JODIE FAWL / Lincoln Journal Star | Posted: Saturday, March 11, 2006 6:00 pm
A new approach to motor vehicle insurance sales, providing customers with a larger selection of benefits, has begun in Nebraska.
Your Choice Auto policies offered by Allstate Fire and Casualty Insurance are designed to encourage safe driving and offers new rewards to consumers who drive safely and do not have accidents, said Jeff Kaufman, field vice president for Allstate’s West Central Region.
The policies offer a variety of options and choices for the insured driver.
“It is a unique plan,” said Bruce Ramge, chief of market regulation for the Nebraska Department of Insurance. “In and of themselves the features are not unheard of, but combining so many different options for customers to choose from is new.”
Allstate developed the policies because of research that showed nearly 9 out of 10 people would buy policies that immediately reward safe driving through reductions or credits to their deductibles, Kaufman said.
Research also showed eight out of 10 people buying auto insurance would pay more money for a policy that protected against higher premiums imposed because of accidents, regardless of fault, he said.
Sales of the new policies began last year in Tennessee, Texas, Oregon and Wyoming.
Allstate introduced the new policies in Wyoming in October 2005 and consumer reaction has been positive with an increase in sales of 10 percent, said Kaufman.
Allstate’s new plan has four levels:
n The value plan, which is least expensive, includes the basic coverage required by law. Cost for the value plan is 5 percent lower than the standard policy, Allstate said.
n The standard policy, which, after five years of driving without an accident exempts the insured driver from any surcharge to the premium if the insured driver should have one accident.
n The gold policy allows immediately for one accident with no surcharge and includes a safe-driving reward that reduces the deductible by $100 for each year without an accident, up to $500. It costs 7 percent more than the standard policy, Allstate said.
n The platinum policy includes the features of the gold policy and waives higher premiums even for multiple accidents. It also has a safe driving reward of up to 5 percent on renewed premiums after six months. The platinum policy costs 15 percent more than the standard.
In the first week of Nebraska sales 80 percent of new policies sold were platinum, gold or value policies with the majority being gold and platinum, said Emily Pukala of Allstate corporate relations.
“Policies are now being sold on the benefits offered rather than the price,” Pukala said. “People are buying the benefits. They are willing to pay more for more coverage.”
One part of the Allstate plan—new car replacement— is a new option, Ramge said. If a new car gets totaled within its first three years Allstate will give customers who buy that option a check for the car’s replacement value, not its depreciated value.
Allstate is the ninth largest provider of auto insurance in Nebraska with more than $21 million in total premiums sold in 2004, according to Ramge. Total premiums in the state are roughly $1.24 billion for private passenger automobiles.
State Farm Mutual Insurance Co. is the largest provider of auto insurance for private passenger auto with 9.5 percent of the business in Nebraska or $118 million in premiums in 2004, Ramge said.
State Farm offers accident-free discounts and other rewards for safe driving and keeps premiums low to benefit its customers, she said.
“We are always focusing on the needs of the customer,” said Colleen Ozan of State Farm public relations.
Reach Jodie Fawl at 473-7235 or jfawl@
New auto policies offer variety, choices
By Jodie Fawl
Lincoln Journal Star
A new approach to motor vehicle insurance sales, providing customers with a larger selection of benefits, has begun in Nebraska.
Your Choice Auto policies offered by Allstate Fire and Casualty Insurance are designed to encourage safe driving and offers new rewards to consumers who drive safely and do not have accidents, said Jeff Kaufman, field vice president for Allstate’s West Central Region.
The policies offer a variety of options and choices for the insured driver.
“It is a unique plan,” said Bruce Ramge, chief of market regulation for the Nebraska Department of Insurance. “In and of themselves the features are not unheard of, but combining so many different options for customers to choose from is new.”
Allstate developed the policies because of research that showed nearly 9 out of 10 people would buy policies that immediately reward safe driving through reductions or credits to their deductibles, Kaufman said.
Research also showed eight out of 10 people buying auto insurance would pay more money for a policy that protected against higher premiums imposed because of accidents, regardless of fault, he said.
Sales of the new policies began last year in Tennessee, Texas, Oregon and Wyoming.
Allstate introduced the new policies in Wyoming in October 2005 and consumer reaction has been positive with an increase in sales of 10 percent, said Kaufman.
Allstate’s new plan has four levels:
n The value plan, which is least expensive, includes the basic coverage required by law. Cost for the value plan is 5 percent lower than the standard policy, Allstate said.
n The standard policy, which, after five years of driving without an accident exempts the insured driver from any surcharge to the premium if the insured driver should have one accident.
n The gold policy allows immediately for one accident with no surcharge and includes a safe-driving reward that reduces the deductible by $100 for each year without an accident, up to $500. It costs 7 percent more than the standard policy, Allstate said.
n The platinum policy includes the features of the gold policy and waives higher premiums even for multiple accidents. It also has a safe driving reward of up to 5 percent on renewed premiums after six months. The platinum policy costs 15 percent more than the standard.
In the first week of Nebraska sales 80 percent of new policies sold were platinum, gold or value policies with the majority being gold and platinum, said Emily Pukala of Allstate corporate relations.
“Policies are now being sold on the benefits offered rather than the price,” Pukala said. “People are buying the benefits. They are willing to pay more for more coverage.”
One part of the Allstate plan—new car replacement— is a new option, Ramge said. If a new car gets totaled within its first three years Allstate will give customers who buy that option a check for the car’s replacement value, not its depreciated value.
Allstate is the ninth largest provider of auto insurance in Nebraska with more than $21 million in total premiums sold in 2004, according to Ramge. Total premiums in the state are roughly $1.24 billion for private passenger automobiles.
State Farm Mutual Insurance Co. is the largest provider of auto insurance for private passenger auto with 9.5 percent of the business in Nebraska or $118 million in premiums in 2004, Ramge said.
State Farm offers accident-free discounts and other rewards for safe driving and keeps premiums low to benefit its customers, she said.
“We are always focusing on the needs of the customer,” said Colleen Ozan of State Farm public relations.
Reach Jodie Fawl at 473-7235 or jfawl@journalstar.com.