How to Compare Car Insurance Companies Effectively

Comparison shopping for auto insurance is more than simply looking for the cheapest prices. And while it is true that there is plenty of regulation to ensure that companies cover you as stated, the quality of service can vary from company to company. Simply put, the insurance business is a commodity, which means its like rice, wheat, oil, electricity, etc…—it’s virtually identical the same no matter where you buy it. Here are some factors to remember while car insurance comparison shopping.

Choosing a Good Insurance Carrier

Always remember that a policy is only as good as the company that issues it. When you compare auto insurance rates, take into account the reputation of the company.

Of course, if you ever have to file a claim, you’ll want to be sure that your auto insurance company is good for it. You don’t want to have to fight tooth and nail for your money, either. For information on the financial standing of your potential carrier, check out indices like Standard & Poor’s or Moody’s Investor services. You’ll also want to determine your prospective carrier’s track record with claim fulfillment and customer satisfaction. To ascertain this information, visit your state department of insurance website. They will have customer complaint ratios for every insurance company.

Get the Right Amount of Coverage

You can’t compare auto insurance rates without first knowing what the right amount of coverage is for you. The easiest way to determine this is to review each type of coverage and compare it with your needs. Here are the basic coverages and some tips on choosing how much coverage to get:

Property damage liability

This is how much you will have to pay if you damage someone else’s property. State minimums are low, but that means you’ll end up paying out-of-pocket if you total someone else’s car.

Bodily injury liability

If you physically injure another person in a collision, bodily injury liability will pay for the medical expenses. The major purpose of this coverage is to protect you against lawsuits by other parties. If you have considerable assets and/or a higher income, invest in more coverage.

Uninsured/underinsured motorist

This pays for funeral/medical costs if you are hit by an uninsured or underinsured motorist.

Personal injury protection

This pays your funeral or medical costs associated with an accident, regardless of fault. If you have good health, life, and disability insurance, you can skip this coverage.
Comprehensive and collision

Collision coverage reimburses you for repairs to or the replacement of your vehicle. Comprehensive covers non-accident-related damage, such as vandalism or weather damage. If you drive an older car, you might want to jettison collision coverage.