Tips for Choosing New Auto Insurance Companies
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UPDATED: Jul 8, 2021
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There are multiple reasons why you may need to choose a new auto insurance company and it can seem like a daunting task. There are more companies that offer car insurance than ever before, from very small local companies to large national ones.
This helps to keep rates competitive but it also makes your decision that much harder.
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There is much more to choosing a provider for car insurance than price alone. It may be tempting to choose the first company that offers the lowest rate but you should check out more things about the company first.
If you make the right choice the first time around, then you hopefully will stay with the company for a long time and won’t have to go through the process to find a different one again.
Reasons to Choose a New Insurance Company
Ideally, you would never have to choose a new auto insurance company, but there are times that it is necessary. The obvious reason is because you are a new driver and need to get insurance coverage for the first time.
If you are a teenager, there is a good chance that you will just be added to your parents’ policy, which would be cheaper than getting your own policy.
Once you are no longer eligible to be insured under your parents’ policy you will need to branch out and get your own policy. You may choose the same company as your parents or you may want to be independent and choose a whole new provider.
If you have had a bad experience with your current insurance provider, this is a good reason to search for a new one. This could be due to high rates, bad or non-existent customer service, or unsatisfactory claims processing.
Not every insurance company insures in all state, so if you move to another part of the country you may need to find a new provider with which to insure your vehicles.
Even if you stay with the same company, the rules and regulations vary according to the state in which you reside so the details and rate of your policy would more than likely change.
Another reason why you may need to find a new insurance provider is if your renewal was denied or if your policy was cancelled by your current provider.
This is usually due to missed premium payments or a serious traffic violation such as a DUI.
Use the Internet
The Internet makes everything easy and convenient, and searching for a new insurance company is no exception. The Web is a great source, not only to find a new provider, but also to research the companies and learn more about insurance in general.
If you have an idea of which insurance company you want to use you can visit their individual website.
Most insurance websites include information about the type of car insurance products offered, as well as the ability to get a free quote to get an idea of what your premium would be.
If you are open as to which insurance company to go with, a quicker way than visiting multiple individual websites is to go to a website that offers you multiple rate quotes. At the end of this article you will have the ability to try it out.
All you have to do is take a little bit of time to fill out the questionnaire with the personal information needed to get an accurate quote.
You will then have access to quotes from a number of different companies. A lot of drivers would just compare the different rates and choose the cheapest one, but this is not the smartest way to choose an auto insurance company.
In order to select the best company for your needs, you should spend a little more time and find out more about each provider.
Use an Insurance Broker
Another alternative to using the Internet is to use an individual known as a car insurance broker. A broker is independent from any particular company, so his or her intentions are more focused on what you want and need.
A broker also has access to a number of different providers, such as the third-party rate quote site has. This allows you more flexibility when trying to find the best policy.
A broker is good to use when you want a more personal connection, have more complicated insurance needs, or would like more options.
Working with a broker is also a good idea when you don’t understand much about insurance, such as the coverage types and the different terms. The Insurance Information Institute is also a good source for this type of information.
Ensure the Company Is Registered in Your State
It may seem unnecessary, but it is worth taking the time to make sure the companies you are deciding among are registered and licensed to sell car insurance in your state.
It is rare, but there have been instances in which a company has collected premiums from drivers in a particular state and then refused to pay out claims because they were not able to deal insurance in that area.
It is a fraudulent scam that you want to make sure to avoid.
One way to find out if the company is licensed is to contact your state insurance department. Their contact information can be found on the National Association of Insurance Commissioner’s website.
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Compare Customer Service
If you don’t need to contact the company or speak with your agent, customer service may not seem like a big issue. However, when you do need to communicate with them, you want to make sure they are readily available.
That’s why the rating of a company in regard to customer service is important.
One place to see how companies rate in terms of customer service is the website for J.D. Power and Associates.
This site takes feedback from consumers and posts their ratings of different insurance companies. Their ratings are grouped according to different categories, and customer service is one of them.
Compare Claims Process
Another area that J.D. Power submits results for is the claims process by an insurance company. Getting claims paid is one of the biggest reasons why drivers purchase car insurance, so it is imperative that companies follow through and pay for what is deserved.
Not only do you want your claims to be paid fairly, you also want it done in a timely manner. Also check if the insurance company is open to you using your own repair shop or if they’re pushing you to use one of theirs.
Some insurance companies will use certain shops that may use older parts or skimp on another part of the repair process.
Check to see what each company’s policy is about rental cars when your car is being repaired or you are waiting for a replacement.
The insurance department of your state is another source to find out about any complaints about claims, as is your local Better Business Bureau.
Compare Financial Stability
Another big thing to look at when you are searching for a new car insurance company is how they stack up financially. You should choose a company that rates high, as in A- or better, and you should choose one that has a stable or positive future outlook.
This will give you a pretty good idea that the company will be sticking around for a long time and that there is enough money to pay for existing claims and those in the future. A.M. Best is a good resource to find this information.
If you need to look for a new auto insurance company because you have been dropped by your current provider due to the fact that you are considered to be a high-risk driver, your options will be fewer than for other drivers.
There is a pretty good chance that other insurance providers will turn you down for coverage because of the high risk as well.
Fortunately, because of the requirements that every driver must carry car insurance, you have to be able to get a policy somewhere.
There are some insurance companies that specialize in insuring high-risk drivers. You can find these by doing a general Internet search. Be prepared to pay a very high premium for the coverage you receive.
If even the high-risk insurance providers refuse to insure you, the government is your next, and probably last, place to go.
State governments offer insurance coverage to those who can’t get it elsewhere.
In many cases the only coverage you will be able to get, however, is the basic state minimum coverage. You will usually not have the option to purchase additional coverage such as uninsured motorist, collision, comprehensive, or medical payment coverage.
The good news for most high-risk drivers is that traffic violations do not stay on your record forever. In most instances they will be cleared in three years. DUIs take longer to be expunged and it depends on the state.
Some are cleared off your record in seven years, while other states mandate that they are kept on your driving record indefinitely.
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