How to Pick the Best Car Insurance Policy

Let us start by mentioning that there is no such thing as “the best car insurance policy”. Different people have different needs and we all evaluate insurance policies by our own subjective views. The best coverage, in the sense of this article, is defined as a compromise between price, degree of protection, reputation of the insurer and the quality of their service. Let us see how each of these add up towards choosing which company to sign a contract with.

Price

For many (unadvised) buyers, price might be the only factor. With the never-ending economical crisis, we all want to get the best service for the money spent. However, price isn’t the only factor to take into account. Had a Mercedes been only 5% more expensive than an Oldsmobile of the exact same class, which one would you go for? … Thought so. You shouldn’t be compromising on quality and comfort for the sake of a few dollars saved.

Degree of protection

In other words, what exactly do you need? There are many insurance packages available, so make sure you are going to compare apples with apples. If your neighbor pays $4,900 for Collision with GEICO and Allstate just offered you $1,200 for Liability it doesn’t mean that one of them is cheaper than the other.

On the other hand, you have to make sure that the company you are going to sign a contract with can offer the coverage you need. All mainstream carriers offer Liability, Collision and Comprehensive, but if you need, let’s say, a custom medical insurance package you may have to do some research.

Reputation of the insurer

The reputation of an insurance company is given by their financial rating and customer evaluations. Financial scores are offered by companies like A.M. Best or J.D. Power, which are independent evaluators who analyze a company’s ability to meet their contractual terms. Customer evaluations – provided by services like Consumer Reports – show you how buyers like that company based on factors like the range of offerings, the price versus quality rate, the billing policies and how the customer support department works.

You will need an insurer with a good reputation, in other words, excellent auto insurance ratings so that you can rest assured that there will be someone there to help you out in case you have a claim. Rather than signing a contract with a shady company who might run off with your money or solve your fender bender claim in half a year, you will want to pay an extra $200 and go with a reputable carrier.

As outlined above, the quality of service is a crucial factor. You have to analyze a handful of criteria:

• How does the company handle their claims? Are there any known complaints for stalling claims or denying payments for absurd reasons? If so, can you afford to take the chance?
• How does their support department work? Is there a toll-free number where you can talk to a representative at any time of day or night? If you have an accident on an interstate at 2:30am will there be someone to pick up the phone if you need towing services?
• What methods of payment do they accept? The more, the better! Don’t just rely on mailing in a check when the payment is due – you could be out of town, postal services may go on strike or it could be that you don’t have enough money in your checking account. Credit card and ACH are a minimum must.