Why should I compare auto insurance?

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Joel Ohman
Founder, CFP®https://res.cloudinary.com/quotellc/image/upload/insurance-site-images/ciccom-live/41b5e36b-joel-ohman.jpg

UPDATED: May 1, 2016

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It’s all about you. We want to help you make the right coverage choices.

We strive to help you make confident insurance decisions. Comparison shopping should be easy. We partner with top insurance providers. This doesn't influence our content. Our opinions are our own.

Here's what you need to know...

  • Compare prices, financial stability, and reputation of any potential providers
  • Most companies offer similar discounts but some do not offer any
  • High-risk drivers will probably have to do more research to obtain a good deal on insurance
  • Take your time when comparing companies to make sure you get the best deal possible

There are many reasons why you should compare auto insurance. Purchasing insurance for all vehicles in your household is not only important but also required in most areas of the country.

Many insurance providers compete to have your business which is why it can be tough when choosing a provider.

Not all auto insurance companies are created equal, and not all of them provide the same products.

In order for you to end up with a quality company that will fulfill all of your insurance needs, you should take the time and energy to look more closely at a few and compare key points.

Start your comparison of auto insurance rates by entering your ZIP code in the Free quote box above!

Price Comparison

The rate quote is one of the biggest ways that drivers compare policies. Car insurance can be a big expense every year or month, depending on how often you pay your policy.

Finding the cheapest policy is the goal of many drivers, and saving money is the main reason to compare rates.

You can compare rate quotes a number of ways. If you have time and prefer face-to-face interaction, making an appointment at a few local insurance offices may be the way to go. This is especially true if you do not have much understanding about insurance and how it works.

When you visit different agents, you will be able to sit down with them and evaluate your insurance needs. This includes determining what is the best coverage for the vehicle you drive, how many people you are insuring, and what you deductible you can afford.

After collecting the necessary information, the agent can then run it through the system and come up with a quote. The majority of offices will do this at no charge to you. After you visit a few offices, you can choose one based on policy price alone.

A quicker way to get free instant quotes is through the Internet.

You can visit each company’s website separately or you can go to one site that provides quotes for multiple insurance companies. The latter method is the most expedient, as you only have to enter all the pertinent information once.

Rates may vary a bit between each insurance company but ultimately your premium will be based off information provided by you about your vehicle and your driving history.

If your driving record is less than stellar and/or you drive a fast luxury vehicle, you can spend hours trying to find a low insurance rate without success. Visit the Insurance Information Institute for more details on how the policy rate is determined.

Although policy price may be a big factor in choosing an insurance company, there are other things that are important to compare as well. You may decide that paying a bit more for a policy with a higher quality company is worth it.

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Enter your zip code below to view companies that have cheap auto insurance rates.

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Financial Stability

Another factor that is important is financial stability.

How a car insurance company rates financially should tie into your decision when comparing different companies.

The financial rating and outlook for the future can reveal a lot about an insurance provider. Once you have narrowed your choice of providers down to three or four, visit a site such as A.M. Best and look each of the companies up.

You will be presented with a wealth of information. The financial strength rating will show the rating, the financial size category, the company’s outlook, action, and effective date. Look for a company with a high rating, such as A- and better.

You will also see the issuer credit rating of the company, which gives a good idea of the ability of the company to meet its financial obligations, including both present and future claims. You will see a long-term rating, outlook, and action. Look for a company whose outlook is stable.

Insurance Company Reputation


The reputation of the company you are researching is important as well. There are some insurance companies that are a bit shadier than others or that have many complaints against them.

Comparing certain aspects of every insurance company’s reputation with its customers will help you make the right decision for your auto insurance needs.

A great source to tap into when you are comparing companies is the insurance department in your state. Most drivers don’t have the contact information of their local department, but it can easily be found through the National Association of Insurance Commissioners.

The state department can also provide a wealth of information about the insurance providers in your area.

First, check to make sure each of the companies you are considering is licensed and registered to provide insurance in your state, as not all companies are. Secondly, ask about any criticisms or compliments that may have been made against any of the companies.

Listen closely for complaints about the claims process, as this is where most insurance companies make their money.

You may think that because you pay your premium every month, you will be treated fairly in the event you ever have to submit a claim. Unfortunately, insurance companies pad their bottom line by skimping on claim payments.

Some companies will offer a lower settlement than is right or fair, and others will fight paying the claim at all.

Any criticisms against how a company handles claims is a red flag, and you should strongly consider choosing a different company.

Another source for complaints is the Better Business Bureau. You can enter your zip code and then search for car insurance companies in your local area. Whether the company is accredited by the Better Business Bureau or not, it will still list how many, if any, complaints have been made.

The BBB will break down the complaints into different categories, showing the total number of complaints in regards the following:

  • Billing and collecting
  • Sales and advertising
  • Problems with service or products
  • Warranty and guarantee issues
  • Delivery issues

It also shows how many were closed complaints, which means that the company did its best to resolve the problems.

Discounts Offered

Once you have compared auto insurance companies based on the main issues, you can further compare them. An additional comparison is to see what types of discounts are offered by each provider.

Although you are quoted a certain rate, take advantage of any discounts offered by any of the companies which will save you additional money.

Many of insurance companies today offer similar discounts. However,  some do not offer any while some offer discounts that other providers do not. Ask a representative or your agent if you are eligible for any discounts they offer. You never know how much you could save!

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High-Risk Drivers

One group of drivers that may have to do a more thorough search for car insurance is high-risk drivers.

If you are going through the normal channels to find an insurance policy but you have a terrible driving record and/or have had your license suspended, there’s a good chance that many insurance companies will choose not to insure you.

Because having car insurance is required for most drivers, you will eventually find a policy, but you may have to get creative. There are some insurance companies that tailor specifically to drivers that are considered high risk.

The best way to find and compare these companies is to do a general search for high-risk auto insurance which will then direct you to their websites.

When you are comparing insurance policies for high-risk drivers, prepare to see very high rates. The only way these companies are able to offer you a policy is to have you pay a much higher premium so that their risk is somewhat lowered.

In the event that these high-risk or non-standard companies choose not to insure you, contact your state insurance department to see what your state government offers in terms of insurance.

Be Selective


The main reason you want to compare different aspects of auto insurance is that each company can vary greatly. A good company for your friend may not be a good fit for you.

It will take you a little more time to check into the companies, but fortunately, the Internet makes it easier. Most of the information you need is right at your fingertips and can be found at all times of the day. Taking the time to do your research will ultimately save you from frustrations in the future.

If you choose a company and find that it is not meeting your insurance needs the way you were hoping, don’t hesitate to do another comparison search!

There is nothing wrong with changing companies, as long as you don’t have a gap in coverage. Find the right provider and after you sign the policy, your new agent can cancel your other one.

It is quick and easy to compare auto insurance rates by filling your ZIP code in the FREE quote box provided below!

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