Few years back we watched as Farmers Insurance came onto the scene with the hottest rates on pennsylvania auto insurance we’d seen since Erie Insurance is the late 80’s-and 90’s. Anyone who was willing to take a chance on a fairly inexperienced pa. company was able to save a bundle on their car insurance. Many were never informed about all the percs they were giving up to switch, just hoopla about the great low rates. Then came the reality of business…the company started to see just how expensive the claims were and they hustled to get their first rate increase. Ouch ! Double digits….a few clients started to question their decision to switch. Couldn’t have been six months later…another double digit increase….and again….the mass exodus began. Unfortunately, many people who went back to their original insurance had to give up some of the long term percs and discounts to be back on solid ground.
From the looks of things we’re headed in the same direction in the upcoming year. Half a dozen new companies are entering the state of pennsylvania in the hopes of gaining some market share. So….someone will have to give up some cleints if the new guys are going to get a toe hold on the pennsylvania auto insurance business.
Here’s how I see it going….you want new clients you need to do a few things…low prices, advertising, a good product and give pretty good service. All of these are pretty easy when you don’t have thousands, tens of thousands or hundreds of thousands of existing clients to care for as well. So…in the beginning if will be pretty easy to give the great service. What about later ? Hmmm….only time will tell that story. From past experience, I’ve seen a dozen companies like Farmers come in to Pa with “guns ablazing” only to fizzle out within a few short years. Meanwhile, many good customers will fall prey to artifically low prices that are designed “primarily”to draw them in. If history repeats itself once again…the prices will promptly rise to levels that are no longer competitive.
So…be careful out there..do your homework or get an agent you can trust to do your homework for you.