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Review of Direct Auto Insurance
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Direct Auto is focused on selling nonstandard auto insurance throughout the Southeastern region, both online and at their 400 storefront locations. This insurer is most appealing to high-risk drivers seeking a viable option for affordable auto insurance.
In April 1991, Direct Auto Insurance became the premier insurance carrier within the Direct General Group. The Nashville, TN auto insurer wasn’t created to compete with large, brand name companies like Allstate or Progressive. Instead Direct Auto was designed to sell basic car insurance for drivers in a financial or legal plight. The carrier currently sells nonstandard auto insurance throughout 12 Southeast states, as well as term life, motorcycle, commercial car, Mexico auto, and renters insurance. High risk drivers that are in a financial pinch or have a spotty driving record, including teen drivers and motorists with SR-22 requirements, will find Direct Auto to be an affordable and sound option.
We must point out this automobile insurance company has no affiliation with another nonstandard auto insurer. Direct Auto Insurance is based in Chicago and only licensed to sell in the state of Illinois. It’s also worth pointing out that Direct General Group isn’t affiliated with another Nashville, TN carrier called The General.
The National Association of Insurance Commissioners (NAIC) provides a useful financial snapshot of the auto insurer. The fiscal overview shows a carrier with plenty of money in their piggy bank. For instance, Direct Auto wrote more than $307 million in direct premium last year. In addition, the carrier reports nearly $205 million in assets, $155 million in liabilities, and $49 million in capital and surplus.
One interesting quirk that appeared in the NAIC data reveals Direct Auto has made significantly less money over the last two years. This is how the carrier’s income breaks down: $21.4 million (2017), $3.7 million (2018), and $1.5 million (2019). On the other hand, Direct Auto’s parent company reports steady income of around $7 million for each of the previous three years.
There are no insurance industry ratings (e.g. AM Best) available for Direct Auto or Direct General. Yet it’s still reassuring that the auto carrier has enough resources on tap to remain solvent and able to pay out all covered claims. This fact should make insurance shoppers more comfortable picking a lesser known carrier. Even though the company is small, they still have enough cash on hand.
Direct Auto Insurance heavily markets being a low-cost carrier, even for high-risk drivers that might not be able to afford mainstream car insurance rates. Direct Auto offers multiple discounts (see below) that can save drivers as much as 25 percent. The carrier also offers low monthly payments, low down payments, and the option to pick your preferred payment due date. In addition, Direct Auto insureds don’t need to have a credit card or checking account to sign up for coverage.
Shoppers can secure a free quote by:
- filling out the online quoting form located on Direct Auto’s website
- visiting one of Direct Auto’s 486 stores located in AL, AK, FL, GA, LA, MS, NC, OH, SC, TN, TX, VA
- phoning 1-877-GO-DIRECT (1-877-463-4732) for assistance
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First, motorists with financial or driving record issues may be particularly pleased with the customer service attention Direct Auto will provide. This auto carrier welcomes risky customers as that’s their bread and butter. So, no reason for drivers in complicated situations to feel uncomfortable or uncertain when approaching Direct Auto for an insurance quote.
This auto insurer advertises a long list of “great” insured services that go above and beyond the standard toll-free phone numbers and online client services. Unique customer service features include things like:
- Texting your payment
- Payment kiosks
- 400 Neighborhood storefronts in all 12 states
- Mobile proof of insurance
We did some digging to determine if Direct Auto can live up to its claims of “great” customer services. The stats tell a somewhat different story. For instance, the annual consumer complaint index results published by NAIC show that many clients are less than satisfied with Direct Auto’s service. The average complaint index of 1.00 and anything higher is alarming. Unfortunately, the auto carrier has earned a far higher complaint index than the average: 2.50 (2019), 3.30 (2018), and 4.09 (2017).
As you can see, during the last year the company earned more than double the standard amount of insured complaints nationwide. Yet there’s a definite downward trend over the last three years which (we hope) hints at continual improvements in Direct Auto’s service levels.
Since 1994 Direct Auto and all its locations have been a Better Business Bureau (BBB) accredited organization. The carrier currently has an “A+” rating. The company’s primary BBB listing shows no consumer reviews or consumer ratings.
