How to Choose an Auto Insurance Policy in 2025 (Easy Steps to Follow)

The way you choose an auto insurance policy is by focusing on affordability, good customer service, and efficient claims handling.

When choosing an auto insurance company, the goal is to see past the gimmicks to the real information that will help you make this important decision. By doing a little research, and knowing what to look for, you’ll be able to find a company you can feel confident about.

To get free online auto insurance quotes, enter your ZIP code above.

Secure Reliable Insurance Coverage in 5 Steps

Step #1 – Consider the Price

Price is most likely going to be one of your main concerns when purchasing auto insurance. Depending on the type of vehicle you have, your age, and several other factors that affect auto insurance rates, you may end up spending quite a bit on auto coverage.

Minimum Coverage Auto Insurance Rates by Provider

While insurers usually use the same calculation factors, rates can vary greatly from company to company. In some states, the Department of Insurance publishes a guide that lists average rates for each part of the state. Use this guide to get an idea of how much auto insurance costs where you live.

Also, check insurance company websites for information. When you have the list of potential insurers narrowed down to three or four, call for detailed quotes specific to you and your situation.

Step #2 – Check the Insurer’s Licensing

It may surprise you to know that not all the best auto insurance companies are licensed in every state.

Although you may see a television ad for a company, it may be because the ad is broadcast on a cable channel that reaches a wider audience than a local network affiliate.

When researching rates, check the company websites for a list of states where they are licensed to make sure their services are available to you. You may also be able to get this information from your state’s Department of Insurance. You can also call the company and ask them whether they’re licensed to issue policies in your state.

Step #3 – Evaluate Customer Service

This can be tough to gauge before you actually become a policyholder. You can’t know how your insurance company will perform in the event of an accident before it happens.

There are a couple of ways to determine whether a company provides good customer service. First, check with the Better Business Bureau to see if any of the insurance companies licensed in your state have complaints against them.

It’s not uncommon for any business to have a few complaints, but if the number is high and the complaints all seem to be about the same issues, that’s a red flag. For example, a company like USAA is often recognized for its reliable customer service.

Check out our ranking of auto insurance companies with the best customer service to learn more.

Also, talk to family members, friends, neighbors, and coworkers. Ask them which insurance companies they’re with and whether they’ve been satisfied with the service they’ve received.

Finally, when you do call for an auto insurance quote, take note of whether the customer service representative is polite, helpful, and knowledgeable. That phone call can be an indication of what kind of service to expect as an auto insurance policyholder.

Step #4 – Assess Financial Stability

The reason you buy auto insurance is to be reimbursed for damage to your vehicle, medical expenses, and other potential financial losses that can result from an accident.

No matter how broad the coverage of your policy, it won’t do you any good if the company you choose isn’t solvent. Check the financial news and use ratings established by independent rating agencies to determine which companies are the most financially stable.

Read More: How to Research Auto Insurance Companies Before Buying

Step #5 – Match Coverage to Your Needs

You should also consider what coverages you need for yourself and how much they’ll cost.

Common Auto Insurance Coverage Options

For example, full coverage auto insurance covers your vehicle and the other party’s vehicle, but it costs more than liability-only coverage.

However, liability-only doesn’t cover your vehicle, so it offers little protection. Consider your needs and budget while shopping for different types of auto insurance coverage.

More About What to Look for When Shopping for Car Insurance Coverage

After you’ve gathered all the data, the statistics, and the feedback from raters and people you trust, the final question to ask is, do you feel comfortable with the company you’ve chosen?

If you talked to an agent, either on the phone or in person, did you get a good feeling from them? Were they direct and honest? Did they answer your questions and provide you with the information you needed? Learn how to find auto insurance agents in your area in our guide.

Accidents don’t just happen during business hours. Will the company be there for you anytime you need them?

Uh oh! Caught in an auto accident?😱Don’t get run over by the claims process! Learn how to file your claim and get back on the road quickly at https://t.co/27f1xf131D.🚗Find out more information here 👉: https://t.co/Ndz4m4BRIF pic.twitter.com/5cwtCeuTi7

— AutoInsurance.org (@AutoInsurance) April 10, 2023

If you can answer yes to all of these questions, you’ve found the insurance company that’s right for you. If you haven’t found one yet, keep looking. Enter your ZIP code into our free rates tool below to compare online auto insurance quotes now.