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How to choose the best car insurance company

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Across the country, car insurance rates are rising due to inflation, changing driving habits and disrupted supply chains. As a result, you may be more inclined to shop your auto insurance policy to find a cheaper rate. However, it can feel daunting to determine which carrier best fits your needs with hundreds of companies to choose from.

You may worry about choosing a company and having a bad claims experience. You may worry about your rates increasing even after you change companies. And what happens if you choose coverage types and levels that aren’t right for your situation? Insurance can be complex, but you can learn how to find the best car insurance company for your needs. Bankrate is here to help.

How to choose the best car insurance company

Although almost every state legally requires drivers to carry auto insurance, 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 drivers. 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.

Rankings such as ones from J.D. Power provides independent, unbiased ratings regarding the customer 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. Thinking about how you prefer to interact with your carrier — by mobile app or online portal, phone or in person — may help you find companies that offer those services.

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 be 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.

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Written by
Cate Deventer
Insurance Writer & Editor
Cate Deventer is a writer, editor and insurance professional with over a decade of experience in the insurance industry as a licensed insurance agent.
Edited by
Managing Editor
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Part of  Finding The Best Car Insurance