10 Things to Think About When Comparing Auto Insurance Companies

If you are ever in an auto accident, you want to be sure to have the car insurance coverage to take care of any damages that may occur as a result. However, you certainly don’t want to pay more than you need to for the coverage that you require.

Many people are overpaying for their car insurance simply because the do not take the time to shop around and compare the policies and rates of auto insurance companies. Try our FREE quote comparison tool by entering your ZIP!

Take the time for auto insurance comparison, as well as their policy offerings and rates. You may find that you save a significant amount of money over the course of one year. For example, a quick comparison of two car insurance providers using an online comparison site provided two very different quotes for the same type of auto insurance.

One insurance company covered the car for $1029 per year, while the other charged $1832 for the same type of coverage. The difference of $803 would mean more money in your pocket over the course of a one-year term.

The top 10 things you should think about when comparing auto insurance companies and policies are:

1.) Determine the type of coverage you need.

If your car is financed or leased, you will need to carry full-coverage insurance. If you own an older car, and the car is not financed, you may choose to carry liability only. The first step in comparing auto insurance companies and policies is to determine the type of policy you need.

2.) Determine how much coverage you need.

Particularly if you intend to purchase a liability only policy, find out what the minimum limits for coverage are in your state. Car insurancecompanies will tend to sell policies that exceed state limits by quite a bit. If you know what the minimum limits are in your state, you may challenge the price you are quoted for liability insurance.

If your car is financed or leased, your coverage requirements are determined by the value of the car. However, you may find that it would benefit you to acquire “Gap” coverage, in addition to the standard Collision and Comprehensive coverage that is provided with a full-coverage policy. Gap coverage will pay any difference, less your deductible, between the amount owned on the vehicle and the amount that is financed.

3.) Review your driving record.

If you have a spotless driving history, you can expect to receive great rates from just about any auto insurance provider. However, if you have issues on your driving record, these issues are expressed as “points” against your driving history. Points disappear after a certain amount of time.

Check with the laws of your state to find out how long points will stay on your record. If the points are about to expire from your record, hold off on obtaining auto insurance quotes until they are eliminated. You will save a considerable amount of money by doing so.

4.) Obtain quotes from several companies that provide coverage in your area.

Online auto insurance websites make comparing auto insurance quotes a quick and painless process. By now, you should know the type of policy, the amount of coverage that you need, and your driving history. You are armed with knowledge. Now, it’s time to compare policies and rates of the various insurance providers in your area.

Navigate to one of the comparison sites and enter your zip code. The search results will provide a list of auto insurance companies that provide coverage in your area. Select the type of policy you are shopping for and request quotes from several companies.

5.) Research reviews for your selected insurance providers.

At this point in the process, you should have a list of car insurance companies that provide the type and amount of coverage you need. Now, it is time to research each company. Perform an Internet search for customer reviews of each company.

Read what customers are saying about the company’s customer service, responsiveness and payment of claims.

Reading customer reviews is a great way to gain insight into the way insurance companies do business and treat their customers. If an insurance company has a history of rejecting claims for payment, go on to the next one. If the company consistently provides poor customer service, move on.

6.) Research the financial strength and market share of your selected insurance providers.

Companies, such as JD Power and Associates, provide rankings of the Best and Worst insurance companies in the US. These rankings are based on random sample surveys of respondents from all over the nation.

In addition, companies such as AM Best and Standard & Poor evaluate the financial strength of the companies. Additional resources include your state’s insurance regulatory agency. Good insurance companies tend to be ranked high in market share and customer service factors.

7.) Check out discounts offered by each company.

Now that your list of potential auto insurance providers has narrowed, find out the types of discounts offered by each of the remaining companies. You may need to phone an agent at each company to gather information about discounts. One way to save money on your auto insurance is to ensure that you are receiving all of the discounts that you might qualify for.

If you are a college student with good grades, most insurance companies offer a “Good Student” discount. If your family owns more than one car, a great way to save on auto insurance is by carrying all of your policies with one provider. Most companies offer a “multi-car discount” for their policy holders that carry policies on more than one vehicle.

8.) Consider the deductible.

In most cases, auto insurance carriers will start the deductible for a new policy at $500. You have the option to change the deductible. A higher the deductible, the lower your premiums will be.

Just remember, though, that if you are in an accident or if the vehicle is damaged, more money will come out of your pocket for the higher deductible when it comes to getting the car repaired or replaced.

9.) Discuss your final selected companies with family and friends.

Ask around to find out if any of your family members or friends have had experiences with the insurance companies on your list. Feedback from those close to you is always a good thing.

10.) Select your company and policy. Thoroughly review your policy before you sign.

Be sure to read your policy before you sign it. Make sure that all of the discounts are applied and you are purchasing the insurance that you specified. Start saving money today by entering your ZIP into our FREE quote comparison tool!

Spending a little time shopping around and comparing auto insurance companies will save you money in the long run. After all, even if you spend three hours doing the research, and you end up saving $900 per year, that is $300 per hour for the effort!