Not long ago, Tim Wahl, a Missouri agent sent me a copy of a recent Consumer Reports article on how to save money on car insurance. Oh joy, yet another article on how to save money on car insurance by someone who knows pretty much nothing about insurance.

During my 17+ years with the Big “I,” I did a lot of media interviews. I would always cringe when our communications department would ask me to talk to a writer doing an article about how to save money on car insurance. As if we need another article to join the 15,200,000+ articles that already exist. And they all provide the same advice.

And they all (pretty much) say NOTHING about the differences in coverage between policies or the claims practices of the carriers. So, why is this? My guess is that stating the truth, that buying insurance is not simply a matter of few tips or tricks, lessens the value of their articles. The reality is that articles of this type are dangerous and a disservice to consumers. This ignorant, simple-minded approach jeopardizes the financial solvency of American families.

For example, the article cited above says:

“Shopping around pays, too. In California, a driver combining homeowners and auto policies could save about $1,900, on average, by signing up with Geico vs. Nationwide.”

Is the coverage in both policies identical or does the Nationwide policy provide superior coverage and/or claims service? I don’t know, but I do know that, unless you consider such differences, you can’t say that the alleged $1,900 savings is worth it. It might be for some people but not for others. And this recommendation doesn’t take into account that there could be other insurers with far better coverage in the same price range.

As I began to write this article, I got an email from Tim Dodge at IIABNY. A member agent’s insured borrowed a dealer’s car while her car was being repaired. She had an accident damaging the auto. ISO’s PAP Part D insuring agreement says:

“We will pay for direct and accidental loss to ‘your covered auto’ or any ‘non-owned auto’, including their equipment, minus any applicable deductible shown in the Declarations.”

While ISO’s own policy has an excess Other Insurance clause that may be problematic (see this blog post), her policy was not an ISO form. Her policy says:

“We will pay for direct and accidental loss to your covered auto, including its equipment, minus any applicable deductible shown in the Declarations. Your covered auto does not include any vehicle while used as a temporary substitute for a vehicle you own which is out of normal use because of its breakdown, repair, servicing, loss or destruction.

Notice the policy language differences? There is only physical damage coverage for declared autos, similar to some motorcycle and boat policies. Not providing coverage for nonowned autos is a HUGE coverage gap.

This is something these types of articles never mention because the authors don’t understand it and view auto insurance as a commodity where the only difference is price. So, they focus their entire attention, and that of their readers, on how to reduce that price, regardless of whether the coverage itself might also be impaired. You will find the same kind of irresponsible journalism in many otherwise reputable publications.

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Bill Wilson

Founder at InsuranceCommentary.com
One of the premier insurance educators in America on form, coverage, and technical issues; Founder and director of the Big “I” Virtual University; Retired Assoc. VP of Education and Research from Independent Insurance Agents & Brokers of America. Reprint Request Information

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