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How To Choose the Best Car Insurance Company

Setting your priorities, checking reputations and financial standings, comparing quotes—shopping for the best car insurance company for your needs might seem daunting unless you tackle the process one step at a time.

Know What You Want

Understand what coverages and amenities you're looking for in a car insurance company. Are you solely looking for cheap auto insurance? How might choosing the cheapest option affect your actual coverage? What about customer service—that's important, too, right?

Know your priorities before you begin looking to buy car insurance. Ideally, you'll want a company that offers great coverage at an affordable price from customer service-oriented agents.

Check for Reputation and Financial Standing

Once you've found a few seemingly compatible car insurance companies, do some investigative work and check out the companies' reputation and financial standing.

  • First, check with your state’s Department of Insurance website and make sure the company is licensed to sell auto insurance in your state.
    • Also, take a look at complaint ratios, if available.
  • Then, look at the companies' financial standing on reputable websites such as J.D. Power and A.M. Best.
    • Auto insurance is a two-way street: you pay for the coverage and your company provides the coverage. You need to make sure your company can pay your damages when required.
  • Finally, find out how the companies stand with the Better Business Bureau (BBB).
    • The BBB ranks companies from A+ to F, and gives you a multitude of information about those companies, such as the length of time they have been in operation and information about customer complaints (including resolutions).

Compare Car Insurance Quotes

Consider these tips when comparing auto insurance quotes:

  • First and foremost, never look at just one or two car insurance companies; always get and compare at least three quotes.
  • Talk with family members and friends about their car insurance providers.
    • How long have they been with the company?
    • Are they satisfied with their rates?
    • What about customer service? How has the provider handled their premiums in the events of traffic violations, at-fault accidents, and other common premium-increasing situations?
  • Look for auto insurance companies that offer discounts and good-driver rewards programs.
    • Some companies provide breaks for drivers of certain ages or for drivers with anti-theft devices.
    • Others offer rewards (e.g. lower premiums) for drivers with consistently good driving records.
  • Ask about bundling insurance policies.
    • Also known as “multi-line coverage," some companies provide discounts for purchasing two or more lines of coverage (such as car insurance and homeowner insurance).
  • Check out the companies' social media accounts.
    • Reach out to your potential insurance companies on platforms such as Facebook and Twitter and evaluate how they respond to your questions about issues such as coverage and discounts.

Remember, comparing car insurance quotes is never just about what's cheapest.

Periodically Evaluate Your Coverage

Getting great car insurance coverage at an affordable rate is fantastic, but don't get complacent. Many companies decrease premiums for certain life events, such as:

  • Buying a new car. You might get lower rates if you purchase a new vehicle with great safety and anti-theft features.
  • Moving. Living in low-crime areas tends to get you lower premiums.
  • Getting older. Mature drivers (generally those who are 25 and older) often benefit from lower car insurance rates.
  • Getting married. Combining two insurance policies into one can save you money. Married drivers are also viewed as more responsible and often see lower rates.
  • Purchasing a new home. Remember multi-line insurance? You could get a discount if you insure your home with the same company.

Of course, some life events can increase your rates—which means you'll want to talk with your agent about ways to decrease them or even start comparing quotes from other providers. Such situations include:

  • Moving. Again, moving can affect your car insurance rates, and in this case moving from a low-crime area to one with a higher crime or accident rate might cost you.
  • Filing claims. Each claim you file can increase your rates—especially claims for at-fault accidents. Talk with your agent about ways to decrease rates or avoid rate hikes, or consider shopping for another provider.
  • Traffic violations. Similar to filing claims, the more traffic violations and driving points you accumulate, the higher your premium could become.
  • Adding a teenager to your policy. Often, increased rates when adding a teenager to your policy are unavoidable; however, if you feel the premium has become too high, talk with your agent about ways to decrease it (such as teen driving courses) or start looking at other companies.

Simply put, whenever you experience a life event that might decrease or increase your rates, it's time to evaluate your coverage and perhaps even start comparing quotes from other providers.

Consider Working with an Agent or Broker

The difference between car insurance agents and car insurance brokers is that, generally, agents work with one company while brokers work with several companies.

So, while an agent can help you get the best coverage and rates from his or her particular company, a broker can shop around and help you find the best coverage and rates from a number of companies. Keep in mind, however, they may charge you a broker fee.

Unless you feel comfortable shopping around on your own or have your heart set on one company, you might want to consider consulting an agent or broker about your car insurance needs.

Amanda Lautieri Portrait

Reviewed By:

Amanda Lautieri Limited Lines Auto Agent