Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health in...

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Reviewed by Jeffrey Johnson
Insurance Lawyer

UPDATED: Jul 14, 2021

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In a nutshell...

  • When buying auto insurance, you can only purchase policies from carriers in the state where your car is registered
  • Price is important but all consumers should compare in-state insurers before choosing a specific quote
  • One of the first requirements on your list should be that the carrier is financially secure enough to pay claims
  • If you’re buying other lines of insurance, it can be helpful to choose a company that sells these products
  • While customer reviews represent individual experiences, customer satisfaction ratings can be extremely useful

Finding a good auto insurance company is far different from finding your favorite local eatery. One of the things that make it such a difficult task is because most people don’t know what to look for.

When you’re scouring the web for restaurants, you’re concerned about:

  • Menu offerings
  • The quality of the food
  • Ingredients
  • Price

Surprisingly enough, some of the criteria that are used to rate a restaurant can also be used to rate an auto insurer.

Many people are willing to pay more for quality meals as long as the flavor and freshness are there. Unfortunately, in the insurance industry, most people put price before everything else.

Some consumers get stuck with sub-par companies providing protection on their vehicles. Compare car insurance quotes right here to find the company that offers you the best rate for the coverage you need.

Don’t Put Price First

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The first rule that you need to follow if you want to do business with a good auto insurance company is that price shouldn’t come first on your list of priorities.

Looking at premiums and only premiums is what will land you in hot water when the time comes to file a claim. Research companies first and then look at the price.

The biggest and most reputable companies don’t always have the most competitive pricing strictly because of how the industry works.

In order to cover claims, a company has to be financially secure. In order to be financially secure, the company has to collect adequate premiums.

Companies that price products too low to attract business are at risk of going bankrupt. This risk is why price should never be your deal breaker.

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Where to Start Your Research

Instead of logging onto the Internet and getting online quotes right away, it’s in your best interest to start researching your options first.

The first step to researching all of the carriers in the industry is to find out which companies do business in your area.

You’re free to choose any licensed insurer that services your area but you can’t choose any company in the US. In order to comply with insurance laws, you must buy insurance in the state where your car is legally registered.

To find a list of the insurers licensed in your state, visit the Department of Insurance website and then click on licensed companies.

Check Each Company’s Financial Stability Ratings

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At the top of your priority list should be financial stability. If you’re doing business with a retailer or a company in the food industry, you probably wouldn’t look into the company’s financial records unless you were going to invest in them.

With an insurance company, they are protecting your assets, so you need to know that they have the money to properly protect you. If the company isn’t stable, you’ll be stuck worrying if they will pay your claims.

You shouldn’t pull up the company’s financial statements and try to read them on your own unless you’re an expert in finance.

It’s best for you to reference the grades assigned to the company by third-party consumer agencies like AM Best or Moody’s.

Typically, companies will rate a company with an A+, A, A-, B, etc. when determining creditworthiness and ability to pay. These guides help you look at the big picture.

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Check the Complaint Index

Official complaints can wreak havoc on a company’s reputation, especially in a competitive industry like the insurance industry. All of the complaints that have been received by the state or by the National Association of Insurance Commissioners is public record.

If you’re worried that a company has a history of taking advantage of its customers, make sure that you check out what shows up on the company’s profile through the NAIC Consumer Information Source tool.

On the tool, you can type in the company’s name and then find out if there are closed or outstanding complaints. You can also see if the company was fined after the claim was investigated.

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Check Each Company’s Customer Satisfaction Ratings

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They say that the best way to choose companies is to learn from other customers’ experiences. If you learn from someone else’s mistake, you don’t have to go through the process of making it.

One of the most reliable places to look at customer satisfaction ratings is by referencing reports from JD Power and Associates. The rankings are based on consumer reports and other surveys that the company gathers.

You can find ratings on how quickly the company settled claims to how happy customers were with customer service. Since you’re paying for good service it’s important to find a company that offers just that.

Find Out If the Company Offers More Products

After you’ve crossed the most important items off of the list, you can start to look at the product offerings of each company. Some insurers licensed to sell car insurance focus solely on that line of insurance.

Other larger companies offer all types of personal and commercial lines of coverage.

You have to assess your needs to determine if it benefits you to do business with a company that does it all.

If you own a house, rent, or need life insurance, building your personal portfolio with the same company could be convenient.

Not only that, but many companies offer multi-line discounts that could save you hundreds.

Not all insurance companies are created equal. To determine if a company is good, you need to do a little homework.

Once you have weeded through the list of options in your state, the next step will be to shop around. Pricing products can be an involved process if you call each company directly.

It’s best to use an online rate comparison tool so that you can find the best deal without wasting a whole bunch of time. Use our free comparison tool right here to get started.