Is Allstate Insurance expensive? Does Allstate home & auto insurance cost a lot more than other companies, like State Farm, Progressive, or GEICO? Are insurance companies with lower rates than Allstate selling “cut-rate” insurance, inferior to Allstate? As a former sales person for an Allstate agency, I’ll tell you what you need to know about Allstate’s pricing, and how you really can save a lot of money on your auto or home insurance.
Is Allstate Insurance Expensive, Like Many People Say?
When I started training at the Allstate field office, one of the first things the trainer wanted to dispel, was the “myth” that Allstate does not have competitive rates. It’s not a good sign when a company has so much of a reputation for high rates, it has to be addressed in training. For a lot of people, Allstate does charge a lot more than many other competitors for the same coverage. However, if you fall into the category of Allstate’s target market: clean driving record, great credit, no claims, continuous prior insurance coverage for the most recent 5 years (preferably with the same company), married, multi-car, home owner, and you live in the right zip code, Allstate may have very competitive rates for you. In this way, Allstate is similar to most insurance companies, where they have great rates for some people, and terrible rates for others.
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When customers called about large rate increases, I was trained to explain Allstate’s commitment to charge adequate rates to pay claims fairly and promptly, implying companies costing less may not be sufficiently funded to pay claims. Allstate’s advertising also warns of “cut-rate’ insurance not covering you as well as Allstate. This is largely marketing hype. Most insurance companies offer coverage similar (or better) coverage options as Allstate, so as long as you are getting a price quote for the same coverage, companies with lower rates are not providing inferior coverage. Many of these companies will have complaint records and customer/claims satisfaction the same or better than Allstate. Simply paying more for the same coverage with a well-known brand does not mean better service.
Unlike mutual companies, like State Farm, American Family, & Nationwide, Allstate has stockholders. Allstate stockholders are used to being paid regular, increasing dividends, and rewarded with a higher stock price over time, pressuring rates to be higher, to create greater profits. Mutual insurance companies, owned by their policyholders, don’t always have lower rates, and insurance companies with stockholders don’t always have higher rates. Consumers should shop for the best combination of coverage, rates, & service with all companies, to find the best deal. But Allstate’s need for higher profits to please stockholders, is often reflected in its rates & frequent rate increases.