Gianetta Palmer is a writer for, copywriter, and essayist. Her work has appeared in, Healthline, and The Dyrt Magazine. She is the author of Scrunchie-Fried and writes a lot about car insurance in her spare time.

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Melanie Musson is the fourth generation in her family to work in the insurance industry. She grew up with insurance talk as part of her everyday conversation and has studied to gain an in-depth knowledge of state-specific car insurance laws and dynamics as well as a broad understanding of how insurance fits into every person’s life, from budgets to coverage levels. She also specializes in automa...

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Reviewed by Melanie Musson
Published Insurance Expert

UPDATED: Mar 13, 2020

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When shopping for insurance, it can be hard to tell one company from another. All insurance companies offer similar products, and their aggressive advertising campaigns make it difficult to tell which company is truly best. Although you can get free quotes to check the cost of coverage, the cheapest policies may not be the best choice. Rather than relying on commercials and cheap rates to make up your mind, here are a few ways you can check to see if an insurance company is a good choice:

— Check to make sure that the Company itself is Legitimate

If you’ve never heard of an insurance company before, that might be a sign that the company isn’t a good choice. Some scam artists create false policies from fake companies online, and it’s easy to fall victim to them if you’re not careful. A good insurance company should have a web presence, including a website, in addition to a phone number. You can also check with the state Department of Insurance to make sure the company is legitimate.

— Check the Company’s Financial Standing

You might not want to get involved in a company that’s in financial trouble. You can check an insurance company’s A.M. Best rating to see how strong the company is financially, especially in regards to its credit score. Companies with a low rating may have a difficult time paying claims. It’s also a good idea to check how the company rates with the Better Business Bureau to see if there are any complaints you should know about.

— Look for Online Reviews

There are dozens of insurance review sites on the Internet, and reading consumer reviews from several different sources can help you form a complete view of what the company is really like. Just keep in mind that not every review should be viewed equally; a single scathing review might not mean much in the overall scheme of things. A series of reviews stating similar complaints are something to pay attention to.

— Look at the Rates

Insurance companies have to report their rates to the DMV, and this makes it easy to compare rates from one company to the next. You can get a quote online or just look for a rate comparison site to get a rough idea of which company is the cheapest.

— Research the Discounts

Even if a company’s base rate is generally high, you may qualify for some specific discounts that will save you money. By picking a company that offers discounts that will benefit you, you can save on insurance and ensure that you get the best possible rates.

— Search for Lawsuits

It’s easy to find a history of class-action lawsuits against various companies online. Most major insurers have been sued at some point or another, but it’s a good idea to check the legal history of your insurance company before signing on for a policy. If nothing else, knowing what lawsuits have occurred will help to keep you vigilant when dealing with the company in the future.

— Talk to the Insurance Company

While researching an insurer online can help you determine whether it’s legitimate and if it has any major concerns, the only way to know for sure whether you’ll like a company is to deal with it directly. Call the customer service number to see if you like the speed and quality of your service. It may also help to discuss your policy options over the phone rather than try to purchase the policy on your own online.

— Ask your Friends and Family

Insurance relies heavily on word-of-mouth for recommendations. As a service industry, the only real product that most insurance customers ever receive is intangible. This makes customer satisfaction extremely important. When you ask your friends or family about their experiences with a company, be sure to be specific about its quality as a service provider in addition to its rates. You may pay more or less for coverage than your friend, but you should have a similar customer experience.

The first place to start when assessing your insurance options is to get a quote from several different companies. Once you’ve narrowed it down to a few insurers that can offer you good rates, you can research those companies in detail. Your thorough research will pay off by helping you find a good company. It only takes a few minutes to scope out an insurer online, and it will save you a lot of money and hassle in the future.