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5 ways to compare car insurance companies

By Posted : 04/10/2015

five ways to compare car insurance companiesWhen you've already compared car insurance quotes and like two or more prices that are close or equal, you have to choose the winner.

The cutest mascot shouldn't be the deciding factor.

Car insurance companies evaluate and appeal to drivers differently. Some companies specialize in families, some in older drivers and some with tarnished driving records. So comparing car insurance companies is just as important as comparing car insurance quotes.

Of course searching for cheap car insurance can be time-consuming, but the prospect of saving money can be a great motivation to take a few steps to compare auto insurance companies in addition to rates. J. Robert Hunter, director of insurance for the Consumer Federation of America in Washington, D.C., recommends that consumers comparison shop for themselves.

"An insurance agent typically works with just a few insurance companies, so even if you decide to work with an insurance agent you should do some research first on your own," says Hunter. "Then, after you get quotes from four or five insurance companies, you can call an agent and say, 'I know what the prices are that I can get, now you give me your best shot and see if you can do better.'"

Here are five ways to compare car insurance companies and find your best match.

1. Research the car insurance company’s consumer track record.

To narrow down your search among car insurance companies, Hunter recommends starting with your state insurance commission's website.

"Most states have a buyer's guide for auto insurance that lists the companies that sell insurance in your state," says Hunter.

He says state complaint ratios are more important than financial ratings for car insurance. Every state has an insurance guaranty fund that will pay some claims if the insurance company goes bust. It's still prudent, though, to check up on the insurer's financial health.

"However, if you're only shopping every few years, then you should look at the A.M. Best ratings just to make sure the insurance company is financially solvent and can pay you if you need to make a claim," he says.

You should also research how carriers treat consumers. J.D. Power's insurance customer service survey and Insure.com's "Best insurance companies" analysis are two great resources.

"The two most important things to look at when choosing an auto insurance company are the price and the claims service," says Hunter. "Choose the company that has both a low level of customer complaints and low prices."

2. Compare complaint ratios.

Hunter suggests choosing five to seven companies and checking their complaint records on the National Association of Insurance Commissioner's website or on your state’s insurance department website "You can quickly knock out the companies with the highest number of complaints, because you never want to work with an insurance company that doesn't offer good customer service," says Hunter.

He also recommends checking the most recent Consumer Reports survey of car insurance providers.

3. Compare the exact same coverage when comparing car insurance companies.

The best way to save on your car insurance is to buy only what you need, says Hunter.

"If you have good health insurance you don't need to pay extra for PIP (Personal Injury Protection), and if you have an older car, you don't always need to pay for collision insurance."

Hunter says most people only need liability coverage and uninsured motorist coverage of $100,000 per person and $300,000 per occurrence.

He says you should establish your desired coverage limits before shopping and then be sure to use those same limits for every car insurance quote.

4. Check for car insurance discounts.

Before you begin comparing car insurance quotes, make sure you know about your potential discounts for things like bundling your home and auto insurance with the same company, good grades, a good driving record, anti-theft devices and anti-lock brakes. Ask each insurance company for any other possible discounts so that you are comparing the lowest possible rates.

You can also raise your deductible on collision and comprehensive coverage to reduce your premiums. If you do this, make sure you are using the same deductible with each company so that your rate comparison is accurate.

5. Compare optional auto insurance coverage.

Many insurance companies offer optional coverage for things like rental car coverage while your car is being repaired, towing and labor coverage or even CD/DVD replacement costs if these items are stolen from your car.

"Don't take any optional insurance coverage unless you really think you need it," says Hunter.

However, if one company offers optional coverage that you want at the same price or close to the price of another company's insurance policy without the optional extras, it may be worth choosing the policy with the options, says Hunter.

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