How to Compare Auto Insurance to Find Your Best Policy

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Insurance companies often look the same, so how do you know which is the best one for you? Price is, of course, a top consideration, but it's just one aspect to think about.

Start your hunt for a car insurer by learning the strengths and weaknesses, comparing coverage terms, and creating a scorecard. Make sure you also check the policy term. It's worth your while to compare companies to find the best fit. 

What Makes Providers Different?

There are a few key things that can make some providers stand out more than the rest. Two of the main details are financial strength and customer service.

Standard and Poor’s rating system will give you an idea of an insurer’s financial strength. It uses a report card-style grading system. Most of the big-name car insurers that you've heard about mostly fall at the top end of the ratings.

Tip

It makes sense to look into an insurance company’s financial health before you do business with it.

To find out whether a company has good customer service, you can turn to online reviews, ratings agencies, and reported complaints. You can use the National Association of Insurance Commissioners' search engine to find complaints in your state, as well as sites like J.D. Power that rate insurers based on consumer feedback.

How to Compare Quotes

Not every insurance carrier offers the same auto coverage. Different deductibles might be available, and options offered may vary by carrier.

How to Compare Auto Rates

For starters, get quotes from at least three different insurers so you get a feel for the going rate. If you have a few dings on your driving record, you might even find cheaper rates with a company that specializes in higher-risk drivers. Look at different policy variables to see how they affect the quoted rates you get.

How to Compare Auto Coverage

You'll also likely want to compare different coverage limits, looking at the same and different insurers. These factors include the amount paid out per accident per person, the deductible, and the types of insurance carried.

If your car is an older model, it might not be worthwhile to carry the comprehensive and collision type of auto insurance. It might cost more than paying out of pocket if your car were damaged or totaled, especially if its replacement value would only be a few thousand dollars. 

Note

If you've had any recent life changes, such as marriage or a new baby, be sure to mention them when getting quotes. 

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 company. 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 seem to be friendly and courteous or annoyed and grumpy? How easy is their website to get around?
  • Knowledge: Does the agent explain all coverage options, or does it seem like they are rushing you through the process and cutting corners?
  • Response time: Do you get a quick callback 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. Note the prices quoted by each carrier you look at.

Check for Financial Stability

Your car insurance may be no good if your insurer goes out of business or struggles to pay claims.

Look for car insurance company profiles online for an overall feel of its structure, financial status, and specialties. Consult ratings, such as Standard & Poor's (S&P), to learn about the financial viability of companies you're looking at. Ratings include:

  • 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

Lock in a Good Rate

The length of a policy matters, and it fluctuates more on a car policy than on other types of insurance. When looking at companies, note whether or not you are going to be locked into a six-month or year-long policy.

With a yearly policy, your rates cannot go up for an entire year. Of course, your rates cannot go down either. So, if you have any big events during the year, such as a ticket dropping off of your driving record or your 25th birthday, it's time to get new quotes, since you are free to change carriers anytime you wish. 

Review the Fine Print

When you get quotes, ask agents about extras that come with your policy, and verify whether they add any more cost. For instance, are other people covered when driving your car? If you go out and buy a new car, is it covered right away? If you rent a car, are you covered under your policy, or would you need to buy insurance from the rental agency?

If you have extras such as a rider on your current policy that says that you will receive all manufacturer (OEM) parts for your car repair if you are in an accident (vs. aftermarket parts), take that coverage into consideration when looking at other companies. If OEM parts matter to you, you should know that not all plans offer OEM parts for repairs.

You should also look at towing limits, car rental limits, and different types of service fees, such as a finance fee for paying in installments rather than in one lump sum. These changes may be small, but when added up they can make a big difference. You should be aware of the differences so you will not be surprised at the time of a claim.

Don't Forget Discounts

Most car insurers offer some types of discounts, such as those for good students, good drivers, and people who bundle other types of insurance, such as homeowners or renters, with their auto plan.

While other discounts might not be advertised, it still pays to ask each company for all of the possible discounts they offer when you're getting quotes. Some give discounts after you complete a defensive driving course, while others offer "PPM," or "pay-per-mile insurance." Anything you can do to lower your premium is a good idea.

Some insurers will also give you a discount if you pay for a six- or 12-month policy upfront, but if you need a payment plan, compare the fees across companies.  Think about whether each company takes credit cards or only accepts debit and whether or not you're required to have payments automatically taken from your account if you use their payment plan.

Frequently Asked Questions (FAQs)

Where can you compare auto insurance rates?

While there are certain sites that make it easy to compare auto insurance rates, you can also do the research on your own. Visit the websites of the companies you're interested in, and make a note of what they offer. Be sure to get quotes in writing; then, compare across different companies to find your best fit.

What sites compare auto insurance?

There are sites that will allow you to compare auto insurance from many companies at once. Still, some sites may be more interested in promoting the brands they work with—sharing the information you input—than in looking at pricing data and helping you compare.

Why should you compare auto insurance?

Comparing auto insurance can help ensure that you have the coverage you need at the right price. If you select the first auto policy you find, there's a chance that it won't meet your needs. You also may lose out on the chance to save some money.

Article Sources

  1. National Association of Insurance Commissioners. "Consumer Insurance Search Results." Accessed Dec. 20, 2021.

  2. Liberty Mutual. "Customer Disclaimer." Accessed Dec. 20, 2021.

  3. Allstate. "Car Insurance Discounts." Accessed Dec. 20, 2021.

  4. Progressive. "Auto Insurance Discounts." Accessed Dec. 20, 2021.

  5. Mass.gov. "Shopping for Auto Insurance." Accessed Dec. 20, 2021.