Comparing Car Insurance Companies

What Company to Choose?

Choosing an insurance company can be a tough decision, but one thing you don't want to do is rush to sign up with the company offering you the cheapest rate. You certainly might end up with this company, and this could be the best choice for you. But there are some variables to consider.

Service

First, do you want to have an agent in your community that you can call with questions and who will personally service your policy? Most people still prefer to work with agents, although the growth of the internet and effective marketing programs by Progressive and GEICO, among others, have shifted lots of business to these so-called direct writers of insurance (called direct because you deal directly with the company and not through an agent) and to other online sellers who do not rely on agents to sell or service their policies. Maybe all you care about is having an "800" number you can call at any hour - millions of consumers do so.

Some state insurance department web sites provide results of consumer complaints lodged against insurers by consumers in that state, and these can be helpful guides to companies you might want to avoid. As many insurers and agents will tell you, it's no good to get a cheap insurance policy if you get lousy support and service when you are in an accident or file a claim.

Additional Discounts

Check for discounts. If you insure multiple vehicles with the same insurer, you normally get a discount. If your car has anti-theft and certain safety features, that's another slice off your rate. Did you complete an approved driver education course? If you're a student do you qualify for a discount because of good grades? What about a low-mileage policy? Some insurers are sweetening low-mileage offerings in the wake of this summer's $4+ gasoline prices. And GPS and related communications technologies are slowly leading to "pay-as-you-drive" car insurance.

Also, make sure you find out an insurer's cancellation policies. These are set by the individual companies and not by the states.

Insurers to Consider in Your State: You should check out your state's insurance department site and review auto-insurance rules. You also should be able to find out the names of auto insurers authorized to do business in your state (you'll be surprised by how many there are). Some state insurance web sites also have valuable consumer studies, including details on which insurers in a state generated the most consumer complaints. To find your state's insurance website, use the National Association of Insurance Commissioners interactive map of state insurance department websites.

Insurance Company Rankings

Recommendations from family and friends remain the most powerful driver of insurer choices. Just make sure the tips you receive are solid. For example, if your brother found a really cheap policy, you should ask him about the coverage it provides and whether he knows anything about its service and claims records. Or if a friend across town really dislikes her insurance agent, keep in mind that your experience could be totally different with another agent from the same insurer. And because state insurance rules can differ so much, be careful about basing your selection on opinions from people in other parts of the country.

J.D. Power and Associates provides three sets of car-insurance rankings, measuring consumers' overall experiences with auto insurers, plus subsets of consumers who were new buyers of car insurance policies or been involved in an insurance claim where their vehicle suffered collision damage. The insurers listed in the company's car insurance rankings represent about 75 percent of the national market for auto policies, says Jeremy Bowler, who oversees the insurance rankings. Further, each company mentioned in the survey must have been involved in at least 300 separate customer surveys to be included.