Skip to main content

Four Tips to Help Buy the Best Car Insurance Policy

best car insurance policy

There are so many ways to buy car insurance, it can make sorting through all the choices to find the best car insurance policy for you and your family challenging.

With each new television commercial, and there are a ton of them, insurance carriers claim to offer the best value. But what is “value?”This is difficult to determine. At first glance, all of the policies may look the same, however, there are important differences you need to consider. Your goal is to find an insurance policy that includes all the benefits you need at a competitive price.

This may not all be spelled out in your policy declarations either.

Four steps for finding the best car insurance policy

1) Determine Level of Coverage You Need?

When purchasing consumer packaged goods or electronics, the consumer typically has a good sense that “cheaper” models or options are likely built with the lesser materials. As a result, we intuitively understand the basic adage, you get what you pay for, and avoid buying things that don’t inspire confidence. This is also true of your car insurance.

When shopping for insurance, the cheapest policy may not be the one you. In a sense, when you purchase an auto insurance policy, the coverage is like the materials, and if you buy an inexpensive policy, you may be getting a product built with bad materials (or coverage). For instance, cheaper policies may not have physical damage coverage like collision or comprehensive, leaving you without protection on your car in the event of a loss.

More important that the basic coverages and limits you’ve purchased, the policy contract is also a driver of when and for whom coverage is applied. This may be more important that the amount of coverage you purchased. If you purchase a cheaper policy, it may have more exclusions and limits on when coverage applies. It’s important to ask your insurance agent to outline the exclusions in your auto insurance policy before you purchase.

The nonprofit Insurance Information Institute notes that all states except New Hampshire require property and bodily injury liability coverage. A policy that offers only the minimum amount of liability protection required by law may save you money, but it probably won’t cover the legal claims that can stem from serious accidents involving property damage or injuries.

It is true, not everyone’s insurance needs are the same, and for some, a stripped back, nonstandard policy, may actually be the right selection. For example, if you’re on a strict monthly budget and you’re not in at a high exposure to financial loss, you may be OK to purchase a cheaper policy. But be aware of it’s limits so that you don’t get caught without any protection.

However, if you’re concerned with asset protection, you need to purchase a policy with the right coverage, broad contract terms with limited exclusions, and the appropriate limits and deductibles. This will give you the comfort that you’re protected.

2) Review the Financial Health of The Insurance Company

Everyone wants a good deal on their auto insurance policy, but low rates won’t do you any good if the company you choose isn’t around to pay its claims. Online reports from independent ratings companies, such as A.M. Best, Fitch, Moody’s and Standard & Poor’s, can help you determine your insurer’s financial health.

Each ratings agency uses its own standards for evaluating insurance companies and their financial health. 

3) Compare Several Car Insurance Quotes

You can shop for insurance by going online, using the telephone or working directly with insurance agents. A report by Bankrate says getting multiple quotes is important because prices for the same level of coverage vary greatly. That happens because insurance prices are based on risk. Each carrier has its own formula for measuring the policyholder’s risk for filing claims.

Some insurers rely heavily on insurance scores to determine how likely policyholders are to file claims. Other companies may give more weight to the type of car you drive and how expensive it would be to repair following an accident.

Where you live also can be a factor in determining what you pay for car insurance. If your ZIP code has a higher-than-average rate of car accidents, your insurance costs could be higher. 

4) Ask About Discounts

Many insurance companies offer discounts, notes MarketWatch. If you have a teen with good grades on your auto policy, he or she may qualify for a Good Student discount. Some insurers offer discounts to drivers who meet annual low-mileage thresholds or take driver education classes. If your car has an anti-theft device, that also could qualify you for a discount.

Be sure to ask to request a list of all available discounts. It could make a big difference in how much you pay for your policy.


In most states insurance is compulsory, so you have to buy it. But you don’t want to buy a policy that isn’t right for you, it’s true that you can have too little and too much insurance. As the consumer you need to ask a lot of questions, and make sure the premium for the coverage that is right for you, is what you’re buying. That’s real value.

Let’s Get Started

Auto Insurance Quote

Want to know if you can save on home or auto insurance? See for yourself. Start a quote today.

Start Quote

Call today and speak with a professional insurance agent.


Follow Us!

Share via
Copy link