How to choose the right car insurance company
If you’re overwhelmed by the idea of looking for a new insurance company, you’re not alone. When people think about insurance, they usually don’t think “user friendly.” In fact, a recent survey suggests that most people would rather go to the dentist than deal with an insurance company. Combine that with the hundreds of companies to choose from and enthusiastic insurance mascots on every third TV commercial, and it’s no wonder that many people put off the search for a new insurer.
Finding a good insurer is worth it for the peace of mind, though, and it doesn’t have to be overwhelming—especially if you take the time to set your priorities. How do you do that? Here are some questions that can help you determine what’s most important to you:
1. How do you want to interact with your insurance company?
There used to be only one way to get car insurance: find an agent. Luckily, times have changed. Now, you can get car insurance online, over the phone, via an app, or, of course, the old-fashioned way—in person.
So how would you like to interact with your insurer? Do you prefer to have everything you need at your fingertips? If so, look for an insurer that sells insurance online and has a well-designed app. Or maybe you’d rather talk to an agent in person if you have any questions? If you prefer face to face, you’re likely to do better with a company which offers brick and mortar locations with agents.
(If you decide to go the agent route, note that not all agents are created alike. Some are independent and can help you choose a policy from among the offers of multiple insurance companies. Others work for just one company and won’t be able to compare prices or policies for you. The moral of the story? Before you sit down with an agent, make sure you know what kind they are.)
2. How big a factor is price in your decision?
Sometimes budget is the most important consideration—you want the lowest price possible for the coverage you need. In that case, your best bet is to use an insurance shopping site to compare prices for the policy you need. In particular, Gabi can help cut confusion by finding you the best price on an apples-to-apples basis. (Yes, we may be a little biased.)
3. What kind of car insurance company would you prefer?
Broadly speaking, there are three major kinds of auto insurance companies—and you should think about which kind would work best for your life.
Traditional auto insurers - These are the established companies you probably think of when you think of car insurance—think Allstate, Farmers, and Geico. They sell policies via agent or online and are generally available everywhere in the country. However, they usually don’t have the best customer interfaces and are often a step behind when it comes to innovation. Also, pricing isn’t always competitive because of the companies’ size and related operational costs.
Tech-forward insurers - In the past five years, new tech-driven companies—such as Clearcover and Pact—have shown up on the scene with new ideas about how to do car insurance. These companies combine best-in-class technology and great customer experiences with very competitive prices achieved by being operationally efficient. If you’re the kind of person who prefers to make transactions online—and quickly— you’ll probably like this kind of insurance company. However, availability varies by state, so if you don’t live in a covered area you’ll need to look elsewhere (for now).
Usage-based insurers - The advent of mobile phones and GPS have made a different kind of car insurance possible. Companies such as Metromile, Root, and Noblr offer insurance based on how you drive or how much you drive. These companies often compete well on price, but availability is limited to certain states—and if you don’t want to be tracked everywhere you drive (or fly or walk), you may want to choose another kind of insurer.
4. How important are other people’s opinions of the insurance company?
In the age of the internet, you can find reviews of almost everything, including prospective insurers. The question is: how important are those reviews to your decision? Would you pay more, if necessary, to purchase a policy from a company which has better reviews? If online reviews are important to you, you can use services like Trustpilot and Clearsurance to find verified opinions of an insurer.
Another obvious source of reviews are your friends and family. Many people have strong opinions about their insurer (or former insurer) but only you can decide how important those reviews are to your final decision.
Now that you’ve determined what’s important to you in an insurance company and understand how your insurance rate will actually be calculated - you’re ready to narrow the field of potential insurers. It’s time to get quotes!