Like paying taxes or finding a good mechanic, shopping for car insurance can be a chore. There are so many options and rates to consider; if you’re not careful, you could end up buying a policy from a car insurance company that doesn’t meet your needs.
Before sorting through quote comparisons, you’ll need to do some homework. Start by reading reviews of the best car insurance companies and looking at reliable third-party ratings for financial strength, policyholder complaints and customer satisfaction. This report offers tips, expert advice, and some common mistakes to avoid before you start shopping for car insurance.
- Before you begin shopping, make a list of what coverage you need, how much you can afford, and what options you’d like to have.
- Price is important, but it’s not the only factor to consider. Look for car insurance companies with sound financial strength, positive customer ratings, a fast claims process, and reliable customer service.
- You can shop for car insurance yourself, but experts recommend working with an agent to make the process easier.
How to choose the best car insurance company
Car insurance isn’t a one-size-fits-all product; every driver’s needs are different. We put together the following step-by-step guide to help you navigate the process.
1. Determine your needs
Insurance companies offer different coverage options to consumers, which is why shopping around is essential. Here are a few things to consider as you prepare to shop for car insurance:
- How many drivers need coverage?
- Which vehicle or vehicles must be insured?
- Do you want coverage beyond the minimum requirements in your state?
- Do you prefer a six-month or year-long policy term?
- Can you pay for your entire policy upfront?
- Do you want to bundle other insurance, such as home insurance, with your auto policy?
Not sure how much insurance you need? Talk with a licensed independent insurance agent.
2. Find insurance carriers that align with your needs
Before you start to call insurance companies or fill out forms for quotes online, do a little research. You may want to:
- Use an online auto insurance calculator to estimate costs before getting quotes. An estimator is quick and requires you to enter just a few pieces of information. No contact information is required, not even your name.
- Search for an auto insurance company’s list of discounts to find out what kind they offer and how many you could qualify for. You may find you can get an auto insurance discount, like for being a homeowner, that you didn’t know about.
- Talk to family and friends about which auto insurance company they use and why. Ask them how long they have been with their carrier and whether they plan to renew.
“Finding an insurance carrier that aligns with your needs is absolutely crucial,” says Noah White, an agent who sells auto, life and burial insurance with Ark Insurance in Houston. “You wouldn’t work with a general doctor if you need brain surgery, so why would you want an insurance carrier that doesn’t fit the need? Find a carrier that can provide the best solution to your problem or potential problem.”
3. Check out top-rated auto insurers
You should also consult our list of the best auto insurance companies. This list was created from more than 1,500 nationwide survey responses about insurer customer service, digital applications, trustworthiness, plans to renew, and more. In addition, the study used third-party ratings from the National Association of Insurance Commissioners (NAIC) and AM Best.
By looking at this list, you can see which insurance companies ranked highest and view the car insurance providers that ranked the best in specific categories, such as:
- Auto and home bundling
- College students
- Ease of service
- High-risk drivers
- Policy offerings
- Senior drivers
4. Review third-party ratings
Market research firm J.D. Power conducts annual surveys gauging customer satisfaction with the claims service, insurers’ digital operations, and the overall shopping process. AM Best rates companies based on their financial strength and ability to meet claims demands, while the National Association of Insurance Commissioners (NAIC) tracks policyholder complaints. The Insurance Information Institute, an industry research and outreach organization, offers a wealth of information on how insurance works and consumer guidance.
5. Decide if you want to work with an agent or shop online
Next, decide whether to work with an agent or buy directly online. There are advantages and disadvantages to both. Some people like the independence of obtaining car insurance quotes online and the ability to compare rates at their convenience. Others may prefer working with a company representative or independent agent who can answer your questions and offer personalized service.
6. Compare car insurance quotes
A car insurance estimator is a great way to start your comparison shopping. You begin the process by simply entering your ZIP code. Then, you are asked if you are currently insured and whether you own, lease or finance your vehicle. Based on your information, you’ll receive an estimate for three different levels of coverage:
- State minimum liability
- Standard liability (limits of at least 50/100/50)
- Full coverage (limits of 100/300/100 or greater)
Of course, these estimates are not the same as quotes, which are based on additional personal information, such as the type of vehicle you want to insure, how many miles you drive annually, and how far you commute daily. The best part is that to use the car insurance estimator, you do not have to provide any personal information, such as your name or your email address.
