How to Compare Insurance Companies

Find the Best Insurance Company for You

Learn how to compare insurance companies to help select the best company for you and your family. Insurance companies often look similar, how do you know which is the best company for you? Price is, of course, a top consideration, but cost is just one aspect to consider. Start by knowing your potential insurance company's strengths and weakness, compare coverage, make your own scoring system, and do not forget to check the policy term.

Standard and Poor’s rating system will help determine the insurer’s financial strength. In between ratings exist, for instance, an A+ rating is teetering on the strong and very strong borderline. Most of the big named insurance companies advertised regularly fall in the strong and above categories. But, it is nice to be able to check into an insurance company’s financial health before placing your business with them.

Rating System for Insurance Companies

Car insurance
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  • AAA : Extremely Strong
  • AA : Very Strong
  • A : Strong
  • BBB : Good
  • BB : Marginal
  • B : Weak
  • CCC : Very Weak
  • CC : Extremely Weak
  • R : Under Regulatory Supervision
  • NR : Not Rated

Look for car insurance company profiles online. A profile can give you an overall feel for the company’s structure. Profiles can also give you good information on individual company specialties. Any snippet of information can help you determine if a given company is a good choice for you.

Compare Coverage

Not every insurance carrier offers the exact same insurance coverage. Different deductibles might be available, and optional bells and whistles may vary with different insurance carriers. For instance, if you currently have and additional rider on your policy giving you all OEM parts if you are in an accident vs. aftermarket parts; you’ll want to take the coverage into consideration when comparing insurance companies. If OEM parts are important to you, it is important to know not all companies offer OEM parts on repairs.

Other things to look for when comparing insurance policies include towing limits, car rental limits, and service fees. These variances may be small, but when added together can make a considerable difference overall. The main concern should be being aware of the differences, so you are not surprised at the time of a claim.

Make Your Own Scorecard

Most of the time when shopping for insurance, you do not have a lot of information to go on for each agency. Make a scorecard to track customer service and price so you can get a better handle on what your future experience might be like with any given agency. A few items on your scorecard might include:

  • Friendliness: Does the insurance agent taking your information seem friendly and courteous or annoyed and grumpy?
  • Knowledgeable: Does the insurance agent explain optional coverage, or does it seem like they are rushing you through the process and cutting corners?
  • Response Time: Do you get a quick call back with a price, or do you have to call the agency back begging for your quote?
  • Price: Price is always on everyone’s mind when it comes to insurance. Be sure to note the prices quoted by each insurance carrier.

Check the Policy Term

The length of a policy fluctuates more on a car insurance policy than on other types of insurance policies. When you are comparing insurance companies, make sure to note whether or not you are going to be locked into a six month or year policy. A year policy makes it so your rates cannot go up for an entire year. Of course, your rates cannot go down either, so make sure you don’t have any big events within the year such as a ticket dropping off or a 25th birthday.

The nice thing about insurance is you are free to change carriers anytime you wish. Comparing insurance companies should be a simple process, as long as you know what to look for. Learn about a company’s background, compare coverage, and verify the policy’s term to fairly compare insurance companies.