How to evaluate car insurance companies
Car insurance is one of life’s unavoidable evils. We all need it, but there is a lot of variety in the industry. This means it can be difficult to determine the right car insurance for you. Now, not every car insurance company offers the same rates or even provides the same level of service. So, to make the decision process easier, here are some guidelines for evaluating car insurance companies.
1. Assess your needs
To make a good decision about car insurance, you need to determine your needs first. There are two important questions you must answer.
- What coverage is required by law? In the US, every state has minimum requirements that include state-mandated liability insurance, personal injury protection (PIP), and the property damage you cause when you are in an accident. The type and amount of coverage you need vary from state to state.
- Does your lender require you to carry comprehensive and collision? If your car is financed, the finance company may require that you carry these additional coverages for its protection.
2. Shop around
Next, one of the best ways to decide on an insurance company is to shop around and compare rates and coverage for several companies. So, make sure to get quotes from at least three different companies, as the price difference between them can be substantial. You can find the cheapest car insurance rates by using an online car insurance quote comparison website.
3. Consider the company’s overall brand
Sometimes, your car insurance company isn’t just in the business of providing you with car insurance. It also provides other services to its customers, both by phone and online, which you will use often. Use the following questions as guidelines in determining the trustworthiness of an insurance provider.
- How long has the company been in business?
- How many years has it provided car insurance?
- What is its online presence?
- How much information is available about the company and its rates?
- What methods does the company use to deliver customer service?
Typically, trustworthy insurance providers are easy to find online and have transparent rates. Their customer service representatives are also usually knowledgeable about products and friendly. Doing the leg work to investigate potential auto insurers can give you key information that will help you make an informed decision.
4. Look for good customer reviews
Speaking of customer service, a key part of finding the right car insurance company is looking at what existing clients have to say about it. Customer reviews are an important part of shopping for any product or service. You should look for customer reviews that specifically talk about the company’s claims service and pricing.
Good customer reviews typically mention the responsiveness of the insurance provider’s claims department and how easy it was to process a claim. These reviews also speak of the company’s fair rates and transparent process.
During the research, if you see more of these reviews than good ones, consider taking your business elsewhere. Be on the lookout for these red flags in customer reviews:
- Reviews that suggest an individual was denied a claim for no good reason
- Reviews that imply the company is not transparent about its products, prices, or policies
- Comments about the lack of responsiveness from the insurance company
- Complaints about premium increases without any specific information offered
5. Look for an insurance provider with a strong financial standing
Now, if you are looking for ways to save on car insurance, you want to choose an insurance provider that has a strong financial standing. To find out if a car insurance company has a weak financial footing, you can check with the National Association of Insurance Commissioners (NAIC) website. The NAIC does not rate individual insurance providers, but it does provide some information that you can use to compare the financial standings of different companies.
Generally, an insurance provider with a strong financial standing can offer you protection against any potential rate increases or premium hikes. This factor, paired with a good claims record, can provide you with a lot of security as a customer.
6. Check the company’s accreditation
While not a guarantee of quality service, insurance companies that are accredited by certain organizations tend to be better than those that are not. Insurance companies can get accredited by third-party organizations like the Better Business Bureau (BBB).
Moreover, these organizations usually offer accreditation to insurance companies that have strong customer service records and treat their customers fairly. They also require participating insurance providers to submit themselves to an annual examination of customer complaints and other record keeping.
The bottom line: Finding the right insurer for you
Finally, knowing how to compare car insurance companies and what key factors to consider can give you a head start in your search for a quality auto insurance provider. While there are many factors that go into choosing the right car insurance, these six steps can help you find a provider that offers good coverage and looks out for your best interests.
