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I came across a FB comment from someone who works at a body shop, saying that budget insurance companies often total your car if the damage is over $1500. On top of that, they said these companies usually underpay by about $3000 to $6000. Even though another person argued against this, it made me really cautious about choosing a company that’s all about being the cheapest. It just doesn’t seem like the kind of risk I’d want to take.
I saw an ad for Otto claiming I could get insurance for as low as $35 a month. My current insurance is around $180. I figured it was worth a shot, but after entering my details, I was connected with a bunch of different agents. None of them could even come close to $35. The cheapest offer was around $160, and the agent admitted that the “$35” rate is for people with the absolute minimum coverage, perfect driving records, and other very specific circumstances that hardly anyone meets.
Someone I know clicked on an Otto ad that looked very similar to the T-Mobile app. They thought they were on the T-Mobile website and entered their information. Within minutes, their phone started ringing non-stop with insurance agents. They were paying $250 a month before, and after all the calls, the best quote they found was $235, hardly a significant saving, and they regretted giving their information out so freely.
I work in a body shop, and we often see customers with various insurance providers. While I don’t have direct insight into their initial savings, I can say that we’ve definitely seen some of these “budget” insurance companies, including those you might find through a service like Otto, try to appraise vehicles $1000-$5000 lower than their actual value when there’s an accident. So, even if someone initially saved a bit on premiums, they might lose much more if they ever have to file a claim.
Before I learned what Otto really was, I considered using them to compare my current insurance cost of $150 a month. However, after reading online reviews and seeing that they primarily sell your information, I decided against it. The risk of getting bombarded with spam calls and emails, without any guarantee of actually finding a better rate or a reliable insurance company, just wasn’t worth the potential small saving. I’d rather stick with a reputable company even if it costs slightly more.
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