Choosing the Best Car Insurance Company

Auto insurance coverage is one of the fundamental costs associated with owning a car—your policy is designed to protect the financial investment you've made in your vehicle, especially in the event an accident. That's why it's important to choose a reputable and financially stable insurance company.

Because of the ever-growing competition in the realm of auto insurance, it's never been easier to find low rates. While cost is important, there are several other factors you should consider when selecting an insurance company, especially when many offer similar quotes.

Determine the Right Coverage

The first step to choosing the right insurance provider is determining the best coverage for your financial situation. Begin by thinking about:

  • How much coverage you'll need in the event of an accident—you could need to reimburse for the damages and injuries of everyone involved.
  • Your state's minimum car insurance requirements.
  • How likely you (or whoever's insured under you) are likely to get in a car crash.

Then, consider the major types of coverage and which amenities you might benefit from:

  • Comprehensive and collision coverage.
  • Liability insurance.
  • Medical payments.
  • Under/uninsured motorist coverage.
  • Towing.
  • Rental car reimbursement.

Check out our other articles for an in-depth look at the different types of auto coverage listed above.

Find the Right Type of Auto Insurance Provider

There are three main types of insurers offering a variety of policies:

  • Captive agent.
    • An exclusive representative for a single insurance company who analyzes the details of your situation and recommends specific coverage to meet your individual needs.
    • They may be able to provide additional customer service, assisting with claims or any issues specific to your personal policy.
  • Broker.
    • A broker typically represents several insurance companies and can provide information about several different carriers and policies.
    • They can offer valuable advice, including when you should change policies or switch to a different auto insurance provider.
  • Direct provider.
    • Auto insurance companies that offer coverage directly to clients (instead of relying on an agent or broker), which eliminates the extra fees of using an intermediary.
    • Customer service is typically handled online or over the phone, though may not have the personal touch of a captive agent or broker.

Deciding which type of provider is best for you is purely subjective. Do you value customer service over additional fees? Are you more comfortable sticking with one insurance carrier or do you want to always have options?

Insurance Provider Credibility

It's crucial to research the financial stability of any car insurance company you're interested in— your carrier should be able to pay any claims you submit.

While most major insurance companies are a safe bet, be sure to do your research on smaller, lesser-known providers.

Your state insurance commissioner's website is a good place to find the most popular and reliable insurers in your state and will usually include insurance providers' consumer satisfaction ratings.

Finally, take the time to ask your friends and family about their car insurance carriers— those closest to you can offer the best and most honest advice (as long as they like you!).

Compare Rates

Once you've found a few financially stable companies with excellent reputations and customer service, you can start to compare rates. Ideally, you'll have at least three quotes to compare.

By understanding the fine print of all your auto insurance options, you can compare rates in the most accurate way. Knowing how your policy's rates are calculated ensures you won't overpay for a basic policy OR underpay for a low-rate policy that doesn't provide the coverage you need.

In addition to obtaining information on each carrier's payment schedule, be sure to find out if the company offers discounts for things like:

  • Safe driving.
  • Anti-theft devices.
  • Vehicles equipped with advanced safety features.
  • Multi-line coverage.

Finding the right combination of coverage, customer service, credibility, and price ensures you'll find the auto insurance provider that's right for you.