If you like any of the estimates offered, you can click on the “Get a Quote” box to start the online quote process, which provides information from multiple providers.
Common mistakes to avoid when shopping for car insurance
Consumers say price is the most important factor when shopping for car insurance. But cost isn’t the only thing you should consider when looking for a carrier.
“We suggest not choosing a car insurer by price alone. While cost is important, it is essential to check out how the insurer handles claims and customer service issues,” says Mark Friedlander, director of corporate communications for the Insurance Information Institute (Triple-I).
“You should also learn how financially strong the company is so you are confident your claim will be covered, even after a major natural disaster when thousands of claims could be filed simultaneously. We recommend working with a licensed insurance agent to gather this information as part of the quoting process,” he says.
The following are some common mistakes people make when choosing a car insurance company.
- Disregarding negative customer reviews: Word of mouth is often the best way to learn about a company. By reading customer reviews on car insurance companies and not ignoring complaints or negative-leaning reviews, you are choosing to think critically about what auto insurer best meets your needs, budget, and expectations.
- Not asking about discounts: If you’re not asking about cost-saving car insurance discounts, you could leave money on the table. Every major carrier offers a variety of discounts for everything from bundling home and auto policies to insuring multiple vehicles and renewing coverage early. Some of these can result in savings of up to 20% or 30%, depending on the insurer.
- Not reading your policy terms: Everything about your car insurance coverage is in the fine print. It can be a huge disadvantage to not read your terms and anticipate coverage or services you didn’t opt into. Take a moment to review what a policy includes before finalizing your coverages with car insurance — and if you don’t understand something, ask!
- Only talking to one insurance company: Experts recommend getting quotes from at least three insurers. And when you do, make sure that you’re comparing identical coverage amounts and limits.
- Skipping coverages: A policy that meets state minimum requirements is your cheapest insurance option. But you will probably need additional protection, depending on your vehicle, such as full coverage auto insurance. If you travel frequently, roadside assistance could be a worthwhile policy add-on. Don’t be tempted to cut costs now if it jeopardizes your future finances.
Final thoughts: How to choose the best insurance company
Whether you want to buy directly or talk to an agent or a broker, you know what is most important to you regarding your car insurance needs. Helpful tools like using an online insurance estimator, reviewing the best insurance company lists, and comparing quotes will help you choose the right insurance company for your needs.
Frequently asked questions
What makes a car insurance company reliable?
When choosing a car insurance company, it’s important to consider specific factors. These include its customer satisfaction ratings, financial strength, claims handling, and coverages. The best car insurance companies have high satisfaction ratings from J.D. Power and low NAIC complaint index scores. It’s also a good sign if the insurer has a high credit rating from AM Best, which shows their overall financial strength.
How do I know if I’m getting the best deal on car insurance?
When it comes to car insurance quotes, more is better.
“You should always obtain at least three quotes when shopping for coverage. You want to ensure the quotes are ‘apples-to-apples,’ meaning they include the same types of coverage, policy limits and deductibles. You can obtain quotes yourself or work with a licensed insurance agent during this process,” Friedlander says.
Can I change my car insurance provider anytime?
Yes, you can. You can switch insurers at any time for any reason, and in most cases you shouldn’t have to pay a fee for doing so. If you do switch carriers, make sure the new policy is paid for and has been activated before canceling your old policy, or you risk a lapse in coverage. Remember, it’s illegal to drive without car insurance.
Resources & Methodology
Sources
- Insurance Information Institute. “Insurance Industry at a Glance.” Accessed March 2025.
- NAIC. ” The Power of Community” Accessed March 2025.
- AM Best. “AM Best” Accessed March 2025.
- J.D.Power. “Auto Insurance Study” Accessed March 2025.
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