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How Do I Choose an Auto Insurance Provider?

When it comes to finding auto insurance, there are two things you'll need to choose: your provider and your policy. It's important to not only decide on a policy that fits your needs, but to make sure you can get it through an insurance company you trust.

If you're in the market for new auto insurance, remember that the cheapest provider may not always be the best provider. You'll want to work with a company that offers a good customer experience in addition to good value on coverage.

With that in mind, here are some things to consider when picking out your new provider.

What to Look for in an Auto Insurance Provider

Just like any other service, you'll want to research your car insurance provider prior to signing up. Finding a company you're comfortable with could make a big difference even if you never need to file a claim down the line. Things like how a company views your driving history and sets your premium, as well as whether it's able to provide any discounts, can all make a difference in your overall satisfaction.

As you conduct your research, build a list of pros and cons for each provider. In addition to doing your own assessment of the way a company does business, read customer reviews and look at ratings published by companies such as J.D. Power and Associates. Reviews and ratings can help you understand if the provider you're interested in has a good track record of dealing with customers.

Here are a few more things to do when shopping for an insurance provider:

  • Read what the experts are saying. Beyond J.D. Power and Associates, the auto insurance industry is carefully studied by expert reviewers and publications that work to point consumers in the right direction. These industry watchers look at each provider and may calculate a score or rank to tell drivers how it stacks up against the competition. Some even go as far as ranking by state, type of coverage or specific insurance needs (such as insurance for new drivers).
  • Look into records of complaints. Each state has a department of insurance, and many keep a public tally of how many complaints are made about insurance companies operating there. When looking into an insurance provider, see what these complaints can tell you about the company. To easily view the number of complaints against a provider, you can also use this tool from the National Association of Insurance Commissioners.
  • Contact providers and ask questions. One of the best ways to learn about a provider is to call them directly and ask questions. Doing this could help clear up any uncertainty and will also show you what it's like to contact and interact with someone from the company. Being able to quickly and easily communicate with your insurer is critical, and this call could help you get an idea of how future interactions could go.
  • Check licenses and finances for smaller companies. Another way to research an insurance provider is by validating that they have all their licenses and looking into their financial stability. Checking that a provider is fully licensed can give you peace of mind that the company is operating above board. And a look at a company's financial stability can provide some assurance they'll be able to pay out claims and cover you for the long term. You can check that a provider is fully licensed by contacting your state's department of insurance and you can see a company's financial strength on rating websites such as Standard & Poor's or Moody's.

What Type of Coverage Do I Need?

Even before you research providers, you'll want to have an idea of the type of coverage you want and need. If you've previously carried car insurance, try to recollect the features of that coverage you liked and put those on the list of desires for your new policy. If there were aspects of a past policy you didn't use or now think were a waste, consider avoiding those when picking your new plan.

As you research providers, keep the list of desired features in your head, because some companies may be more experienced with certain services than others. If there are coverage features you feel strongly about (rental car coverage, for example), make sure that's something a provider offers before getting too far along in the process.

How Do I Sign up for an Insurance Policy?

Shopping for auto insurance has changed over the years, and more insurers are now allowing customers to sign up directly over the internet. In the past, if you were looking for an insurance policy, you most likely would deal with an agent or broker who would guide you through the process and find the policy that was right for you.

While you can now manage the process yourself by working directly with a provider, you can still choose to work with an agent or broker if you prefer. Both options offer different benefits, and who you work with will be based on your individual preferences and needs.

Here are three popular routes you can take to lock in a policy and provider that's right for you:

  • Work with an independent broker. An insurance broker maintains relationships with multiple insurance agencies and can connect you with the one that provides the right policy for you. Essentially, brokers serve as mediators between you and the provider.
  • Work with an agent. You may find a provider you like but aren't comfortable signing up for coverage unassisted. By contacting the company, you can talk to an agent who works as a liaison between the company and its customers. An agent may ask questions about you and your situation in order to adapt your plan accordingly.
  • Sign up directly with a provider. Many providers now offer an option for customers to sign up for insurance right through their website. This option could be good for someone who already knows what they want and is comfortable managing the process by themselves.

Choosing the Right Car Insurance Provider Pays Off

Once you've thoroughly researched the providers in your area and have narrowed your selection to just a few, start looking at their coverage options and consider getting a few rate quotes. Once you've gotten a quote from one provider, you should then try to find out if another could get you a better deal for similar coverage. Alternatively, you could reach out to an insurance broker to see what type of policy and rate they can find you.

Remember that insurance providers may use your credit score when deciding whether to offer you coverage or to calculate your rate, so if you want to get the best deal, you should first make sure your credit is in check. To find out more about your credit, you can get a free credit monitoring of your Experian credit report and FICO® Score . That way, you can see what insurance providers will look at when considering your application and work to improve it if necessary.