Things to Help You Determine Which Auto Insurance is Best

Find the right auto insurance for you by, (1) knowing what you need and what you're getting, (2) researching the company, and (3) being honest with your provider.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insuranc...

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like and Safeco. He reviews content, ensuring that ex...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Oct 27, 2021

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Things to Remember...

  • The best way to find low car insurance rates is to compare multiple companies
  • Knowing what factors go into setting the rates is another handy piece of information when buying insurance
  • Personal information that affects rates includes your age, gender, and marital status

One of the best ways to buy auto insurance is not to jump on the lowest rates, but rather look at many factors that help ensure you get the best deals.

Although low rates may start your process of buying car insurance, they should not be the only factor. Eight things can help supplement your rate research to help you determine which auto insurance is best.

Compare car insurance rates now by entering your zip code above in our FREE tool on this page!

1. Know What Factors Affect Rates

Knowing what factors go into setting the rates is another handy piece of information when buying insurance. Car insurance companies don’t go by a single factor alone, but instead, they base the cost of your premium on personal and vehicle information, according to the Indiana Department of Insurance.

Personal information that affects rates includes your age, gender, and marital status. Insurance companies look at driving statistics from various age groups to determine the risk of accidents.

Those with a high risk of accidents, such as unmarried young males, will typically see higher rates than more experienced drivers will.

Your driving record plays a huge part in your rates. A clean record with no accident or claim history can result in much lower premiums than a spotty record rife with traffic violations.

The amount and type of use your vehicle gets is another factor. Low mileage typically garners lower rates than higher mileage.

Using your car daily for your work commute can cost more than using your car occasionally for pleasure. Using your vehicle for work to make deliveries, haul cargo, or transport passengers can also increase the cost of your insurance.

Where you live and drive may also contribute to your rates. High-crime areas increase the cost of insurance, as do highly populated areas with a high risk of accidents.

Household information that goes into the equation often includes the age, gender, and driving record of other people who may be living with you and using the insured vehicle.

The type of vehicle you drive is another factor. Newer vehicles typically cost more to insure than older vehicles. Insurance companies may also review the cost of repairing your car as well as the risk of theft.

One more piece of personal information that can affect your insurance rates is your credit history. Low credit scores and late payments can cost more if the company believes that information indicates you are not likely to pay your premiums promptly.


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2. Know What You Need

Knowing the type and amount of coverage you need is a huge plus for determining what car insurance is best. Each state has its own set of minimum requirements, which should be automatically included in your policy.

The amount or types of coverage you choose above and beyond the minimum requirements, however, are all up to you.

Make sure the companies you are comparing are at least offering you the bare minimum, but don’t be shy about including other types of coverage that best protect your vehicle and your finances.

Minimum requirements usually include liability insurance, which pays for damage done to others in an accident where you were at fault, the Illinois Department of Insurance explains.

Property damage liability covers the cost of other vehicles and property, such as fences and buildings. Personal injury liability covers the cost of injuries to other drivers, passengers not in your household, and pedestrians.

3. Know What Extras You Want (or Don’t Want)

Choosing additional insurance is voluntary, and it is often very helpful to work with an agent or company that can help you assess your needs. It is also helpful to know what type of coverage you know you do not want.

Choices generally include personal injury protection, comprehensive and collision coverage, and various types of other optional insurance. Personal injury protection covers the cost of your injuries, but you may not want it if you have a solid health insurance policy that already does so.

Comprehensive and collision coverage takes care of the cost of repairing or replacing your vehicle. Collision coverage comes into play from damage done in a collision.

Comprehensive coverage does the same for theft or damage that was not caused by a collision. Vandalism, arson, and acts of nature are examples of the latter.ì

Depending on your state laws, uninsured or underinsured motorist coverage may be required or optional. Uninsured motorist coverage takes care of the costs if you are in an accident where the driver at fault does not have insurance.

Underinsured motorist coverage kicks in if the driver at fault does not have adequate coverage to take care of the full cost of damages.

Optional coverage can include towing and emergency service, custom equipment coverage, and GAP coverage for financed vehicles. Accidental death benefit coverage may be an option, as well as car rental reimbursement.

Some companies offer accidental death benefit coverage as well as lost wages or other disability coverage.

4. Fully Understand the Policy

Fully reading and understanding the policy or estimate you’re given is a very useful practice prior to purchasing. The Wisconsin Office of the Commissioner of Insurance stresses the policy is a legal contract.

Above all else, never sign a contract unless you completely understand what you read.

The Illinois DOI advises getting the company or agent to explain everything in simple language if you don’t understand the insurance jargon. It also warns to never agree to calculations that may not make sense to you and be wary of deals that seem way too good to be true.

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5. Don’t Fudge Your Application

You should be as upfront and honest as you expect the insurance company or agent to be. While it may be tempting to forget to mention an accident or other information from your past, doing so can be illegal.

Insurance companies have access to public records and other databases where information about your accidents, credit history, claims history, traffic violations are readily available.

Even if you are not 100 percent accurate on your application, a company can find out information and adjust your policy rates accordingly once they offer you a document to sign.

They may also have the power to void your policy if they find out down the line that you had not been completely honest on your application and the contract was issued under false pretenses, the Illinois DOI warns.

5. Beware of Bundles and High-Pressure Sales Tactics

If car insurance agents are banging on your front door or incessantly calling to try to sell you a policy, says you might want to take it as a red flag.

You can probably feel more secure if you instead buy from a company you sought out, rather than one that is randomly seeking you.

You may also want to be wary of insurance packages that include many different insurance-related products or coverage that you may not need.

While the cost of such a package may be attractive, the Wisconsin OCI warns the cost won’t be worth it if you can’t use or need the items included. Your best bet is to find companies or agents that instead listen to your needs and then tell you how they can meet them.

6. Research the Company

A company’s background can be just as important as its premiums when it comes to choosing one that works best for you. The first order of business is to make sure the company is licensed to sell insurance in your state, which you can typically do through the state insurance office.

Financial standing is another important piece of information to review. The Wisconsin OCI suggests reviewing company information from organizations such as Standard & Poor’s and A.M. Best.

A company’s reputation and customer service are two more factors that are important. You can find information on consumer review websites, and by asking people you know about the car insurance companies they use.

You can check complaint history with the Better Business Bureau and similar organizations to ensure the company has few complaints and when it does receive a complaint, it handles it to the customer’s satisfaction.

Using these tips can help you make an informed and educated decision for choosing car insurance that works best for you. The price is always a factor, but as you can clearly see it isn’t the only one.

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