HOW TO CHOOSE AN AUTO INSURANCE COMPANY


car in the mountains

Choosing an insurance company isn’t just about who will give you the best deal.  Insurance in this day and age is a necessity, but beyond that, having car insurance is required under Colorado law for you to drive a car on Colorado streets. 

Therefore, being an informed consumer of insurance products and sellers is important when choosing an insurance company. This decision can make a huge difference in your life if you are involved in an accident, whether it be your fault or not. 

  • If it’s your fault, having enough insurance is crucial to protecting your assets such as your home or bank accounts. 
  • If it’s not your fault, it’s important that you have what is called UM/UIM (uninsured/underinsured) motor vehicle coverage because it protects you and can compensate you for your injuries if the person who hit and injured you doesn’t have enough insurance to cover the cost of your losses which is not unusual when you consider that the mandatory minimum amount of coverage required is only $25,000
  • See my blogs on the different types of insurance coverage for a more detailed explanation.

So in addition to the explanations, I have provided on the types of insurance coverage, I thought it would be helpful to provide some suggestions for what to look for when choosing an auto insurance company.

8 Steps To Buying A Car Insurance Policy

1.  Determine how much and what coverage you really need — liability, medical pay, uninsured motorist, collision, towing, car rental. 

At a minimum, you should absolutely be purchasing BI coverage and in my opinion, no one should have less than $100,000 in coverage.  When you purchase the BI coverage, you have the option of purchasing the UM/UIM coverage in the same amount as the BI coverage.  You should absolutely do that because UM/UIM coverage protects you!  I also believe that medical payments (known as “med pay”) coverage is necessary and I always recommend having it above the $5,000 which is required to be offered.  In my opinion, $25,000 in med pay is adequate and the best thing about med pay is that it doesn’t have to be paid back to your insurer.

2.  Review your driving record — you can get a copy by writing to the Department of Motor Vehicles.

3.  Do an online check of insurance companies you are considering. 

When I say to do an online check, what I mean is check out their reviews from other customers.  When doing this, look for how they treat their insured’s and whether they make the process easy or difficult.  You can also search for employee feedback on their own companies (I did this for one company recently and found employees spoke horribly of their employer – that’s a hint if they don’t treat their employees well, do you think they will be any different with their insureds?).  There are several internet sources to compare companies, but here’s a couple of web addresses for you: https://www.jdpower.com/business/press-releases/2020-us-auto-insurance-study, or the State Division of Insurance https://www.colorado.gov/pacific/dora/node/90616.

4.  Solicit comparative bids through the internet or by phone — keep track of the information you obtain.

5.  Ask for any discounts you may qualify for — good driver, multi-policy, safety equipment, limited mileage, good student or away-at-college discounts, etc.

6.  You should keep in mind that the least expensive company may not provide the best service when you file a claim.

The highest-rated company nationwide according to J.D. Power & Associates is USAA, though you should also look at reviews for their med pay coverage and be aware that USAA has a one-year limitation upon the use of their medical payments benefits.

7.  Review the policy before you sign.

8.  Cancel your old policy.

Insurance is one of the most important purchases you make to protect yourself and your family. Make sure you understand exactly what you are buying so that if the worst-case scenario happens (an auto collision) you can feel comfortable that you are protected.