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The key to finding the cheapest auto insurer


Question: How can I find out which auto insurance company will offer me the best car insurance rates?

Answer: There is no magic way in which to find out which car insurance company will give you the cheapest rates without doing a bit of legwork yourself in the way of comparison shopping with multiple auto insurance carriers.  (See “The best way to save on car insurance")

You may hear from friends or relatives names of companies where they have found the lowest car insurance rates, and you should certainly get a rate quote from these companies. But auto insurance rates have a lot of moving parts, and even a slight change -- say, in your address -- may make the company that was cheaper for your friend more expensive for you.

Each auto insurance carrier rates on the risks you pose. Your age, years of driving experience, driving record, vehicle type, and geographical location are just a few of the risk factors that car insurance companies take into account. (See “Base car insurance rates” for more details on rating factors.)

You answer questions on quote forms or auto insurance applications that help auto insurance companies calculate your car insurance rates.  Each auto insurance company then can weigh the various rating factors differently.  For instance, one minor ticket for speeding may be surcharged (causing you to receive higher rates) with one car insurance company and be totally ignored by another. 

Discounts also vary by insurer. Some may offer you a discount for many items like safety features, anti-lock features, taking a defensive driving course, and setting up automatic payments while others offer little or no discounts.  (See “Your guide to car insurance discounts”)

This is why comparison shopping is so important.  You can find out what car insurance companies will offer your particular risk factors the cheapest possible auto insurance rates.  And, it’s very easy to do. 

By going online you can go to sites like CarInsurance.com that allow you to fill out a quoting form once and receive multiple rate quotes from multiple auto insurance providers.  You no longer have to phone each insurance company separately to get a rate quote. 

Just remember once you find the auto insurance company with the best rates for your needs, to make certain that the company is reputable.  Check its financial strength to make sure is has the finances to pay out claims. 

Look into the company’s customer service reputation as well.  Insure.com has an annual customer satisfaction report and J.D. Power & Associates have a customer service satisfaction database that you can check to make certain the company takes good care of their insureds. 

You do want to save money but don’t want to end up with a lousy insurer that won’t play your claims or lacks customer service. 

Finally, double-check that the cheapest car insurance company doesn’t have restrictions and exclusions on your policy that you don’t want.  For example, some low cost policies only cover the named insureds to drive the car and won’t extend coverage to rental cars. (See “7 gotchas of cheap car insurance”)

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