How to Compare Auto Insurance Policies

If you don't know what to look for, comparing auto insurance policies can be a difficult task. Policies can vary widely from insurer to insurer, and you want to make sure you're getting the best coverage for the best price. Here are some simple tips to inform your auto insurance comparisons.

Premiums

The top priority for most car insurance shoppers is finding a policy with inexpensive premiums. Although it is important to purchase a policy with reasonable rates, you don't want to overemphasize this criterion. The cheapest policy is not always the best value because the savings usually come with a sacrifice in coverage levels or company quality. Set a monthly or yearly auto insurance budget before you begin shopping to help you decide which premiums you can afford. To get the best premiums, you will want to get quotes from at least two or three different insurers.

Coverage Levels

When doing car insurance comparisons, you want to be sure that you are comparing apples to apples. In other words, you can't compare policies directly unless they have comparable coverage levels. The policies you compare should all include the same coverages and the same coverage limits. Be wary of policies that include just the bare minimum level of coverage required to comply with your state's laws. These kinds of policies could put you on the brink of bankruptcy if you are involved in a serious accident.

Additional Coverages

Pay close attention to what coverages are included in a standard policy from your prospective insurers. If some coverages that you want are not included, find out what it would cost to purchase these additional coverages. Such coverages might include rental car reimbursement, CD/audio equipment protection, roadside assistance, and towing coverage.

Customer Satisfaction

Another good way to compare auto insurance is to look at the company's customer satisfaction ratings. You can do this by either asking friends and family for their experiences with the company or by visiting your state's department of insurance website. This site will contain valuable information about customer complaints for various insurers.

Company Health

Obviously, you want to select an auto insurer that will actually be able to pay your claim if you ever file one. To compare the financial health of prospective insurers, consult an index like Moody's or Standard & Poor's. These indexes will tell you how the company is currently performing financially and how it is expected to perform in the future.