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: Oct 1, 2020

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Key takeaways...

  • Insurance companies offer coverage in multiple major categories, including automobile, home, life, and business
  • To reward certain low-risk behaviors, insurance companies will offer discounts
  • Some insurers refuse to underwrite auto insurance policies for high-risk drivers

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.

One of the most important facets to conducting a true investigation into the final offering of each insurance company is to keep good records that compare the same attributes.

To avoid wasted effort, consider the following process for a true auto insurance provider comparison.

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Table of Contents

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.

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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.

Use our FREE quote tool to find auto insurance rates today!

References:

  1. http://www.ambest.com/
  2. https://www.progressivecommercial.com/coverages/personal-injury-protection/
  3. https://www.acceptanceinsurance.com/our-products/auto-insurance/high-risk-auto-insurance/
  4. https://www.thebalance.com/what-is-insurance-underwriting-2645778
  5. http://www.21st.com/auto-insurance-information/understanding-car-insurance-deductibles.htm