Cars and Trucks

Car Insurance Companies: Everything You Need to Know

Car insurance companies provide customers with insurance coverage for their vehicles at a reasonable price. The best car insurance companies put their customers first by providing hassle-free ways to manage policies, make payments, and file claims.

What to Consider When Choosing a Car Insurance Company

Every major car insurance company provides the three basic types of car insurance: liability, collision, and comprehensive. Many drivers tend to go with the car insurance company that charges the lowest rates. However, cost isn’t the only factor that you should consider when choosing an insurance company. You should also look at a company’s customer satisfaction ratings financial strength. As NerdWallet points out, companies that charge higher rates tend to provide superior customer service and nonstandard coverage options for drivers with unique needs. You can find a balance between quality coverage and price by comparison shopping and researching discounts.

If you’re trying to decide between car insurance companies, NerdWallet recommends that you do the following:

  • Visit the insurance commissioner’s website for your state. You can see if anyone has filed complaints against a particular company and access vital information like the company’s financial strength.
  • Ask questions. When you contact an insurance company for a quote, the representative should be able to answer your questions with transparency. Asking questions ensures that you get the coverage you need without any extras that you don’t want.
  • Consider smaller companies. A smaller car insurance company can often provide the right balance of quality coverage, reasonable rates, and personalized service.
  • If you have any tickets, DUIs, or other violations on your driving record, consider waiting before you try to purchase insurance. Most companies will drop surcharges for drivers who keep their records clean for at least three years after their last violation.

    Car Insurance Company Ratings

    Various market research companies and consumer groups provide ratings of the country’s leading car insurance companies, making it easy for consumers to see which companies come out on top in terms of customer service and other factors. According to Policygenius, J.D. Power collects data from thousands of car insurance policyholders every year to see how well various companies settle claims. A company’s overall performance is ranked on a 1000-point scale. In the latest J.D. Power study, the following companies earned the highest scores for claims satisfaction:

    • NJM Insurance Company – 909
    • Amica Mutual – 907
    • USAA – 890
    • Erie Insurance -880
    • GEICO – 871
    • Country Financial – 863

      A.M. Best is another company that rates car insurance ratings. According to ValuePenguin, the company grades each provider by its financial health and creditworthiness. Financial strength is an important factor because financially healthy companies have a greater ability to pay claims. Here are the designations that A.M. Best uses:

      • Superior (A++, A+)
      • Excellent (A, A-)
      • Good (B++, B+)
      • Fair (B, B-)
      • Marginal (C++, C+)
      • Weak (C, C-)
      • Poor (D)

        Yet another rating that you should check out when purchasing insurance is the Consumer Reports Reader Score. Companies are given a ranking on a scale from 1 to 100, with 80 indicating that policyholders are “very satisfied.” According to Policygenius, the Consumer Reports Reader Score is based on:

        • How courteous agents are towards customers
        • How easy it is for a policyholder to reach their agent
        • How simple the claims process is
        • How promptly the company responds
        • How flexible the company is in dealings with policyholders

          Finally, Policygenius recommends that consumers consult the Better Business Bureau (BBB) when shopping for insurance. The BBB grades a variety of businesses, including car insurance companies, using reviews and complaints sent in by customers. While the BBB’s ratings are restricted to local branches of a company instead of nationwide, they can still give you a good idea of what you might experience when doing business with a particular company.

          Discounts

          The best car insurance companies are willing to provide discounts that will offset the costs of a premium. While many discounts are common across the car insurance industry, the amount of a discount may vary from company to company. You should compare discounts the way you compare quotes. ValuePenguin recommends that you ask your insurer about the following types of discounts:

          • Good Student Discount – If you have a teen driver or college student on your policy, they can qualify for a good student discount if they maintain a 3.0 GPA or higher.
          • Bundling Discounts – Many companies provide a discount if you buy your home insurance, car insurance, and life insurance from the same company.
          • Affiliation Discounts – If you’re a member of a professional organization or another group, this affiliation may qualify you for a discount.
          • Upfront Payment Discount – If you pay for your entire premium upfront instead of making monthly installments, your car insurance company won’t charge you a convenience fee.
          • Safe Driver Discount – Some car insurance companies provide policyholders with a plug-in device or mobile app that tracks driving habits. If the tracking shows that a driver has safe habits, they’ll qualify for a discount.

            Car Insurance Coverage Options

            When shopping for car insurance, you don’t only have to decide which company is right for you, but you also have to decide what type of coverage you need. According to NerdWallet, these are the types of insurance you should consider:

            • Liability Coverage – Most states require you to carry a minimum amount of liability insurance. If you’re deemed responsible for causing an accident, liability insurance will pay for the other driver’s vehicle repairs and medical care. You might want to purchase more than your state’s minimum. Otherwise, you could end up paying out of pocket if costs exceed your coverage.
            • Collision Coverage – Collision coverage pays for damage that your own vehicle sustains in an accident. While this type of insurance isn’t required by law, your lending company may require you to carry it if you’re financing or leasing your car. You can lower your collision coverage premium by setting a high deductible.
            • Comprehensive Coverage – Like collision coverage, comprehensive coverage is often required by lending companies. Comprehensive car insurance covers damage to your vehicle caused by hurricanes, tornadoes, fires, falling objects, and vandalism. You can also use comprehensive coverage to replace your car if it’s stolen. This type of insurance also costs less if you set a high deductible.

              Now that you know what to look for when choosing a car insurance company, you can decide what company is right for you. You’ll have the confidence to get the coverage you need while saving money.

              Sources:

              The Best Car Insurance Companies for 2021

              Best car insurance companies in 2021

              The 7 Best Car Insurance Companies (2021)

              What Is the Best Car Insurance?

              What Does Liability Car Insurance Cover?

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