate, Erie Insurance, Liberty Mutual and MetLife offer a New Car Replacement option, so if you total your car you'll get money to buy a new car rather than a payout for your depreciated car value. (Make sure you know the restrictions though.)

  • Nationwide offers a Vanishing Deductible. Each year you maintain a safe-driving record, your deductible can drop $100 up to a maximum credit of $500.

  • Allstate, Erie, Nationwide, Progressive and other companies offer "accident forgiveness" for your first at-fault accident. You generally must meet certain requirements, such as being customer for a specified period. Erie goes further and will forgive all your accidents if you've been with Erie for 15 consecutive years.

Not your standard car insurance

Auto insurance companies are competing not only by offering special features to standard policies, but also by providing specialized coverage. For example, pay-as-you-drive auto insurance offers the opportunity to save significant money if you don't drive many miles annually.

Progressive pioneered the pay-as-you-drive concept with its program, now called Snapshot. With this usage-based insurance, customers plug a device into their vehicle to monitor how many miles they drive, when they drive and how often they make sudden stops. Once the Snapshot device has collected the driving data, Progressive gives consumers their projected discount.

In December 2010, California's insurance commissioner, Steve Poizner, approved the state's first pay-as-you-drive auto insurance programs. State Farm and the Automobile Club of Southern California now will be able to sell usage-based policies in California. State Farm's policyholders who drive less than 2,000 miles a year could save as much as 45 percent on a traditional six-month car insurance policy.

Paying for the auto insurance extras

Bob Hunter, director of insurance at the Consumer Federation of America, an advocacy group in Washington, D.C., notes that rewards like accident forgiveness don't always mean overall savings. He says car insurance companies build the cost of special features into their base rate, so policyholders don't save as much money as they might expect.

While many auto insurance companies advertise lower car insurance rates than their competitors, truly lower rates remain elusive. Hunter says that car insurance rates have held steady or fallen slightly over the last three years, even though claims costs have decreased substantially, or about 10 percent. Insurers "are not lowering rates as much as they should," Hunter contends. "But they're not raising them either. We should be happy about that."

Nonetheless, Hunter advises consumers to shop around for the best price and coverage. He recommends you consider not only car insurance prices but also a company's customer service reputation. Check your state's department of insurance website for consumer-complaint rankings. Hunter notes that evaluating companies based on slogans and advertising "is not a lot of help. Real information is helpful."

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