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How to Shop for Car Insurance

Written by Todd Clay. Posted in Research Last Updated: 04/10/2012

4 Easy Steps to Getting the Best Rate With The Best Company Every Time

How to Save Hundreds When Shopping for Auto Insurance.

How to Save Hundreds When Buying Auto Insurance.

Finding out how to shop for car insurance isn’t hard. But if you do it wrong, you could waste time, get frustrated, or worse, lose money. When I say a lose money, I’m talking thousands of dollars a year. It’s worth taking some time to learn the process. If you do, you’ll shop smarter, save some cash, and get peace of mind knowing you did it right.

Stop Wasting Good Money

In case you don’t think it’s worth your time, consider a normal driver in Texas. (Your state will be different, but the example still applies.) The Texas Department of Insurance publishes auto rates from all the insurers in the state. In 2008, a married 35-yr old driver in Dallas County with no accidents or tickets could pay anywhere between $243 and $1128 for a 6 month policy. The same driver with the same coverage could pay $1770 more per year because they didn’t shop their car insurance – almost two grand! Unfortunately, this is not uncommon.

That’s why it’s so important to make sure you’re getting a good deal. You may love your agent, but think about this: Your agent gets a commission from every extra dollar you waste with their company. If you don’t look out for yourself, your agent won’t do it for you. That money is yours – don’t just give it away. Here’s what you need to do.

Step 1: Pick Some Car Insurance Companies

Not every auto insurance company is worth your business. You need to find a few other companies to compare. How do you get a list of companies?

Ask around. Ask your friends who insures their cars. They’ll let you know if they’ve had a good or bad experience. Don’t want to ask around? Then check out some customer reviews. Collect a list of some auto insurance companies you want a quote from. I suggest you pick at least 3, but preferably 7 companies to compare. That way you get a healthy sample for the best possible savings.

Step 2: Narrow Your Choices

Once you have your list, check two other things. First off, financial strength. Various ratings agencies measure the financial stability of insurance companies. A.M. Best and Standard and Poor’s are the most prominent agencies. You can look up each company’s financial rating at your state’s department of insurance.

Second, ask the question: do those companies advertise? Companies that advertise are typically growth-oriented companies. This is a positive trait since you don’t want to send your premium dollars to a company that isn’t motivated to gain your business – how will they treat you when you have a claim. If you haven’t heard of one of the companies on your list, then it may not be a good fit.

Step 3: Getting Online Quotes

Go online for auto insurance quotes. Why? Because it takes too much time driving around, sitting in offices, or even jabbing on the phone with salespeople. The process takes long enough without any unnecessary steps.

The quickest way to get multiple quotes is to use a ‘quote aggregator’. It takes a few minutes to fill out a questionnaire. At the end, you can see quotes from several car insurance companies, and you’ve only filled out one form. I’ve included a link to make it easy for you: Online Quote Aggregator

After that, grab quotes from the remaining the companies on your list. Use a search engine to find the company websites. Auto insurance quote instructions should be very prominent at those sites.

Step 4: Confirm Online Quote Over the Phone

Now you have some quotes, it’s time to confirm the price. For your best auto insurance quotes, make a couple of phone calls to the general company number. Again, a search engine is helpful here. You can also call a local agency if that makes sense. Tell them about your online quote. If they can’t access it, answer the questions again.

There’s no reason to make 5 phone calls. You’ve already narrowed down the companies using the previous steps above. If you’re happy with the first quote on the phone, then buy the policy. Make sure it’s in effect before cancelling your current policy. Chances are you saved enough money to pay yourself a few hundred bucks for your time. After all, where else can you pick up an extra few hundred to a thousand bucks for a couple hours of work?

If these steps helped you shop for car insurance, leave a comment to help others in their search for a cheaper company.

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Todd Clay

Todd Clay is a former insurance agent with the largest insurance company in the United States. He earned his Bachelor’s from the University of Texas. He’s worked in several fields but has specialized in insurance, financial-related information, and technology. He blogs at Car Insurance Guidebook.

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