Choosing an Insurance Company

Amber P. July 22, 2020

If you are having a hard time looking for auto insurance, you have come to the right place. We can help you understand the ins and outs of car insurance to help you save time and money.

When looking for auto insurance, there is a lot that goes into choosing the best one to suit your needs. Insurance is there to help you, but when it comes down to it, they are a business. Insurance companies are everywhere, marketing and making ads to compete, which may seem overwhelming, but on the bright side, it means it will be easier to find lower rates.

When it comes to choosing the best insurance company, it can be tough. You may get similar quotes for each one, or you don’t understand how much insurance you may need. We will walk you through the steps to help you decide on what insurance company will work for you.

Identify Your Insurance Needs

Just like anything in life, you first need to understand what your needs are with auto insurance. You don’t want to overdo it because you may be paying more than you need to, and you don’t want to get less, to save you a buck, just to end up spending more if something does happen.

What do you want from your insurance company?

All insurance companies may seem the same, but there are different pros, cons, and their benefits will differ from person to person. You have to know what you want in order to find an insurance company that suits you. Are you looking for low rates? Great customer service? Or good coverage? These are things you will need to know first.

How much coverage do you need?

Whether you looking to ensure you are fully covered or for the cheapest minimum coverage policy, you must understand what could happen. Cheap policies may be cheap in the moment, but after an accident the out of pocket costs are expensive.
If you drive a car that is brand new or a car that is one of a kind, you will want full coverage, and understandably so. But if you are driving an old car that has little resale value, there would be no point in paying for full coverage.

How much coverage can you afford?

When looking for coverage, you want to make sure you have enough coverage, and at the same time you want to make sure it is affordable. If you do not have enough for full coverage, paying for the minimum may be your only option.

What’s your driving history like?

Your driving history as well as how much you drive can affect how much you are being charged for car insurance. If you have been in multiple accidents, or received multiple tickets, your insurance will be more expensive. At the same time, if you have a history of getting into accidents, you may want to buy more coverage.

There are some companies who are willing to insure high risk drivers, so its important to look around to find them if this does apply to you.

Where do you live?

Every state will have their own requirements, for example, they have a minimum of what insurance will cost.

Depending on the state, insurance costs may be very high. For example, an average policy in New Jersey averages $1,265.69 for the year, the most expensive in the united states. Iowa is the cheapest state at just $599.03 for the year. So, if you are really passionate about car insurance, you can move to Iowa.

How Much Does Car Insurance Cost?

Anyone who is looking for car insurance they will tell you cost is one of the most important factors. Who wouldn’t want to save money when they can? Getting a cheap policy may seem great, but then if it does not provide enough coverage, you may be paying more out of pocket in an accident. You also want to ensure you are not paying for more than you need, if you are a safe driver and have an older car, full coverage might be overdoing it.

Getting rates for your exact rates will depend on a variety of things. Age is one of those that makes a big difference. Drivers the age of 16-25 typically have the highest insurance rates. Here is a comparison on what the average rate per age group.

AgeInsurance CompanyAverage Monthly Rate
18-34Liberty Mutual$114
American Family$120
55+American Family$96
The Hartford/AARP$99
AgeInsurance CompanyAverage Monthly Rate
18-34Country Financial$100
55+The Hartford/AARP$83

These number may change by the car you drive, your record, as well as your location.

Saving Money on Car Insurance

If you have multiple insurances, it may be a good idea to stick with one insurance company, you will most likely get a discount for “bundling”. This discount ranges from 10% – 15%.

There are more discounts out there, and it worth it to search for all of them, even if you already have car insurance. They offer discounts for a lot of things, like save drivers, good students, or safe car. If you have never been in an accident or have never filed a claim, there is a discount for that too. Others may even give you a discount for good credit.

Assessing Car Insurance Companies

Hopefully, now you have an idea of what kind of policy will suit you, and how much you are thinking about paying. Now we want to go over how to find a company that suits your standards. There are three main things you want to look for, stability, licensing, and customer complaints.


A good insurance company will be reliable, and they will be there for you when you need them the most. So, it is important to look for companies that have a reputation of taking care of their customers.

Its important to check for a company’s background and look for reviews to see other people opinions. Another source you can check online are sites that rate businesses. Like the Better Business Bureau, Moody`s and Fitch.

Be sure to look at ratings from at least two agencies. Each agency will rate companies differently, and they will use a different system. Its important to understand what the ratings are, before you get insurance.


