UPDATED: Mar 13, 2020
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Today, it’s easier than ever to compare auto insurance quotes. With a few seconds of searching, you can find dozens of quotes from insurance providers in your area.
But how do you actually compare two different auto insurance quotes? What’s the difference between a good auto insurance quote and a bad one? How can you tell if one auto insurance company is legitimate and another is average?
Today, we’re explaining our favorite tips for comparing auto insurance quotes.
Compare Quotes Online for Free Just by Entering your ZIP Code
First, enter your ZIP code into an online car insurance comparison form. In exchange for submitting your ZIP code, you can view instant rate offers from insurance providers in your area.
There’s no hassle or obligation. You simply enter your ZIP code, and that’s it. You can choose to research individual quotes or not.
Sometimes, you’ll see a general price range for auto insurance policies in your area. At the very least, you can see the names of companies offering auto insurance in your region.
Take note of a few companies that look good. Then, you can start comparing companies with more important metrics.
Request a Customized Quote from Five Different Insurance Companies
The prices you see initially will be based exclusively on your ZIP code. The insurance company might assume you’re the safest and most experienced driver in the world on your initial quote request, for example, to dazzle you with lower prices.
To get a more accurate idea of which insurance company is best for you, complete the quote request form. Enter your unique demographic data or personal information into the form. Tell the insurance company your age, gender, driving record, and other information.
Without entering your personal data, you’re comparing apples to oranges. Ideally, you want to compare identical car insurance quotes to one another.
Verify Coverage Conditions and Compare Identical Policies
After entering your personal information, you might assume the car insurance quotes are all identical. However, different car insurance companies have different standard policies.
Car insurance can also vary based on your coverage limit. Some policies have $100,000 of coverage, for example, while others have $1 million.
Make sure the quoted price you see from each insurance company matches your insurance needs.
Your goal is to compare identical car insurance policies with one another.
Check J.D. Power Rankings
J.D. Power is one of the leading research companies in the car industry. They’re best-known for ranking new vehicles, but they also conduct comprehensive rankings for car insurance companies.
Every year, J.D. Power publishes two studies on car insurance, including:
U.S. Auto Claims Satisfaction Study: How easily were customers able to process an insurance claim? Were policyholders satisfied with the claims process overall?
Insurance Shopping Study: How competitive were the insurance company’s prices? How easy was the shopping experience for customers?
The company publishes these studies nationwide. They also publish reports for individual regions or states, including unique reports for California, Central, Florida, Mid-Atlantic, New England, New York, North Central, Northwest, Southeast, Southwest, and Texas.
Check out the latest J.D. Power rankings here.
Certain companies consistently rank better than their competitors in terms of claims satisfaction and insurance shopping.
In the 2018 study, for example, only three car insurance companies received a perfect five-star score for overall satisfaction, while only two companies received a four-star rating:
J.D. Power Claims Satisfaction Rankings (2018)
You can view the 2018 J.D. Power claims satisfaction rankings here.
Five Stars: Erie Insurance, USAA, and Amica Mutual
Four Stars: Auto-Owners Insurance and Farmers
Three Stars: Auto Club of Southern California Insurance Group, The Hartford, Travelers, State Farm, Nationwide, GEICO, Allstate, Automobile Club Group, MetLife, 21st Century, American Family, Esurance, Progressive, and Safeco
Two Stars: Liberty Mutual, CSAA Insurance Group, MAPFRE Insurance, and Mercury
J.D. Power Insurance Shopping Rankings (2019)
You can view the 2019 J.D. Power insurance shopping rankings here.
Five Stars: Erie Insurance
Four Stars: USAA, Amica Mutual, Auto-Owners Insurance, Auto Club of Southern California Insurance Group, Esurance, Safeco, and American Family
Three Stars: Automobile Club Group, CSAA Insurance Group, Travelers, Liberty Mutual, GEICO, State Farm, The Hartford, Allstate, Farmers, MetLife, and Progressive
Two Stars: Nationwide
J.D. Power’s rankings aren’t perfect: the company only polls about 15,000 policyholders across the United States. However, it’s an easy way to get at-a-glance information about the top companies in the car insurance industry.
Check Complaints About Each Car Insurance Company Using the NAIC
As you narrow down your list of car insurance providers even further, it’s time to check the number of complaints each car insurance company has. The National Association of Insurance Commissioners (NAIC) tracks this data.
On the right side of that page, type in the name of an insurance company, then select ‘property/casualty’ to find complaints about a specific home or car insurance provider.
The NAIC offers two helpful types of complaint reports, including:
Closed Complaint Counts by Code: The reasons complaints were filed against a particular car insurance company.
Closed Complaint Ratio Report: The number of complaints adjusted by market share. A larger company will inevitably get more complaints than a smaller company, so checking the ratio can be helpful.
You can check complaints for each year. Scan through the list of complaints to see how a particular insurance company is dealing with customer claims. You can view the following information:
- Reason for the complaint
- Complaint by type of insurance (commercial vehicle or private passenger vehicle insurance, for example)
- A description of what happened
- The top complaints against car insurance companies typically involve one of the three following circumstances:
- Delay in handling a car insurance claim
- Denial of a claim
- Unsatisfactory claim settlement offers
However, you might also find insurance companies with complaints about unusual things, including complaints about canceling policies and not renewing them, charging extra fees, giving customers trouble with premiums or billing, or providing inadequate responses to questions.
Check for Car Insurance Discounts Unique to Each Insurance Company
Do you qualify for any unique discounts from a particular insurance company? Some insurance companies offer discounts exclusive to that company. USAA, for example, is only available to active duty or retired military personnel and their families, offering steep discounts over other car insurance products.
Other companies specialize in insuring high-risk drivers. If you have a rough driving record, then you might receive a high rate from one company (because that company doesn’t want to insure high-risk drivers).
Some of the discounts that may be unique to a specific insurance company include:
- Complimentary rental car insurance coverage
- Discounts for police officers, nurses, firefighters, doctors, teachers, military personnel, and other professions
- Discounts for good grades or good students
- Discounts for bundling multiple car insurance policies together
- Bundling discounts for those who need home, auto, and life insurance
- And more
Let’s say two car insurance companies are both offering a quote of around $1000 per year. One company provides a discount of 5% for bundling your home and auto insurance together. The other company doesn’t offer home insurance. If all other things are equal (which they should be if you have been following this guide up to this point), then your best option is to take advantage of the company offering the discount.
By doing your homework, you can save hundreds of dollars per year on car insurance. With a few minutes of hard work today, you can compare auto insurance quotes from major providers in your area.
Use the tips above to ensure you get the best deal while comparing car insurance rates between providers.