What to Know about Various Car Insurance Company Types

When you are looking for various premium quotes from different car insurance companies, you usually end up with numerous options. Those quotes may be different because of various factors; one of them is the type of the insurance company. Despite selling similar services and packages, insurance companies come in different forms and business methods. Knowing about different types of car insurance companies based on how they do business will help you choosing the best policy package that suits your needs.

Car Insurance Company Types You Need to Know

How good is your general knowledge about car insurance companies and their works? Here are several car insurance types you should know about:

Admitted carriers.

This is a term for standard insurance lines, which operate under specific license in particular areas or states. These companies set their premium rates based on rate standard established by official board of insurance or similar institution in the country. These companies are subject to laws, regulations and restrictions applied by the state government. Another common trait is that these companies usually contribute to guarantee fund program, which ensures that the customers get their money back when something happens to the company.

Surplus lines.

Also known as “excess lines,” this is the type of insurance company that deals with high-risk customers. Typical customers for such insurance companies include drivers who have earned a lot of speeding tickets, people who have repeated traffic violation histories, and companies that just start and cannot get proper coverage because the risk is deemed too high. This is especially important if you are considered a high-risk driver, but have difficulties obtaining coverage because general admitted carriers refuse to sell you policy.

Direct-selling insurance carriers.

Unlike traditional insurance carriers, direct-selling carriers conduct their business by directly selling policies to individuals and immediately contacting the customers, whether online or through local representative agencies. The options for customers are directly communicating with the company or using independent car insurance agent that offers quotes from this insurance carrier. While this may sound worrying, there are numbers of direct-selling insurance carriers that grow into successful, reputable companies; one of them is GEICO in North America.

Domestic carrier.

As the name suggests, domestic carrier is only licensed to operate in its respective state, but not other state. If the company opens new branch outside its respective state, it will be recognized as “alien” insurance carrier. This doesn’t mean that the insurance company is illegal; it only means that the customers in the state must also subject to regulations of the company’s respective state.

Alien insurance carrier.

As mentioned in the previous point, alien insurance carrier opens its branch in different state or country, but it observes the law and regulation of its respective state/country. For example, if an American insurance company opens a branch in Indonesia, but observes the law and regulation of its home country, this insurance company is considered alien carrier. The customer in Indonesia is therefore subjected to law and regulation applies in the US.

Captive insurance carrier.

This is a specific insurance carrier formed by specific industry, such as business fleet or shipping. This kind of insurance carrier is available because standard carriers can’t always provide sufficient coverage for specific activities like business shipping. For example, if a courier business with large fleet cannot get sufficient coverage for its activities, it will provide its own insurance.

Specialist insurance.

You probably often hear news about famous people who insure specific parts of their bodies that become their assets. This kind of coverage is provided by insurance carrier called specialist insurance. Such carrier, such as Lloyds that has various branches around the world, offers highly specialized coverage that general insurance carriers may not be able to cover. Examples are insurance for energy offshore properties, cyber technology, large cargo, dangerous chemical transport, and many more.

By knowing different types of car insurance companies, you will understand their specific services. You can also tell the difference between various car insurance quotes based on the carrier types, and able to choose the ones that suit your needs the most.

Car insurance companies may offer specific services depend on their types and specifications. If you look for insurance quotes with generic search terms, you probably end up with various quotes that seem to be too far-fetched between each other in amount. This is probably because you get insurance quotes from companies with specific services. Knowing various car insurance types will help you determining the best option for your own coverage needs.