Tamara E. Holmes
If you’re in the market for car insurance, the good news is that you’ve got plenty of insurers to choose from. But all the extra choices make it a lot harder to decide which car insurer is best for you and your needs.
About 170 auto insurers do business in California alone, according to Tully Lehman, a spokesman for the Insurance Information Network of California. A competitive industry is good news for consumers, since it’s easier to switch insurers if a particular company isn’t meeting your expectations.
When switching insurers or choosing a car insurance company for the first time, follow these seven steps to boost your odds of being happy with your choice.
1. Ask for referrals.
If you’re a new driver buying auto insurance for the first time, ask your parents, other relatives or friends which auto insurance company they use, Lehman suggests. Pay particular attention to the opinions of those who’ve filed claims with the company, since you want to know how responsive the insurer will be if you get into an accident.
2. Check with your state insurance regulator.
One of the best sources of information on insurance providers is your state insurance department. The National Association of Insurance Commissioners can direct you to your state insurance website, where you can find such information as complaints about insurers in your state and tips on shopping for insurance.
For example, the California Department of Insurance provides a list of all insurers that operate in the state, along with a tool for estimating what you might be expected to pay in premiums. Likewise, the state of New York each year ranks auto insurance companies by the percentage of complaints they receive from their customers.
3. Consider your current insurance provider.
If you have renter’s insurance or homeowner’s insurance, you’ll likely qualify for a multiple-policy discount if you buy auto insurance from the same company, Allstate spokesman Justin Herndon says. Since you’re already familiar with the insurance company and are (hopefully) happy with it, you don’t have to worry about buying a policy from an unknown provider.
4. Look to professional ratings.
Third-party organizations often rank insurance companies on the basis of customer satisfaction. Market research company J.D. Power and Associates releases an annual U.S. Auto Insurance Study that rates customer satisfaction regarding interaction, price, policy offerings, billing, and claims and payouts. The study also breaks the results down by region. For example, Erie Insurance ranked first in the Mid-Atlantic region in 2012, while Amica Mutual was the top choice in the Northeast.
5. Look beyond size.
When it comes to auto insurance, one size does not fit all. Large well-known companies aren’t necessarily better than smaller ones, Lehman says.
You should look at each insurer’s record to check whether the company has a bunch of complaints – or a bunch of compliments from satisfied customers. While a large company may have a household name, a smaller, regional company may be able to offer more handholding during a crisis. For example, with a small company you might have an agent who’s part of your community and able to spend more face-to-face time helping you file a claim.
6. Don’t take the first offer.
While an insurer might tell you it’s offering the best rate you can find, don’t take the company’s word for it, says John David, author of “Ten Questions: The Insider’s Guide to Saving Money on Auto Insurance.” Instead, get three quotes and compare them, he says. Also, don’t select your insurance provider based on price alone. Such measurements as satisfaction ratings and complaint ratios give you a more complete view of what an auto insurer can offer.
7. Know your preferences.
Part of your choice should come down to your personal communication style and how you want to interact with an insurer, Lehman says. For example, some insurers may give you access to a face-to-face agent, while others may have you conduct all of your business online. Determine how you want to handle insurance issues and make sure the insurer you choose provides that option.