Jessica Sautter is a Content Writer for CarInsuranceCompanies.com with a Bachelor’s Degree from Eastern Michigan University in Elementary Education with a Major in Reading and a Minor in Mathematics.

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager

UPDATED: Feb 11, 2021

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Key Takeaways

  • Learn about what policy coverage you have
  • It’s extremely important to view your credit report before applying for car insurance
  • Go over each car insurance company carefully before choosing

No matter where you live, every car insurance company loves to advertise.

Whether it’s the promise of cheap car insurance or a celebrity spokesperson claiming how he saved hundreds of dollars a year by switching providers it’s hard not to resist the temptation of wanting to compare car insurance companies.

Since every car insurance provider spends a great deal of money and effort to differentiate itself from all competitors, conducting an accurate comparison can seem daunting if not impossible.

Car insurance comparison between different companies should be done with care as what determines how strong of a policy you have will always be in the details of coverage and never your premiums.

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Premiums Do Not Dictate The Policy

The strange thing is no matter how consumers will always compare car insurance policies by premiums and car insurance companies know this but if you really want to find best protection for you and your family use these steps

Even just a minor difference in a car insurance application can cause a big difference in your rates so it’s extremely important you write down all the important data before contacting anyone – including your current car insurance company.

The main data will be:

  • Your Age
  • How long you have had your license
  • Your drivers’ license
  • The make and model of the car
  • How you will use the car
  • Estimated annual usage
  • Number of household drivers
  • Car Insurance Discounts

Read this section and start listing the car insurance discounts you / your vehicle have such as:

  • Safety Features
  • Anti-Theft Systems
  • Multi-Policy Discounts
  • Multi-Vehicle Discounts

Car insurance discounts are not just related to the vehicle but also to you as a driver so don’t forget to note any drivers education courses you have done – even though most car insurance companies rarely use these for discounts unless you are a young driver under the age of 25.

Some types of vehicles such as commercial trucks, classic cars, and exotic automobiles will require more questions such as the nature of the business, where the car is stored, but for most passenger vehicles the above is a good list of some of the most important data points.

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What about my credit report?

It’s extremely important to view your credit report before applying for car insurance so you understand what is there and have time to fix any incorrect items.

We do recommend purchasing your credit score, however, car insurance companies can not just plug in your credit score to get a quote.

Most will need to pull their own credit report (if the quote is based on credit as a factor) but at least by having a preview of what will appear you can be better informed of any questions which may arise.

Note that no service provider cares about why you were late or how it was a mistake your last car got repoed. Any issues on your credit report must be taken up with the credit bureaus direct – car insurance companies cannot fix your credit.

When do I start contacting car insurance companies?

You are almost there. Before searching around for competitive quotes call your current agent and ask to review your policy.

Go through the cheat sheet created above and take special note of items on your existing policy which were not on your list and add them!

Then learn about what policy coverage you have.  Ask your agent whether or not you have the following types of coverage and the limits of coverage.

  • Liability Insurance
  • Comprehensive Coverage
  • Collision Insurance
  • Personal Injury Protection
  • Bodily Injury Liability
  • Personal Injury Protection (PIP)
  • GAP Car Insurance
  • Medical Payments
  • Rental Car Coverage

If you are not familiar with any of these terms take a look at our car insurance guide or ask your agent directly.

Knowledge of car insurance is the key to getting the best car insurance rates. If the limits and types of coverage are enough then also add these to your cheat sheet. For example:

Types of Coverage I currently have:

You now have a pretty good profile on paper ready so its time to start gathering quotes.

Evaluate Company’s Financial Strength

Insurance companies offer coverage in multiple major categories, including automobile, home, life, and business.

The most important aspect of an insurance company rating is the financial strength as rated by A.M. Best Company.

A.M. Best is the insurance industry watchdog that maintains the most up-to-date information for every insurance company that conducts business.

This company performs the legwork for all consumers to rate the insurers against standard measures.

Consumers can trust A.M. Best to alert the public very quickly when the health of an insurance company changes in either direction.

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Compare Coverage and Premiums

Motorists must carry sufficient insurance to mitigate the risk of loss of personal property and to cover possible damage to the property and personal well-being of others.

