How to Compare Car Insurance Quotes, Rates and Offers
Look beyond the price when you compare car insurance quotes.
You hear the ads all the time and they all sound great! They promise to save you money on your car insurance and they make the claims process sound like a breeze! But they all cannot be equal. So which company do you choose?
We hate to tell you this, but there isn’t one straight answer.
The right choice always depends on what your needs are. Each person has a different lifestyle, different vehicles, and different budgets. But, there are things you can look for when you’re shopping around for your insurance policy.
To help highlight what you can look for, we’re going to introduce you to our friend Paul.
Paul had a great weekend! He was recently hired on by the local school board as a grade 6 teacher at a school across town. To get to work, recently purchased a 2015 Volkswagen Jetta. It’s great on gas and his favorite shade of blue.
He had enough money for the down payment but has to finance the rest of the balance on the vehicle—no problem now that he has a steady job! He requires insurance to be placed before he can pick up the vehicle from the dealership tonight at 8 pm. He has a full-time job, but not a ton of cash after making his down payment on the vehicle. He decides to search online.
Read: How to Pick the Right Insurance Company
Here’s what he found:
Low Joe’s Insurance
Paul phones up Joe and he said he can get him a great one-time low price! Here’s what Joe has to offer:
- Low premium
- "Comprehensive" coverage
- $2500 deductibles
- No payment plan, but a low one-time payment
Paul says that sounds great! He has just enough for the one-time payment and comprehensive sounds like it’ll cover everything. Joe says great and puts him on hold for 40 minutes to draw up the paperwork. Eventually, the line gets disconnected. Paul tries to phone back but gets no answer. It's 4:30 pm and the office is closing in 30 minutes for the weekend. He wants to go ahead, but he's not sure he'll be able to get the paperwork processed and issued in time.
Major Player Broker Insurance
Because Joe hung up on him, Paul tries another company on the list. He sees ads for this company all the time online, tv, and on the radio. He has a few friends that are with them. He connects with Kathy, after about 20 minutes hold. Kathy is cheery, inquisitive, and happy to help. As a broker, she has a few insurance companies accessible to her but selects the best option for him right now. This company can offer:
- A decent yearly premium, but higher than Joe's
- Full coverage (including glass)
- No payment plan
- $1000 deductibles
- A 24-hour phone line if he has any questions
This sounds great to Paul, but he’s not sure that he can front all the money for the year after putting his down payment. He likes the idea of having a broker shop for him every year, but he can also shop around for himself. Kathy said her office closes at 5 pm, but she's staying late anyways and can help him out after hours. She gave him her direct line to call back.
Great Insurance Inc
Paul wants to make sure he’s making the right call, so he looks up one more insurance company on the list. This company takes about 15 minutes of hold time, but he eventually speaks to Dana.
- Highest premium of all the companies, but not outrageous
- Full coverage (excluding glass)
- Occupational discount if he is with the teacher’s union for one year
- Home and Auto Discount
- 3 lump-sum payment plan
- $1000 deductibles
- Okay hold times, but open late
He tells Dana he needs some time to think it over and compare his quote offers.
So, which one should he choose?
Points to Compare
Again, the right insurance policy depends on what you need from it. Not everyone needs full coverage, a payment plan (with interest), or to be in contact with their agent on demand, multiple times a year. Here are some key points that Paul can look at to narrow down his options.
Because Paul is financing his car, the finance contract will require him to have “full coverage” on his car. This means that he has both collision and comprehensive coverage. Always ask your broker or agent what their version of “full coverage” entails, as their definition might be different from what your finance contract requires. In conversation, "comprehensive" coverage may be used to describe full coverage, but it may also mean just your fire, theft, and vandalism coverage.
Low Joe Insurance would not offer him collision coverage, so the low premium insurance policy will not work for what he needs.
Read: 5 Types of Auto Insurance It Pays to Understand
You can be presented with a great policy that offers full coverage and a decent price. But what about the coverage deductibles? The deducible amount is the dollar value you have to front in the event something happens to the vehicle. Can you really afford $2,500 upfront to fix your vehicle before insurance kicks in? Is your vehicle even worth $2,500? You need to check your finance contract as well—they will have a specific maximum allowance for your deductible amount.
In Paul’s case, the remaining two companies are offering the same coverage that he needs with the same deductibles. Major Player Broker Insurance has included glass coverage in their offer, so they seem like the best so far.
If you are a new driver or are new to an insurance company, your options for discounts may be limited this year. But what do they offer for the long term? Do they have home and auto discounts? Loyalty discounts? What about occupational discounts?
In Paul’s case, he can get occupational discounts next year with Great Insurance Inc. Because his contract runs for 3 years with the school board, he should be eligible for this occupational discount next year, which will save him 15% on the premium on top of any home and auto bundles. He plans on buying a home in the next few years, so this might be beneficial for him.
During hard markets, companies may restrict payment plan eligibility for their clients to make sure the company has enough reserves to pay for upcoming losses. If you can make it work, it is always best to pay for your insurance outright because you avoid any interest fees associated with payment plans. Any changes you need to make throughout the year are either refunded to you or billed for you. Plus you don’t have to watch your bank account each month to make sure the money comes out.
For Paul, he has a little money to front, but it’s the most ideal if he can spread it out a bit. Great Insurance Inc offers the 3-lump-sum payment plan which means he’ll have to pay some interest, but it is less of an upfront cost for him.
Read: How Your Auto Insurance Rates are Determined
Often when you are speaking with your insurance company, it is during a time of change (new car, new house, new baby) or a time of crisis (car accident, flood, fire), so you want to make sure the person on the other end of the line truly cares about your situation.
Yes, in some circumstances, you may need to go with the cheapest insurance company with the worst 2-hour hold times and bad customer service due to your financial circumstance. But, if you have the funds available, it is always better to go with the company that offers better service, regardless of price. They’ll look out for you in times of crisis and give you greater peace of mind—that’s what insurance is about after all right?
Paul really enjoyed talking to Kathy at Major Player Broker Insurance, but their offices are only open during regular 9-5 business hours. Kathy agreed to stay until he made a decision, but that may not always be the case. There are times, including tonight when he picks up his new Volkswagen, where he will have to call and get information after 5 pm, so Major player may not work for him.
After taking a look at all these factors, Paul decides that Great Insurance Inc. is the best option for him. They do not offer glass coverage, but the dealer can throw in side-door and sunroof coverage with his finance deal. Windshields are cheaper to replace, and Great Insurance Inc offers a separate glass policy for him if he finds the windshield is expensive to replace for his vehicle. He has to pay a little more this year, but with the 3-time payment plan option and future discounts, he knows they’ll be better in the long run. Plus, they’re open late!
Paul calls Dana back and they get the policy set up over the phone—he doesn’t even have to come down to the office! They finish the paperwork via email signature and the documents are sent off to the dealer. He’s all set to go get his vehicle. He can’t wait to hit the road!
Every year, insurance markets and prices will change depending on rates of accidents, the economy, and new regulations set by our local governments. It is always good to shop your policy to make sure you’re getting the best coverage for YOU! There are many insurance companies to choose from out there, but the best choice is the one that fits your lifestyle!
Written by Kaitlyn Kokoska
Kaitlyn Kokoska is a content writer and ex-Personal Insurance Broker from Edmonton, AB. After dipping her toes in the insurance industry, she realized that client education is the key to financial empowerment. She’s now on a mission to make insurance a more accessible topic. You can find more information about Kaitlyn on her website.