Things to Avoid When Searching for Car Insurance

Avoid a company with complaints, financial difficulties, and low-cost offers in emails when searching for car insurance. Using online comparison tools are a safe way to search for car insurance.

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A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: May 26, 2021

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Here are three things to avoid...

  • A company that has several complaints against it
  • A company that is experiencing financial difficulties
  • A company that is seeking clients through email

When comparing car insurance quotes online, people naturally gravitate towards the lowest prices. But there are some things to avoid when seeking the lowest policy prices.

Those who are searching for the lowest car insurance prices will learn exactly how to pick these companies out of the crowd.

Enter your ZIP code in our comparison tool above, and you will receive multiple car insurance quotes that you can compare for FREE!

1. Avoid a Car Insurance Company with Several Complaints

The first thing that people will want to avoid is a car insurance company that has been the target of several complaints.

A company’s clients have several places where they can submit complaints which offers opportunities to find red flags before they purchase the insurance from that provider.

If you are having problems with your car insurance, we can help you submit your car insurance complaint.

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The Better Business Bureau

One place people have the option of filing a complaint against a car insurance company is the Better Business Bureau. This organization takes complaints and gives the company a grade based on how well the company resolves disagreements.

If the company has some criticism but has managed to make the client happy in the end, it would be considered a safe company for purchasing insurance.

J.D. Power and Associates

People can also look up a car insurance company on the J.D. Power and Associates website. This organization asks the car insurance companies’ clients to rate the company in five areas. These areas are:

  • Billing and Payment
  • Pricing
  • Contacting the Insurer
  • Policy Offerings
  • Overall Satisfaction

A company that receives high ratings from its clients is doing a good job satisfying its customers and is a company from which people should consider purchasing their car insurance coverage.

Online Forums and Social Networking Websites

People can also go to online forums and other social networking websites to view or submit complaints. Forums and other websites provide an audience for complaints concerning consumers’ dealings with their car insurance companies.

These types of comments can also snowball when more people add their negative experiences to the original comment.

If people receive a low car insurance quote from a company that has several complaints against it that have not been resolved to the clients’ satisfaction, the company should be avoided.

Although the price offered is low, the quote will not serve their needs if they file a claim, and the company refuses to process it.

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2. Avoid a Car Insurance Company with Financial Difficulties

One reason that car insurance companies avoid paying claims is because they are paying high commissions to their agents for adding more and more clients to their rosters. They do this by enticing people with low car insurance quotes.

After time goes by and the clients file a claim, these clients have difficulties receiving payment. These problems occur when a car insurance company is financially unstable.

A car insurance company is required to have a sufficient amount of money within its reserves so that it can pay all of the legitimate claims that are filed.

The Danger of Bankruptcy

It can become difficult for car insurance companies to meet all of their financial obligations if they have several claims filed at once. An example is when there is a riot in an area where several automobiles are vandalized at once.

After these car insurance companies have paid several claims, they may find that their reserves have been depleted.

What may happen after a car insurance company loses all of its reserves is that it is bankrupt.

Anyone who filed a claim after the car insurance company paid its last dime to previous claims will need to fulfill its obligations with these clients, but it will be done through the bankruptcy court.

Keep in mind that it may take several years for all claims to be satisfied.

Checking the Credit Ratings

If people are offered a low car insurance quote from a company that is experiencing financial difficulties or has a low credit rating, it will not be worth it to them to pay these lower car insurance rates. One great place to seek an insurance company’s credit rating is through A.M. Best.

People should only consider purchasing car insurance from a company that has received A.M. Best ratings in these areas:

  • A++, A+ (Superior)
  • A, A- (Excellent)
  • B++, B+ (Good)

People should avoid any car insurance company with a ranking lower than the above ratings.

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3. Low-Cost Car Insurance Offers in Email

The last thing that people will need to avoid is no less important than the other two. Be cautious about where you discover each car insurance company. Email folders often have illegitimate companies claiming to offer great discounts for even better coverage.

Email folders contain a lot of mail that is unsolicited. Often it is not always in the receivers’ best interests to look into these offers.

These emails may have low car insurance quotes for people but they require personal information that should not be disclosed to non-validated companies.

In these situations, people often give unscrupulous thieves their personal information which can result in several problems, including identity theft.

Finding Good Car Insurance Companies

People can be assured that they are safe entering their information into our comparison feature because they will only be asked very limited information that will be specifically related to what a car insurance representative needs to know to offer a quote.

It all begins just by entering your ZIP code below to receive FREE car insurance quotes.

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Enter your ZIP code below to view companies that have cheap car insurance rates.

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