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A Complete Guide to Choosing the Best Auto Insurance

Last updated 03/14/2024 by

Sean Bryant
You already know car insurance is important and mandatory to drive legally. While the fun part is picking out a car and all its options, you should also pay attention to the choices when it comes to auto insurance, as doing so will save you money and get you the coverage you need.
What often happens is that people spend little time researching car insurance during the car-buying process and then pick something with the lowest rates. This works well until they file a claim and find out the repairs aren’t covered.
So what do you need to consider? What is the best coverage for you? What companies offer the best auto insurance? How do you know you’re getting a good deal?

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Before you start

As you begin shopping for car insurance, you should have a good understanding of your state’s minimum coverages as required by law. There are four coverage areas:
Liability coverage. This is required in all states and consists of two different pieces, bodily injury and personal property. Bodily injury liability will help pay for the injuries caused because of an at-fault accident. Personal property liability will cover the damage that was caused to someone else’s property.
Collision coverage. If you are in an accident, this will pay for the damage done to your own vehicle. The accident could be with another automobile or with a fixed object such as a tree.
Comprehensive coverage. This will help cover the losses resulting from something other than a collision. This could be from theft or a fire within your vehicle, or it could be because of a natural disaster.
Uninsured/underinsured motorist coverage. Even though liability insurance is required for all drivers, not everyone has it. You can protect yourself with this coverage in case you are involved in an accident with someone who has little or no insurance.
How much coverage you choose over the state minimums is up to you, your budget and comfort level. If you are someone who worries about the worst-case scenario and need the assurance that such events will be covered, you will want to have the most comprehensive coverage possible. If you are on a very tight budget, you might stick with the minimum coverages and hope for the best.

Understanding limits and deductibles

A term you will frequently hear when searching for auto insurance is limits. This is the maximum amount an insurance company will pay out for a claim. Many times you will see this listed with two numbers, for example $25,000/$50,000. The first number refers to the maximum amount the insurance company will pay out for each person in the accident. The second number is the total the insurance company will pay out for the entire claim.
The deductible on a policy is something you’re probably a little more familiar with. This is the amount you are responsible for before insurance will pay out on a claim. For example, if your deductible is $500, you will be required to pay the first $500. After that, the insurance company will pay out, up to the limit.

Get multiple quotes

Now that you understand the different types of coverages, it’s time to get quotes to compare policies. When comparing, make sure each policy has exactly (or as close to exactly) the same coverage as the others.
There are a couple of ways to go about getting quotes. You can do it all online, or you can make a few phone calls. It is important to remember, though, that there are three types of insurance sellers out there.
Agents sell their own insurance. For example, agents from State Farm, Farmers, Allstate and several other companies can only sell their own products. You will only get one quote from each.
Brokers have partnerships with a variety of insurers. A broker can get you quotes from multiple companies and offer recommendations based on their experience.
Direct to company. Some companies let you purchase directly from them (for some, this may be the only option).
A broker or agent can help you if you have to make a claim on your policy. Multiple quotes will help you understand what the true price is for the policy that you want, and you can weed out the outliers.
“Make sure that when you get your quote, the person on the other end of the phone can explain coverages clearly and knowledgeably,” says Holly Pritulsky, insurance professional with American Family Insurance. “Do you get the sense that they know what they are talking about?”

Ask for recommendations

You can ask friends and family, or post on a customer service group on social media to get unbiased opinions on what auto insurance company you should use. Another great tip: call a few local auto body shops. Ask them whom they would recommend based on their experiences. The collision repair shops want the easiest claims process possible, so they will know who is best to work with. However, some auto body shops have partnerships with insurance companies, which affects their recommendations, so be sure to ask about that.

Have an advocate

Besides some outliers, most of the auto insurance companies are going to be pretty similar. They must remain competitive, so prices aren’t going to fluctuate too wildly (with the exception of when you have a less-than-perfect driving record). They also want to retain customers, so most are going to have decent customer service.
But insurance companies are still in the business of making money, and have the knowledge and experience to try to ensure they pay the minimum legal limit on a claim. As you don’t know the laws and probably don’t have the time to advocate for yourself, an agent or broker comes in handy to help you get the most money as possible for your claim.
With some insurance companies, there are no agents and you deal directly with the company. The result is that you may have lower premiums, but when it comes time to making a claim, you are your own advocate.

Finding the best auto insurance

When you’re looking for auto insurance, don’t make the mistake of thinking the cheapest (or for that matter, the most expensive) is the best. The best auto insurance policy is going to be the one that most effectively fulfills your needs.
If you do some research and know what you need and want, you can find auto insurance in which you get the coverage you need and your claims are paid quickly with no hassles.

SuperMoney may receive compensation from some or all of the companies featured, and the order of results are influenced by advertising bids, with exception for mortgage and home lending related products. Learn more

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Sean Bryant

Sean Bryant is a Denver based freelance writer specializing in travel, credit cards and personal finance. With nearly 10 years of writing experience his work has appeared in many of the industries top publications. He holds a Bachelor of Arts degree in economics and runs

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