Auto Insurance Companies – Which One Is Right for You?


WRITTEN BY: Julia Matseikovich

UPDATED: NOVEMBER 04, 2022 | 3 MIN READ

It can be difficult to find the right auto insurance company for you and your family’s needs. What companies are available near you? What should you expect from them? And how can you find the one that’s best for you?

That’s why we wrote this comprehensive guide – to help you learn all about the different types of auto insurance companies available, how they work, and what you can do to make sure you end up with the right provider.

Types of Auto Insurance Companies

Think all auto insurance companies are the same? Think again! Not all insurance companies are created equal. Some companies provide specific services to fill unique niches for their customers.

Other, more mainstream auto insurance companies try to provide the basics for the greatest number of people – but you might not always get the best value there. It helps to know what different types of insurance companies are available to help you figure out which provider will work best for you. 

Online Auto Insurance Companies

Some auto insurance companies are entirely virtual. Esurance is probably the biggest and most well-known provider of exclusively online insurance, but they aren’t the only player in the game. The good thing about online auto insurance companies is that they save money on overhead costs by not having a physical office or an in-person insurance agent for you to talk to.

They generally pass along these savings to their customers in the form of lower monthly premiums. However, it can be difficult to contact your provider, file claims, or get things done if you aren’t very tech-savvy.

High-Risk Auto Insurance Companies

Auto insurance companies do business based on risk assessment. If they believe you will be high risk and expensive to insure, they may charge you a higher monthly premium – or refuse to sell you coverage altogether.

But other auto insurance companies specifically cater to the high-risk market of drivers. Drivers who’ve had several accidents within their most recent three to five years of driving history, several tickets, or young drivers with little-to-no experience fall into this high-risk pool.

You may still pay more than you would like in monthly premiums for auto insurance from a high-risk provider, but the odds are good that you will still get a better deal than a major auto insurance company.

And you may have no choice but to rely upon a high-risk provider if the major companies in your area refuse to provide you coverage.

Major Auto Insurance Providers

Major auto insurance providers include companies like Geico, Allstate, State Farm, and the like. They operate in almost all 50 states across the US, they spend a lot of money on advertising to reach the broadest audience, and they also tend to offer the greatest variety of discounts and customer perks.

The downside is that if you have a less-than-perfect driving record or a high-risk profile, these companies will likely charge you substantially higher premiums or refuse to cover you.

But if you have a low-risk profile and a solid credit history, you can get a good deal on monthly premiums and enjoy customer loyalty rewards the longer you stay with them.

What Do Auto Insurance Companies Do, Exactly?

In one way or another, auto insurance is something you are legally required to purchase before you get behind the wheel of a car.

Auto insurance companies provide the insurance coverage you need to drive legally. They also help you with filing claims, legal battles, and the ins and outs of recuperating financial losses in the event of an accident.

Remember that auto insurance companies are for-profit businesses, and paying as little as possible on claims is in their best interest. At the same time, it is also in their best interest to fight for you and collect on claims if you are the one who is not liable in an accident.

Suppose the accident is not your fault, and the other party or other parties are found liable. In that case, your auto insurance company and their legal team will do their best to make sure that the at-fault party’s insurance company pays out the claims they file and get you the money you’re owed for your losses and damages.

If the accident is your fault, on the other hand, then your auto insurance company will have to strike a fair balance between paying out what you owe the injured party in losses and damages and protecting their profits. In the aftermath of the accident, you will likely see a price hike in your monthly premiums.

After everything is said and done, it is not uncommon for people to lose their insurance coverage and search for a new provider in the event of a serious accident. 

If the fault is split between both parties, your financial disbursement is tied to the percentage of fault you are assigned. For example: if a judge rules that the accident was 40% the other driver’s fault, you receive 40% of the cost of the damages.

And it no-fault states you would file a claim against your liability coverage even though the accent is not legally or technically your fault. For a claim against your Comprehensive or Collision coverage, you will also file a claim directly with your insurance company to get your vehicle repaired or replaced. 

Claims

Filing claims with your auto insurance company can be a tricky business. It’s helpful to know what to expect, even if you don’t anticipate getting into an accident.

Furthermore, even if the accident is not your fault, you need to be prepared to stay on top of all of the paperwork and the process to make sure you get what you are owed – don’t just automatically assume by default that your insurance company will do all of the heavy liftings for you. Here are the most important tips to keep in mind when filing a claim: 

Don’t hesitate.

Contact your insurance agent right away in the event of an accident. Make sure you get all pertinent due dates and deadlines related to your claim as soon as possible and do your best to file as much paperwork as quickly as possible.

Many of the claim filing processes is time-sensitive, and the more you hesitate, the less likely you are to get paid a fair amount.

Communication is key.

Ensure you have a reliable way to get a hold of your auto insurance company or the agent they have assigned you. Also, ensure you collect all the paperwork needed for filing your claim, including police reports, medical bills, body shop repair quotes, and other relevant documentation. Make as many copies as you need to file the paperwork properly and to keep records for your personal use. 

Follow through.

Make sure you see everything to the end until you have received clear communications and documentation from your insurance company (as well as any other insurance companies involved in the claim) that things have been settled. Don’t sit by the phone waiting for someone to contact you – be proactive!

If you feel you have been treated unfairly or did not receive a fair settlement for a claim you filed, you may have legal recourse. Your insurance company it’s not the end-all, be-all in the claims process.

You can contact your state’s Department of Insurance if you feel you have been treated unfairly and wish to seek litigation against your insurance company (or the at-fault driver’s insurance provider).

Remember that insurance companies have large and well-paid legal staff on their payroll – so you may be in store for an uphill battle. 

Finding the Best Auto Insurance Company

So now that you have a better idea of what auto insurance companies are available and what you should expect for them as a customer, how do you find the right auto insurance provider for you?

The first step is to do your research. As we said earlier, not all insurance companies are created equal. If you don’t shop around, you could end up with expensive premiums, low-quality service from your insurance provider, or both.

Shopping around online for quick, accurate auto insurance quotes is probably the best way to start your search.

But don’t underestimate the old-fashioned approach, either. Sometimes picking up the phone and getting a quote directly from an insurance agent can pay off – especially if you have the chance to ask them about discounts you could be eligible for, which you may not otherwise know about.

Here are some other important things to consider when you’re shopping around and comparing different auto insurance companies: 

Customer service

Finding the cheapest monthly premium is in everything. The old saying “you get what you pay for” applies to auto insurance companies like it does anything else in life.

If you find a good price-wise provider, make sure to research their customer service reviews. After all, you don’t want to be pulling your hair out and losing sleep working with a difficult auto insurance company if you have to file a claim and they don’t want to cooperate with you.

Claims filing process

Speaking of filing claims, what is their claims filing process like? Make sure to find that information before you sign any paperwork or give them your money.

Not all insurance companies handle the claims filing process the same way. Some auto insurance companies may provide 24-hour customer service and support for claims filing and have multiple ways to get in touch with them.

Other companies may limit your claims filing interaction with them to telephone only during regular business hours. This can be problematic for obvious reasons.

Communication

How do you want to communicate with your auto insurance provider? Are you a tech-savvy millennial who wants to handle most of your communications online?

Or are you older, and would you prefer an old-fashioned touch with a phone call from a real person who works for the company?

Communication is important when it comes to doing business with your provider. So make sure their communication preferences match well with your own.