Comparing the Cheapest Auto Insurance Companies
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UPDATED: Apr 12, 2020
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When drivers search for auto insurance companies, they often tend to lean towards the companies that offer the cheapest rates.
Although this is not a terrible plan, the important thing that you need to do is compare the companies in order to choose the best provider for your car and passengers.
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Not all car insurance companies are the same, even though it may seem like it on the surface. Some offer more than others and some are less reputable. It is important to compare these providers before making a decision.
Price is important, but it is not the only reason to choose a company.
How to Find the Cheapest Auto Insurance Companies
There are many insurance companies that would love to help you with your car insurance needs. Because of this competition, some of these companies are willing to offer you lower insurance rates in order to get your business.
To find these companies, there are a few routes that you can take.
One way that is a bit more personal, but will take more time, is to stop in to some of your local insurance offices, or contact them by phone.
You will meet an agent who can talk with you about your insurance needs.
After getting some key information, you will be given a quote. Once you visit a few offices, you can begin to compare the companies based on price as well as other factors.
You can do the same thing on the Internet, which will be a bit of a timesaver. Most insurance companies offer you the opportunity to get a quote online. This way you don’t have to speak with anyone or sit down with them face to face.
The fastest way to find cheap auto insurance companies is by going to a website that lets you enter your information only once in order to get quotes from many car insurance companies.
This type of free quote site is not an insurance company itself, but it is able to give you access to the insurance companies affiliated with it. This website is one of these types of sites.
No matter which way you choose to get car insurance quotes, you should get at least three. Once you have these, it may be tempting to just choose the cheapest one. However, you’d be smarter to compare them across other criteria, and not just on price.
Obviously, price is the first thing that you notice in a quote. Because most insurance companies use similar factors to figure out your rate, you may find that the quotes you receive are similar.
If this is the case, it may make your choice even more difficult. This is where digging a little deeper comes into play.
Compare Coverage Types
Although you will have the opportunity later in the process to choose which types of coverage to have on your policy, make sure that the coverage you’re considering is included in the quote you receive.
There are a number of coverages that you can have on your policy and each one is priced separately.
If you see a general quote from a company that seems too good to be true, it may be just for basic insurance. Basic usually refers to the minimum coverage that is required by your state.
In the majority of states, this is liability coverage for both property and bodily injury.
If this is why your quote is so low, you may want to consider additional coverage, which will increase the premium.
You should have a good idea of what the basic insurance coverage types are, including collision, comprehensive, uninsured motorist, and medical payments. Knowing what each type will help cover, and what the deductibles are, will help you decide if they are needed or not.
If you have a newer vehicle or one that is currently financed, comprehensive and collision coverages are a good idea. However, if you are driving an older car, it is paid off, and the value of the car is close to your deductible, carrying these two kinds of coverage would simply be a waste of money.
Go to Kelley Blue Book to find out the market value of your vehicle.
When comparing multiple quotes, make sure the coverages are the same for all of them. If they are, there are additional things that you need to check on before making a decision.
Compare the Financials
Most insurance companies are rated financially by independent companies, and car insurance providers are no exception. There are a number of independent companies that look at financial aspects of insurance companies and report on the results.
According to Moody’s, most of the companies will take a universal approach when it comes to analyzing the financial risk of a company.
They rate insurance companies according to current factors, as well as what may happen in the future. Although the company’s rating is a good indication of how stable the company is, it is not a guarantee of how the company will continue to perform.
That being said, it is always a good idea to choose a company that has a great-to-excellent rating, which is considered to range from “A-” to “A++.” One site you can visit to see a car insurance company’s rating is Standard and Poor’s.
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Choosing a company that is reputable is important if you would like to stay with the same company for a long time. You want to choose one that does not have complaints against it and that has a good reputation across the board.
You can find a lot about how a company operates in terms of customer service by asking around. If you have friends or family members who use one of the companies you are comparing, ask what their experience has been.
You can also check on a company’s complaint status a couple of ways. One is through the insurance department in your state. It will usually have reports of any complaints against insurance companies and it may be able to give you some advice if you are unsure how to proceed or which company to choose.
The Better Business Bureau is another good source.
It will list complaints for an insurance company, whether or not it is accredited through the BBB. It also breaks down the complaints so that you know for what reason the complaints were filed by customers.
The complaint types could include sales/advertising, service or product problems, collection/billing issues, warranty and guarantee issues, and delivery issues.
Compare Claims Processing
The manner in which a business handles claims is another big factor when comparing different car insurance companies. The whole point in paying car insurance premiums is for the company to help cover damages and expenses related to an accident or other incident.
You want to make sure you choose a company that not only pays fairly for claims, but also handles the process efficiently.
According to the Insurance Research Council, costs for medical care after a car accident continue to increase. As a result, insurance companies will often try to save money out of their own pocket in a couple of different ways.
Sometimes they will negotiate with the hospitals or doctors to get them to lower the fees, and other times they will ask you to take a smaller settlement. When you are offered a settlement for a claim, you should not necessarily accept the first offer.
Don’t just take into account the price of your medical bills or what it costs to repair or replace your car. If you had to rent a car, depend on others for rides, or take public transportation in the interim, include those costs in the settlement.
Also include any missed days of work or other financial sacrifices you may have had to make.
Once you have that figure, compare it to the settlement figure offered by your insurance company.
If it is a larger sum of money, get with your insurance company and make a counteroffer. If the company is fair, you should be able to get the correct amount for your settlement. The claims adjuster should also be easy to reach.
Some insurance companies make it easy to file a claim online or have a 24-hour, toll-free number to call. Try to choose a company that offers these, as well as the ability to check on your claim status conveniently online or via telephone.
Because these are things you wouldn’t necessarily find out until you actually have a policy, you will have to depend on other sources for this information. Your state insurance department can be a good resource when it comes to the claim process.
J. D. Power and Associates is another good source. This company rates insurance companies based on consumer reviews. Each car insurance company is rated on a number of categories, including claims.
In fact, the J.D. Power and Associates website has a specific area that rates particular claims-related topics.
There are a lot of things to look for when it comes to comparing and choosing a car insurance company. Taking the time to do the required research and picking a company based on more than just price will pay off for you and your wallet.
Start your comparison of cheap car insurance companies right now by placing your ZIP code into the FREE box provided!