How to Choose an Auto Insurance Policy in 2024 (Easy Steps to Follow)
To choose an auto insurance policy, consider factors such as price, coverage needs, and the insurance company you choose. Find rates as low as $22 per month when you compare multiple companies by their quotes, customer service ratings, and financial stability.
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Tim Bain
Licensed Insurance Agent
Tim Bain is a licensed insurance agent with 23 years of experience helping people protect their families and businesses with the best insurance coverage to meet their needs. His insurance expertise has been featured in several publications, including Investopedia and eFinancial. He also does digital marking and analysis for KPS/3, a communications and marking firm located in Nevada.
Licensed Insurance Agent
UPDATED: Aug 30, 2024
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
UPDATED: Aug 30, 2024
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
On This Page
The way you choose an auto insurance policy is by focusing on affordability, good customer service, and efficient claims handling.
When choosing an auto insurance company, the goal is to see past the gimmicks to the real information that will help you make this important decision. By doing a little research, and knowing what to look for, you’ll be able to find a company you can feel confident about.
To get free online auto insurance quotes, enter your ZIP code above.
- Step #1: Consider the Price – Assess policy costs based on vehicle and age
- Step #2: Check the Insurer’s Licensing – Verify the insurer’s state authorization
- Step #3: Evaluate Customer Service – Review customer service responsiveness
- Step #4: Assess Financial Stability – Check the insurer’s financial strength
- Step #5: Match Coverage to Your Needs – Find coverage that meet your needs
Step #1 – Consider the Price
Price is most likely going to be one of your main concerns when purchasing auto insurance. Depending on the type of vehicle you have, your age, and several other factors that affect auto insurance rates, you may end up spending quite a bit on auto coverage.
Minimum Coverage Auto Insurance Rates by Provider
| Insurance Company | Monthly Rates |
|---|---|
| Allstate | $61 |
| American Family | $44 |
| Farmers | $53 |
| Liberty Mutual | $68 |
| Nationwide | $44 |
| Progressive | $39 |
| State Farm | $33 |
| Travelers | $37 |
| USAA | $22 |
| U.S. Average | $45 |
While insurers usually use the same calculation factors, rates can vary greatly from company to company. In some states, the Department of Insurance publishes a guide that lists average rates for each part of the state. Use this guide to get an idea of how much auto insurance costs where you live.
Also, check insurance company websites for information. When you have the list of potential insurers narrowed down to three or four, call for detailed quotes specific to you and your situation.
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Step #2 – Check the Insurer’s Licensing
It may surprise you to know that not all the best auto insurance companies are licensed in every state.
Although you may see a television ad for a company, it may be because the ad is broadcast on a cable channel that reaches a wider audience than a local network affiliate.
When researching rates, check the company websites for a list of states where they are licensed to make sure their services are available to you. You may also be able to get this information from your state’s Department of Insurance. You can also call the company and ask them whether they’re licensed to issue policies in your state.
Step #3 – Evaluate Customer Service
This can be tough to gauge before you actually become a policyholder. You can’t know how your insurance company will perform in the event of an accident before it happens.
There are a couple of ways to determine whether a company provides good customer service. First, check with the Better Business Bureau to see if any of the insurance companies licensed in your state have complaints against them.
It’s not uncommon for any business to have a few complaints, but if the number is high and the complaints all seem to be about the same issues, that’s a red flag. For example, a company like USAA is often recognized for its reliable customer service.
Check out our ranking of auto insurance companies with the best customer service to learn more.
Also, talk to family members, friends, neighbors, and coworkers. Ask them which insurance companies they’re with and whether they’ve been satisfied with the service they’ve received.
Finally, when you do call for an auto insurance quote, take note of whether the customer service representative is polite, helpful, and knowledgeable. That phone call can be an indication of what kind of service to expect as an auto insurance policyholder.
Step #4 – Assess Financial Stability
The reason you buy auto insurance is to be reimbursed for damage to your vehicle, medical expenses, and other potential financial losses that can result from an accident.
No matter how broad the coverage of your policy, it won’t do you any good if the company you choose isn’t solvent. Check the financial news and use ratings established by independent rating agencies to determine which companies are the most financially stable.
Read More: How to Research Auto Insurance Companies Before Buying
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Step #5 – Match Coverage to Your Needs
You should also consider what coverages you need for yourself and how much they’ll cost.
Types of Auto Insurance Coverage
| Coverage Types | What They Cover |
|---|---|
| Classic Car | Protects classic vehicles with agreed value coverage |
| Collision Coverage | Pays for vehicle damages after a collision |
| Comprehensive Coverage | Covers damages from non-collision events |
| Gap Insurance | Covers the difference between loan balance and market value |
| Liability Coverage | Covers damages and injuries you cause to others |
| Medical Payments Coverage | Pays for medical expenses after an accident |
| New Car Replacement | Replaces your new car if totaled in the first year |
| Personal Injury Protection (PIP) | Covers medical expenses and lost wages after an accident |
| Rental Car Coverage | Pays for a rental car during vehicle repairs |
| Roadside Assistance | Provides help if your car breaks down |
| Uninsured/Underinsured Motorist Coverage | Protects you in an accident with an uninsured driver |
For example, full coverage auto insurance covers your vehicle and the other party’s vehicle, but it costs more than liability-only coverage.
However, liability-only doesn’t cover your vehicle, so it offers little protection. Consider your needs and budget while shopping for different types of auto insurance coverage.
More About What to Look for When Shopping for Car Insurance Coverage
After you’ve gathered all the data, the statistics, and the feedback from raters and people you trust, the final question to ask is, do you feel comfortable with the company you’ve chosen?
