Car insurance is one of the most important parts of your financial portfolio, but how do you make sure you choose the best company for your needs? You may think that all car insurance companies are essentially the same, but that’s not the case. While most companies offer the same basic coverage types, things like customer service ratings, financial strength, endorsement offerings, available discounts and digital tools can set a company apart from its competitors. Bankrate can help you learn how to differentiate auto insurance companies so you can choose one that fits your unique situation.

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How to choose the best car insurance company

Almost every state requires drivers to carry at least a minimum amount of car insurance, but drivers can obtain more coverage for better protection. The company you choose, the coverage types you select and the coverage levels you purchase are personal to your situation. Every driver has unique needs, but insurance carriers also have different strengths. When shopping for the best car insurance company for your unique circumstances, there are numerous factors to consider, and the emphasis placed on each factor depends on what you need as an individual. Bankrate can show you how to navigate the car insurance shopping process.

1. Determine your unique needs

To choose the best car insurance company, you must first determine your unique needs and financial situation. Evaluating your circumstances may help narrow down the selection of carriers and help you focus on one offering the coverage options you need.

For example, if you are a defensive driver, you might want to look for a carrier with a telematics program. These programs track your driving and may reward safe habits with a personalized discount. As long as you drive safely, this could help mitigate the rising car insurance rates that many drivers are facing.

Households with teen drivers might want to seek insurance providers with discounts or programs geared specifically toward young adults. If you prefer to keep your insurance as simple to manage as possible, finding a company that offers numerous products could help you bundle more policies together. There are endless combinations of personal criteria for an auto insurance company, and understanding your unique perspective could help you figure out which companies to research more deeply.

2. Find insurance providers that meet your requirements

Once you know your needs, you can begin seeking out insurance companies that might align with your circumstances. You may find that some of the largest car insurance companies, which may be available across much of the country, could be good options. Or you might opt for smaller car insurance companies, which tend to be more regional. Researching the companies that offer coverage in your area can help you ensure your carrier aligns with your needs.

If finding a cheap car insurance company is one of your priorities, you may want to spend some time analyzing discounts. Most companies offer at least a few auto insurance discounts but finding a carrier that has several savings opportunities that you qualify for might help you control your premium.

3. Check trusted third-party ratings

You can use verified third-party ratings available to take the guesswork out of finding companies with strong customer service and financial strength ratings. Using third-party data in your research provides a more well-rounded approach to choosing a provider and gives you unbiased data for your review.

Customer satisfaction rankings, such as those from J.D. Power, provide independent, unbiased ratings regarding the experience with popular car insurance providers. AM Best is another example of a third-party company that further analyzes an insurance carrier’s performance. Specifically, AM Best reviews a carrier’s historical financial health and strength, which may give you peace of mind if a carrier has a track record of paying claims.

4. Consider the experience

Another aspect worth considering in your search is how you will interact with a company once you’re a policyholder. Some people may want to use a mobile app or online portal, while others prefer speaking to representatives over the phone or visiting a local agent.

If you like to handle things digitally, for example, choosing a company with a robust digital app that lets you pay bills, request changes and file claims could lead to your continued satisfaction with company interaction. Wanting digital tools and choosing a company that doesn’t offer an app or online portal could lead to dissatisfaction.

5. Compare insurance quotes based on coverage

The average cost of car insurance can vary drastically from one carrier to another based on a variety of rating factors, including the type of vehicle you drive, your driving history and the specific coverage you choose. Comparing carriers highlight the difference in rates, but it also shows which carriers offer the coverage options and discounts you are looking for based on your needs. Be sure to compare quotes based on the same types of coverage and levels to know you are getting the most accurate representation of cost. Comparing a minimum coverage policy with low liability limits to a full coverage policy with higher liability limits won’t actually help you determine which is cheaper since you aren’t comparing the same coverage levels.

If you aren’t sure how much car insurance you need, working with an insurance agent can be helpful. A licensed insurance agent can listen to your situation, understand your circumstances and recommend appropriate coverage types and levels. Once you are confident in the coverage types and levels you need, you can match those levels across all the quotes you request. Keep in mind that some companies may not offer certain endorsements, so you might not be able to get your quotes exactly the same.

The bottom line

Shopping for car insurance can feel intimidating, but it is often a good strategy to align your coverage and company with your needs. Additionally, shopping around could help you understand what a competitive rate for your policy looks like and might help you find cheaper coverage. The key to finding the right company for you is to understand your needs, do your research and compare quotes across a range of metrics. When in doubt, working with an insurance agent could help you navigate the process.

Frequently asked questions

    • While Bankrate has done the legwork and identified the best car insurance companies, our list is only a starting point. Take some time to consider what’s most important to you, as well as what could affect your rates. If you’re adding a teen driver to your policy, for example, you might need to look for carriers that offer affordable premiums and extra discounts tailored to young drivers. To find the right company for you, it can be helpful to consider more than a carrier’s rates and also research things like each company’s financial strength ratings, customer service reviews and available coverage options.
    • In most states, if you own a vehicle, you have to buy a car insurance policy that meets or exceeds your state’s minimum car insurance requirements to drive legally. However, because state minimum coverage does not include coverage for your own vehicle, you’ll likely be required to buy a full coverage policy — which includes comprehensive and collision — if you have a loan or lease on your vehicle. Most insurance professionals advise that you buy higher-than-minimum liability limits, too, to help protect your finances from the fallout of accidents. If you aren’t sure how much coverage you need, you could work with an agent to determine the proper amount.
    • Comparing quotes can help you understand what your car insurance is likely to cost and can help you identify what a cheap rate means for your circumstances. Another strategy is to take advantage of auto insurance discounts, which can help you lower your insurance premium. Finally, one of the most impactful ways to keep your rates low is maintaining a clean driving record. Driving incidents like accidents, tickets and DUI convictions usually raise rates, so practicing safe driving and avoiding these situations can help you avoid the surcharges that come with them.