The cost of appropriate insurance coverage compared to the annual premium is the driving factor in choosing a company, but certain factors must be remembered to get the best value.

Coverage Limits

Comprehensive, collision, liability, personal injury and medical components must have the same coverage dollar amount in every quote.

Carrying the state minimum amounts is legal, but each motorist must evaluate their personal situation and decide if the minimum coverage would be sufficient.

Insured Grouping

Mature drivers, young drivers, professional groups and high-risk drivers are grouped into a risk category. Each group is then assigned a certain rate to mitigate the perceived risk based on the potential for loss.

Some insurers refuse to underwrite auto insurance policies for high-risk drivers.

Motorists who fall into standard categories will not find enormous differences in standard insurance rates but might be able to save money based on special discounts.

Premium Discounts

To reward certain risk-lowering behaviors, insurance companies will offer discounts for various car features, driver characteristics, locations and customer loyalty.

Each insurer will emphasize certain discounts and the motorist will find some of the discounts by continuing to ask more questions.

Deductible Amounts

When comparing insurance policies, the deductible amounts must be equal in each category. Some locations require multiple deductibles on the policy that can be set according to the motorist’s need.

Investigate Customer Service

Whenever a customer is unhappy with the way a company handles interaction with their customer base, the internet is the tool most people will use to get the word out to other people.

Simple searches on the most popular search engines will yield valuable information about the ability of each insurance company to provide effective customer service.

Look for specific information on each insurance company website.

Customer Service Awards

Auto insurance companies that emphasize great customer service will place the logos associated with awards they have won on their websites.

Marketplace Reputation

When a loss occurs for the motorist, the customer service department of the insurance company must be helpful.

Other consumers will provide valuable information about their actual experiences with customer service departments.

Website Usability

Insurance companies maintain online forms for certain activities that require information from the insured motorist.

Prior to choosing an insurance company, look at the online forms and the usability of the website.

Compare the Entire Picture

Saving money in the monthly household budget is important, but mitigating the risk is even more important when purchasing insurance.

Motorists must consider the following aspects to choose the absolute best auto insurance policy:

Highest Rated Company

Insurance companies with a rating of “superior” or “excellent” are acceptable candidates to carry insurance for the savvy motorist. Any other rating indicates possible issues when the company must pay claims.

Appropriate Components

Cars that are not expensive to replace must have the right coverage with over-insuring the automobile. Comprehensive and collision components must be carried for any car that is financed with a loan.

Knowledge of the coverage each component provides is essential to making wise choices about insurance.

Sufficient Dollar Limits

Insurers are encouraging motorists to cover substantial amounts of liability insurance to cover the risk of lawsuits.

Consult with informed insurance professionals to set the policy coverage limits.

All Possible Discounts

In all comparison efforts, one insurance company may stand out because of a special discount that will save substantial money on the insurance premium.

Track every discount during the comparison process and include these money-saving gems in the final choice.

Affordable Deductibles

When deciding on the amount of the deductible on the auto insurance policy, take into consideration all other deductibles on other property including boats, motorcycles, snow machines, and the homeowner’s policy.

If multiple losses happen concurrently, the insured must not be placed into financial hardship because of the total deductibles on the insurance policies.

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Deciding Factors

Choose the annual premium that offers the best combination of the aforementioned list at the most reasonable price.

Remember that the objective of purchasing insurance is to reduce personal risk of loss.

Saving a few dollars every month will be overshadowed by not having enough coverage to pay for all aspects of an accident if the unthinkable should happen.

How do I contact car insurance companies?

The best way is online. Few can argue the power of the internet as a source for finding companies who offer financial services such as car insurance.

Google terms like “car insurance companies” or “compare car insurance rates” and look for sites who offer a list of car insurance companies. You can either contact these providers directly or complete an online form.

We can help with your car insurance comparison search as our database has hundreds of car insurance companies nationwide and by entering your zip code below you will be automatically matched to local results for FREE.

References:

  1. https://www.nationwide.com/gap-insurance.jsp
  2. https://www.safeauto.com/car-insurance/liability-insurance
  3. https://www.libertymutual.com/auto/car-insurance-coverage/collision-insurance