If you talked to an agent, either on the phone or in person, did you get a good feeling from them? Were they direct and honest? Did they answer your questions and provide you with the information you needed? Learn how to find auto insurance agents in your area in our guide.
Accidents don’t just happen during business hours. Will the company be there for you anytime you need them?
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— AutoInsurance.org (@AutoInsurance) April 10, 2023
If you can answer yes to all of these questions, you’ve found the insurance company that’s right for you. If you haven’t found one yet, keep looking. Enter your ZIP code into our free rates tool below to compare online auto insurance quotes now.
Frequently Asked Questions
How do I choose an auto insurance policy?
We often get the question, “What six factors should you consider when you are buying auto insurance?” When choosing an auto insurance policy, it’s important to consider the following six factors such as:
- Auto insurance types
- Deductible amounts
- Premium costs
- Customer service reputation
- Financial stability of the insurance company
By carefully evaluating these factors and considering any additional benefits or discounts offered, you can confidently choose an auto insurance policy that best suits you.
What are the three typical requirements in an insurance policy?
The three typical requirements in an insurance policy are proof of insurability, payment of premiums, and adherence to the terms and conditions outlined in the policy agreement.
What are at least five factors to consider when selecting an insurance company?
Consider the company’s financial stability, customer service reputation, range of coverage options, pricing and discounts, and claims handling process.
What are the four recommended steps for comparing car insurance quotes?
To compare car insurance quotes, follow these steps: gather your personal and vehicle information, use online comparison tools, review coverage details, and check customer reviews and company ratings.
What types of coverage options are available in auto insurance policies?
Auto insurance policies often include a variety of coverage options; these are the five most common:
- Liability auto insurance covers damages you cause to others.
- Collision auto insurance covers damages to your vehicle in an accident.
- Comprehensive auto insurance covers damages from non-collision incidents like theft or natural disasters.
- Personal injury protection (PIP) auto insurance or medical payments coverage pays for medical expenses for you and your passengers.
- Uninsured/underinsured motorist coverage protects against accidents with drivers who have insufficient or no insurance.
Understanding these coverage options empowers you to tailor a policy that perfectly fits your lifestyle.
Which type policy is best for car insurance?
We often get the question, “What’s the best car insurance coverage to have?” You should always carry liability insurance when you drive. It’s also important to consider full coverage to protect your own assets too.
Is $300 a lot for car insurance rates?
Yes, a $300 monthly car insurance premium is high. Consider shopping around and comparing quotes for lower rates.
What are three factors that lower your cost for car insurance?
Factors that can lower your car insurance cost include maintaining a good driving record, qualifying for discounts such as bundling policies, and choosing a higher deductible.
How do deductible amounts affect auto insurance policies?
An auto insurance deductible is the amount you’re responsible for paying out of pocket before your insurance coverage kicks in. Higher deductibles generally result in lower premium costs, but it’s important to choose a deductible amount that you can comfortably afford in case of an accident or damage to your vehicle.
How can I determine the premium costs for auto insurance policies?
Premium costs for auto insurance policies depend on various factors, including your driving history, age, location, type of vehicle, coverage limits, and deductibles. Insurance companies use these factors to assess the risk associated with insuring you and provide you with a premium quote.
You can obtain quotes from different insurance companies to compare and find the best price.
How can I assess the customer service reputation of an insurance company?
To assess the customer service reputation of an insurance company, you can research online reviews and ratings from reputable sources. Look for feedback on the company’s claims handling process, responsiveness to customer inquiries, and overall customer satisfaction.
Additionally, you can ask for recommendations from friends, family, or colleagues who have had experiences with the insurance company.
What car insurance is most basic?
Liability car insurance is the most basic form of auto insurance, since it only covers damages to others in accidents you cause.
Do I need uninsured motorist coverage?
Not all states require uninsured motorist coverage, but it’s an excellent coverage to have for protection against uninsured drivers (Read More: Best Uninsured and Underinsured Motorist (UM/UIM) Coverage).
What’s the best way to buy insurance?
You can buy insurance directly from a company, work with an independent broker for multiple options, or use a bank or credit union.
What to check in insurance?
When reviewing your policy, check the terms and conditions, coverage details, exclusions, deductibles, your car’s IDV, policy number, duration, and the claims process.
What are the three C’s of insurance?
The three C’s of insurance are Coverage, Cost, and Customer service.
What are the most important things to look for in car insurance?
Important factors to look for include adequate coverage levels, affordable premiums, reasonable deductibles, and a reputable insurer with good customer service. See our ranking of the reputable auto insurance companies for guidance.
Which type of car insurance is cheapest?
Liability coverage is the cheapest form of car insurance because it doesn’t cover your damages. Use our free comparison tool below to see what auto insurance quotes look like in your area.
What are some considerations when buying insurance?
When buying insurance, consider the type and extent of coverage, the cost of premiums and deductibles, the financial strength and reputation of the insurer, and any auto insurance discounts or benefits that might apply to your situation.
Free Auto Insurance Comparison
Enter your ZIP code below to view companies that have cheap auto insurance rates.
Secured with SHA-256 Encryption
Tim Bain
Licensed Insurance Agent
Tim Bain is a licensed insurance agent with 23 years of experience helping people protect their families and businesses with the best insurance coverage to meet their needs. His insurance expertise has been featured in several publications, including Investopedia and eFinancial. He also does digital marking and analysis for KPS/3, a communications and marking firm located in Nevada.
Licensed Insurance Agent
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
