Edmunds.com Editors Shop for Auto Insurance on Their Personal Cars

With money tighter than ever, it was time for us to see if we could do better than our existing auto insurance policy. Our current insurance company (which shall go unnamed) was known for its low premiums. Would it be possible to meet or beat those rates, while possibly improving other aspects of our coverage?

We thought about trying an auto insurance broker who represented several different brands of car insurance, but we wanted to keep our options open to the entire range of companies. Armed with our current policy's declaration page, we set out on a hunt for the best value.

Step 1: Check Customer Satisfaction Scores

We started by looking at the results of the J.D. Power National Auto Insurance Survey, in which more than 21,000 insurance policy holders rated their insurers. This extremely useful chart let us sort results by any of five criteria: Overall Experience, Policy Offerings, Pricing, Billing and Payment, or Contacting the Insurer. We noticed that our current insurer was low down on the ranking list.

Of the five criteria, our two highest priorities were Policy Offerings and Pricing. After playing around with the chart, we narrowed down our choices to Amica (a multiyear award winner), Automobile Club of Southern California (ACSC) (which is part of AAA), Erie, Auto-Owners and American National Property and Casualty (ANPAC). A quick review of their respective Web sites revealed that Erie and Auto-Owners did not provide coverage in our state, thus narrowing the field to three — a great number for comparing quotes.

Step 2: Check Companies' Financial Strength

Given the state of the economy, our next step was to verify that the insurance companies would be around for the long haul — and would have the resources to pay their claims — by going to A.M. Best's Rating Center. There, we reviewed the three insurers' "Financial Strength Ratings" and "Issuer Credit Ratings." Not surprisingly, all three companies had solid financials.

Step 3: Know What Coverage You Want

The insured parties would be one man and one woman, 45 and 44 years old, respectively.Before getting our quotes, we made sure of the coverage we wanted:

• Bodily injury: $250K bodily injury per person/$500K per accident
• Property damage: $100K
• Medical payments: $5K
• Uninsured motorist: $250K bodily injury per person/$500K per accident
• Deductibles: $250 for Comprehensive, $500 for Collision
• Uninsured deductible waiver included
• Car rental coverage

Raising the deductibles further would lower our rates, but we wanted to use the current coverage levels of our policy for the comparison.

Step 4: Try To Compare Apples to Apples

We used both the Internet and the telephone to gather our quotes, but didn't identify ourselves as being with Edmunds. Each insurer promoted its advantages, sometimes bullet-pointing them on its Web site.

Amica, for example, waives the deduction for depreciation if your new vehicle is declared a total loss within the first 180 days of ownership. It also waives the deductible for lock replacement (if your keys are lost or stolen) and on glass repair.

ACSC, for its part, offers free identity theft monitoring and an immediate repair program at its many authorized service centers. And the list goes on, making it almost impossible to do a perfect comparison.

Even trying to get coverage limits to line up exactly proved to be a challenge. While ACSC offers split limit coverage in our state (250/500/100), Amica offers only single-limit coverage — a single dollar amount that covers both bodily injury and property damage. To be fair to Amica, we priced out both $300K and $500K per accident to see what happened.

We asked each company about every discount we were entitled to. We received discounts for being good drivers (no history of accidents), insuring several vehicles on one policy, having airbags and anti-theft devices (alarms) in the vehicles, having LoJack on one vehicle and driving 10,000 miles or less in each car per year.

Speaking Our Language: $$$

Although it's not considered a discount, ACSC offered something unique: a cash dividend. The organization "rebates" a dividend of 7-14 percent of your annual premium at the end of the year (depending on how long you've been insured with them), applying it toward the following year's premium. Amica offers a similar dividend — up to 20 percent on parts of the policy coverage, according to the agent we spoke with — but they can't offer it in California, which made a significant difference in our pricing comparison.

Note that no insurance company is allowed to use the promise of a dividend in its marketing efforts because it's considered unfair competition, and those dividends are not guaranteed. Still, when asked, our ACSC agent said his company has paid out an average 9 percent dividend over the last 15 years. So it's crucial that you ask about the possibility of a dividend when you shop for a quote, because the sales agent won't offer that information.

Why can some companies offer a dividend and not others? Because of their corporate structure. According to the Insurance Information Institute, insurance companies are generally either stock-form entities, such as Allstate or MetLife, whose shares are traded on the New York Stock Exchange (NYSE), or mutually owned enterprises, like State Farm, which offer dividends on occasion to its owners/policyholders.

The cost difference between ACSC and Amica came down to very little — at least to start. We'd be paying more to ACSC the first year, but the assumed dividend would bring the second year's cost down to $17 less than Amica's. More importantly, that dividend would continue to grow for years to come. ANPAC's quote was so far out of line with the others that we had trouble believing it, but we double-checked it.

*Since Amica offers only single-limit coverage, the price above represents $300K of liability coverage. We also priced both ACSC and Amica at $500K for bodily injury. At that increased coverage level, ACSC's quoted price went up about $58 (before rebate) — well worth the increase, whereas Amica's rose $300.

Step 5: Consider More Than Money

So if the money's almost even, what are some of the other factors to consider when choosing an insurance company? We've already mentioned ACSC's immediate repair program, which authorizes a shop to begin repairs on your car as soon as the tow truck arrives with it. But equally important is your personal relationship with the company and/or its agent.

While Amica scores higher than ACSC in the J.D. Power category for Contacting the Insurer, Amica's closest physical office is easily an hour's drive from our office. ANPAC's nearest agent is also a long distance away — and the agent's English was so difficult to understand that, even if the price was right, there was little hope of good communication. If we want to speak with our agent at ACSC, though, we only need to walk a few blocks to the local office. The ACSC agent consistently responded quickly and answered all our questions patiently over the phone and via the Internet, winning our loyalty.

Be aware that combining an auto policy with a home or life insurance policy would change the pricing structure dramatically. But for now, we're satisfied that we were able to lower our auto premiums over the long run, while upgrading to a very highly rated company with a local agent we can relate to. Mission accomplished.