When you purchase insurance, you want to ensure that the company is licensed to sell in your state. Each state has their own requirements that insurance companies have to follow. The NAIC or National Association of Insurance Commissioners, keeps track of insurance licenses. They also have reviews so you can see what other people are saying. Each state will have an insurance commissioner that can help you find a company that is reliable.

You can only buy insurance from a company licensed in your state. Providers must meet specific requirements to sell insurance.

Customer and Claim Satisfaction

Customer Satisfaction is the most important factor when looking into car insurance companies. Searching the web will be one of the best ways to see how much someone likes or dislikes a company. There are resources, like a J.D customer satisfaction ranking, as well as forums or even a yelp page. Reading reviews you can understand how a company will handle claims, coverage, and their customer service. It is important to find a company that can empathize with your situation.

Your states commissioner’s website will also keep track of complaints so that would be another good resource to see any bad reviews. Keep in mind, they may only have bad reviews, so be open minded when reading them.

If you go with a large insurance company, you might not have to do much research, but it can be worth your time to do the research. Some of these larger companies may rank lower than others. They may have great marketing, but their customer service may not be up to par.

Providers that are less well known, should be researched. Insurance companies rarely fold, but it can happen, and it has happened before. It is important to ensure the money you are putting into an insurance company is worth it.

If you go with a lesser known provider, you should still do a background check. Insurance companies rarely go under, but it has happened in the past. That’s why research and reviews are so important.

The best reviews can come from people you know, ask around to see how your friends or family like their car insurance.

Best Auto Insurance Companies

If you look at J.D Powers rankings for auto insurance, they base it off customer service, price, coverage and their claims. These are all good points of judgement when it comes to finding the best insurance for you.

Taken from the J.D. Power 2018 U.S. Auto Insurance Study, here is a list of the top 10 insurance companies:

  1. The Hartford
  2. 21st Century
  3. Allstate
  4. Esurance
  5. Liberty Mutual
  6. State Farm
  7. Safeco
  8. GEICO
  9. Progressive
  10. Nationwide

Buying Enough Car Insurance

There is a lot of competition when it comes to providing the cheapest option for car insurance, but policy prices continue to rise and become more expansive. Naturally people want to save as much money as they can, but when it comes to car insurance, it may harm you in the long run.

If you elect to only get minimum coverage, it only comes with liability. This only covers any damage you do to other peoples and their property. It does not cover any of your damages or medical bills if you get hurt. It would have to come out of your own pocket, and it will be very expensive.

Collision and comprehensive coverage cover yourself and your car if you do get into an accident, or if anything unfortunate happens, like getting your car stolen.

If you get involved in an accident, and the other driver has minimum or no insurance, you may have to pay for your own repairs. There are some insurance coverages that do cover situations like those.

If you want to ensure you have medical coverage, medical payment and personal injury protection are good coverages to help you with your medical costs.
If you are only receiving minimum coverage, the only benefit for you, is that it is cheap. Unfortunately, if anything does happen, things will turn expensive really quick. So, it is a good idea to add additional coverage to make sure you will be prepared if anything happens.

Choosing a Car Insurance Agent

If finding the right insurance is difficult, there are people out there who can help you with your insurance needs. Insurance agents can work independently or work with insurance companies, but there are pros and cons. Here we will go over each one.

Captive Agent- This is the most common agent you will come across. They have their own offices and work with a single company. They will be good at going over the policy for that particular insurance company.

Independent Agent- There are agents out there who represent more than one company. They will be good at helping you find out what policies will fit you the best, and help you go through many options.

Broker- Brokers are like a middleman. They are not affiliated with any company, and they can help you find the best policy across multiple companies. They have a lot of training and are able to help you find a good company.

Direct Provider - A direct provider can help you without an agent involved. If you have a company you know you want to use, they would be good to use, as they are the direct expert.

Always Compare

Insurance companies are very competitive, so if you do find a quote, do not jump right in just yet. Taking the quote and comparing it with other insurers will help you get the best rates and the best coverage.

Even if you are not looking for insurance at the moment, it’s always good practice to compare and see what is out there. Rates are always changing; you never know how much money you can save by switching insurance companies. If a company doesn’t suit you one year, they may the next or vice versa. Since insurance companies are always making changes, you should as well, to ensure you are getting what’s best out there.

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