J.D Power has not reviewed and scored Direct Auto when it comes to their auto claims satisfaction.
Direct Auto keeps filing claims simple with two main approaches to opening a new property claim day or night, all year long. Customers can submit a new claim either by phoning a toll-free number or completing an online form through their consumer portal.
Beyond that basic information, Direct Auto doesn’t reveal too much in their marketing material regarding claims processing. There are no philosophies or statistics revealed.
Direct Auto clearly has enough money to take care of approved claims. However, upon reviewing the NAIC complaint index reports, it’s clear the majority of insured issues are directly related to Direct Auto’s claims handling. We found the following percentage of all complaints were claims specific: 85% (2019), 76% (2018), and 84% (2017). Of all the claims issues, by far the most frequent customer complaint has been about delays in claims processing. Here are the claims delay stats: 64% (2019). 54% (2018), and 64% (2017).
Of course, it’s worth stating that all insurance companies receive a ton of grievances when it comes to claims. That’s because people tend to not think much about their auto carrier until they need something. If the claims process doesn’t go as expected, there is almost always push back from the insured. Whether the concerns expressed by the clients are valid or not, they must be recorded and addressed. This is something to keep in the back of your mind as you shop for car insurance.
A final note: J.D Power has not reviewed and scored Direct Auto when it comes to their auto claims satisfaction.
All automobile insurers enjoy heralding their many discounts and rewards for good driving. Direct Auto is no different when it comes to discounts. Besides having comparatively low premiums, the insurer also provides twelve discounts which can save you up to 25% on your policy:
- Safe driver discount
- Good student discount
- Military discount
- Multi-vehicle discount
- Multi-policy/bundling discount
- Policy renewal discount
- Homeowner discount
- Discount for low mileage drivers
- Senior citizen discount for motorists aged 55+ and have successfully finished an accident prevention class
- Previous insurance discount for drivers that had auto insurance with their last carrier for a minimum of 6 months with no more than a 90 days lapse
- Affinity discount for active members of certain organizations
- Discount for previous Direct Auto insureds who haven’t had a policy with the carrier within the last 6 months
Policies are customizable so you can buy according to your budget. Motorists may decide to stick with the most basic state minimum liability policy or scale up to a more comprehensive plan.
Here’s the full list of Direct Auto coverage choices:
- Liability which includes Bodily Injury and Property Damage
- Comprehensive & Collision
- Medical Payments
- Personal Injury Protection (PIP)
- Uninsured Motorist
- Rental Reimbursement
- Accidental Death (up to $5,000 maximum)
Emergency Protection Plan is another optional benefit the carrier sells. The purpose of the coverage is to pay for any unforeseen bills resulting from a car accident, as well as provide travel discounts and trip planning services.
Here’s what protections are included in this add-on benefit:
- Accidental Medical Reimbursement up to $1,000 for out-of-pocket medical costs
- Hospital Stay Benefit pays you cash for each day you’re hospitalized after a car crash. You can use the money however you want to like for childcare, rent, or groceries.
- Ambulance Assistance up to $100 cash
- Mechanical First Aid pays you as much as $25 for any minor adjustments or service calls for your car.
- Accidental Death & Dismemberment for covered injuries. This benefit will pay you up to $10,000 to help relieve some financial stress caused by an accident. Or, in case of death, your loved ones will receive the money.
- Auto Rental Reimbursement which works in addition to any rental coverage your primary plan already has.
- Lost Personal Effects coverage pays up to $300 to replace items in your car that are damaged or stolen.
- Trip Planning & Travel Discounts
For nearly thirty years, Direct Auto Insurance has been selling all levels of auto coverage in a dozen Southeastern states. Overall, their marketing of plentiful discounts, reasonable premiums, interesting add-on benefits, and flexible payment options seems to be spot on.
However, Direct Auto does fall short in their customer service, particularly when it comes to claims handling. For high-risk drivers that need auto insurance but don’t want to risk a fly-by-night carrier should feel comfortable checking out Direct Auto. It may not be a five-star carrier, but Direct Auto is financially solvent and accepting of motorists with complicated driving histories that may not be welcomed with open arms by the big-league insurers.