Are mutual insurance companies the credit unions of the insurance world?

November 6, 2012 10:03 AM

Are mutual insurance companies any more consumer friendly than other insurance companies? Are their rates better or do they have a reputation for honest claim handling? I regularly hear that credit unions are a good alternative to banks because they have good rates and consumer-friendly policies, but haven't heard the same thing about mutual insurance companies.

I'm from the US, but am interested in hearing about companies in other countries as well. I know that USAA in the US does have a good reputation (my wife and I are allowed to buy from them because her father was once in the US National Health Service, which is odd but great), but haven't heard anything positive about mutual insurance companies in general.

posted by Area Man to Work & Money (4 answers total)

In theory, some people will say that mutual insurance companies are better because they're owned by the policyholders and therefore their sole incentive is to serve the policyholders better, not to generate a profit for shareholders.

In practice, when it comes to customer satisfaction, there are some insurance companies which are kind of bad, a huge group that are pretty much indistinguishable in the middle, and then USAA, which scores so highly that it's often excluded from analyses and charts in the industry because it skews the numbers so severely.

I used to work for one of the indistinguishably middling companies (a mutual), and internally the attitude is "Let's be the best we can... knowing that we will never even come close to being as great as USAA."
posted by telegraph at 10:33 AM on November 6, 2012

I started out with State Farm Insurance and after being with them for years was invited into the Mutual part of it. I'm nearly 50, so I think my rates are pretty great.

As for a testimonial, State Farm has treated me great every time I've had to file a claim.

Progressive is also excellent.

What I find is take a poll among your friends, see who they like, then get quotes and go with the quote that suits you the best.

Your agent can make the difference between having a good insurance experience or a bad one. Don't underestimate that part of the relationship.
posted by Ruthless Bunny at 11:48 AM on November 6, 2012

Nationwide is a mutual. Their rates aren't exactly the best, but I've never had a problem with their claim handling. I have been looking elsewhere for home owner's coverage, though, as Nationwide recently decided to start dinging me because I am serviced by a volunteer fire department.

I also have huge problem with them sponsoring a NASCAR series. Seems like a huge unnecessary expense.
posted by Thorzdad at 1:30 PM on November 6, 2012

Seconding Ruthless Bunny- in my experience (as a third-party insurance administrator), it's all about the relationship between you and your agent or you and the third-party administrator. At my old job I was able to provide personalized service to policyholders. The insurance company they bought the policy from might not have the greatest administration for their particular type of policy. With luck, you can find a person like me who will advocate for you. I'm not going to say that there's no company that stands out by reputation- maybe there is, I'm just not aware of which one it would be. The companies that can offer the "best" insurance are going to be the biggest, which means they have to deal with a large volume of calls/service requests. (By best insurance I mean good rates and a financially stable company) So if you don't have that relationship with an agent and you're contacting the company directly, you're probably going to deal with random person in a call center.
posted by Secretariat at 9:51 PM on November 6, 2012