Comparing Competing Car Insurance Companies

It’s easy to to be overwhelmed by a dizzying array of numbers whizzing through your mind in the form of car insurance quotes. And you’ve probably already heard that classic bit of wisdom that says “compare apples to apples and oranges to oranges.” But you also need to consider “what tree” those apples and oranges are growing on.

Comparing rates is surely a big part of comparing companies, but it is certainly not all there is to it. Use an online tool like Car Insurance Comparison to get full information on competing car insurance companies that goes beyond “ just the numbers.”

But you also need to know what to look for and how to utilize all of your resources in evaluating your options.

Here are 4 principles to follow as you search for your best deal on car insurance:

1. Check the Complaint Ratios

Once you have a list of prospects to work on, one of the first steps in the narrowing process is to visit your state’s insurance commission website to view complaint ratios. You could also check with the National Association of Insurance website or Consumer Affairs.

Note you aren’t looking for raw data but ratios since insurers have vastly different sized customer bases. And your goal here is simply to steer clear of those companies with the poorest customer service rather than to get really precise with the exact ratios involved.

2. Take the Company’s “Financial Pulse”

While all 50 states have a back-up fund to cover valid claims after an insurance company suddenly goes broke, you don’t want to rely on that kind of a last-ditch resource.

The same sources (listed above) that give you a car insurance company’s complaint history also give you a run-down of insurers’ financial health. It is always wise to “take a peek” at this vital set of data.

3. Compare With Complete Information

Even when you compare the exact same coverage, unless you enter relatively “complete” information in an online comparison tool, the resulting quotes can be skewed. You may have to dig deeper or call each company up to get a more detailed quote.

For example, some car insurance providers may charge you around twice as much as normal for the same coverage based on a poor credit score. Others may charge students more who have bad grades, a poor driving record, or a DUI.

Gather as much information as possible to conduct a complete comparison, and know which questions to ask insurers about things that could spike your rates well above the initially given quote.

4. Loyalty Should Be Rewarded, Not Punished

Certain insurers practice what they term “price optimization.” This means that they use demographics to speculate on which customers will not leave them if they raise their rates, and then raise them accordingly.

This kind of practice is banned is a number of states, but not in all of them. And it can go on clandestinely too.

Look for companies that lower your rates as a reward for staying with them, if possible, but avoid those that hike them on you because they think they can get away with it.

In Sum

There are numerous other tips we could give out as well, such as avoiding companies whose quotes quickly expire (a high-pressure tactic) or who try to “trap you” or get an extra month’s premium out of you based on tricky cancellation policies.

But the grand lesson is simple: look for a company that not only offers low rates but also “treats you right.”

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