Why can't insurance companies sell insurance in all 50 states? This is probably going to be the one question that many citizens have been asking thems
Why can’t insurance companies sell insurance in all 50 states? This is probably going to be the one question that many citizens have been asking themselves this entire time we’ve been in a state of free enterprise. The simple truth is that insurance companies can only do business in certain states. Each state has different rules, and these rules change from year to year. As an example, there are a lot of states where people buy their cars from another state, and yet the insurance underwriting rules are very different in those states.
Some companies do a great deal of business in some states and a very small percentage in other states. For instance, let’s say that you live in Massachusetts, but you bought your car in Florida. Under the insurance company rules, you’re allowed to drive your car into Florida, however, you can’t sell it there. The same goes for homeowners, who can’t sell a house in Arizona. The insurance company would deem your home as a liability, and therefore, wouldn’t issue you a policy in that state.
That’s just one example of the complications that arise when you try to sell insurance. The trouble is compounded if you have multiple vehicles insured through the same insurance company. Say you have two cars insured through the same insurance company -one in Texas, one in Connecticut. Well, those companies have to take care of their respective laws, and it means that they aren’t going to sell insurance policies in both states. If they did sell insurance in both states, and you got in an accident in one, you probably wouldn’t be covered, as you’d be outside of your company’s rules.
Why Can’t Insurance Companies Sell Insurance in All 50 States?
The best way around this problem is to go about it differently. One thing to do is to contact a broker. The broker makes the sales calls in each state that the company serves, and he can help you find out which company will cover your vehicle in the state you are currently in. Once you know that, you’ll be able to go to the company’s website and purchase your insurance online from the comfort of your own home. It’s convenient, easy, and it saves you money! Just think about it.
You might also be wondering why a sales agent would be the person who will be calling states from coast to coast. Doesn’t each state have its own sales agent? No, but it’s pretty easy to find a sales agent. Most auto insurance companies have an insurance representative or a department of brokers in every state. They do quite a bit of business, so they are likely to have people within the area who are trained to deal with your specific needs.
The second problem you’re likely to encounter is that many insurance companies won’t sell to people in your neighborhood. Why would you want to drive two hours to the next town over to purchase your auto insurance? There are plenty of other towns within your state to choose from, and you don’t need to be pushed into buying insurance in a town where you’ve never been before. If you’re getting ready to buy auto insurance in Illinois, for example, you’ll probably want to take the time to search for local insurance companies.
In some cases, you may even want to call a few different insurance companies to ask about pricing, or terms, or even just for recommendations. But let’s face it; there’s no reason why insurance companies should sell their policies in your state if they can’t get away with it! Letting companies sell policies in your state doesn’t encourage them to continue doing business in your area, and it makes no sense at all.
Some may argue that since insurance companies already have sales representatives in various states, it makes sense that they wouldn’t try to do business across state lines anyway. That’s completely backward! Why would any company sell insurance in your state, if it didn’t have a sales representative in it who can help you get started? It makes no sense at all! You shouldn’t have to pay more for your car insurance if it doesn’t make financial sense.