Selecting an insurance company
People use different criteria for choosing an auto insurer. Some base their decision on the opinions of friends, some on marketing and advertising promotions, and others simply on the cost of premiums.
Typically, new auto insurance buyers tend to choose the lowest cost provider, assuming that most providers are essentially the same. As they become more experienced, and after having made a claim or two, they become more wise to other factors that determine a good insurance company.
Eventually, most automotive insurance buyers place the most importance on how companies treat them after filing a claim. Low premiums become much less important if a company won't pay when they should.
What's the problem?
Many thousands of auto insurance customers are happy with their insurers. A significant percentage of those have been with the same insurance company for 15 years or more. However, other customers don't find their companies very satisfactory. The most frequent complaints that customers have with car insurance providers are:
* Refused claims
* Slow adjustment process
* Unsatisfactory payout on claims
* Feel forced to use insurer's repair shop
* Poor repair quality
* High premiums
* Increased premium after accident
* Lack of personal attention or compassion
* Billing, policy, and other non-claim issues
Unfortunately, most of these problems don't surface until after a claim has been filed, when it's too late to find another company.
How to choose the best car insurance company
There are a number of ways you can go about choosing a good insurer.
Research consumer opinions - Consumer Reports magazine frequently surveys readers on auto insurance companies. The last survey results were reported in the March 2006 issue. The survey measures overall customer satisfaction and claim problems. Unfortunately, of 27 companies reported, the satisfaction score difference between the best company and the worst company was only 16 points out of 100. This is hardly enough of a difference to make for a solid decision choice.
JD Power, another well-known research firm, also conducts an annual survey of auto insurance customers, although results are not published in a widely-distributed report. However, it is not difficult to find result summaries on the Internet. Be aware that some of the results you may find are old, outdated reports.
Browse online forums - Consumer forums and automotive discussion boards often have sections in which car insurance is discussed. These sources change frequently and the quality of the information can vary widely, so don't use this as your only research source. Remember that people who have problems are more likely to post comments than those who don't have problems.
Ask repair shop managers - Nobody knows about insurance companies any better than the body shops that have to deal with them. Ask the owner or administrative manager of the shop about which insurers are the best to deal with - which are the least trouble when settling claims and paying for proper repairs. We've seen repair shops in which ratings were actually posted on the wall of the waiting room. Don't forget your car dealer's body shop, if he has one.
Check state government data - Most states have departments that handle complaints against insurance companies. This may be the Attorney General's office of consumer affairs or it may be the office of the Insurance Commissioner. You can often find which companies have the best and worse complaint rates on your state's website. Actually, it may be helpful to look at other state's web sites as well. Just be aware that most state sites are not well designed and it may be somewhat difficult to quickly find the information you need.
Use broker web sites - Insurance broker web sites are one of the best and easiest ways to compare insurance companies online. Brokers work with multiple insurance companies so that they can offer their customers a variety of choices to meet their needs. Some of these broker sites contain comparative information and ratings. We like NetQuote.com, the nation's oldest and largest such company, as well as Insurance.com
After you choose a company
Many of the differences between car insurance companies are hidden in the details of their policies. Before you sign, make sure you read and understand these details. If you have questions or concerns, get it resolved before you sign. Later may be too late.