Cheap or Inexpensive Auto Insurance? The Difference Could Cost You a Fortune.

When you are shopping for auto insurance, chances are you want the cheapest prices, but you also want a good company that has excellent customer service and is financially secure. That’s the difference between cheap and inexpensive.

Inexpensive products and services have value. They will do what you’re paying for, but cost you less in the process. Cheap ones, on the other hand, are just that, cheap. They’ll cost you less money, but they are often not a good value. In the long run, if you’re paying less, but not getting what you want, isn’t that money just wasted?

Car insurance is no different. Some companies charge less than others, but unless they pay their claims and stand behind their insured, what good are they? That is why customer satisfaction and financial security ratings should be part of any equation when you are shopping for a car insurance company.

That’s why the paragon of customer satisfaction, JD Power rates insurance companies on how they do business. The rankings include how fast they pay their claims, their rates, response time, the overall user experience, and the breadth and depth of their offerings.

Standard and Poors and AM Best are two of the leading firms that rank insurance companies on financial strength and creditworthiness. Both of these are important criteria by which to judge a company that is supposed to protect your assets.

Combining information from these two companies paints a fairly accurate picture of which companies are inexpensive, but not cheap. They’ll have low rates, but you’ll get the insurance services you’ve paid for, should you ever need them.

Amica Mutual Insurance – Amica Mutual has been around for over 70 years ,and consistently earns some of the top ratings. They have an A++ rating from AM Best for financial security. They also consistently lead JD Power’s customer satisfaction surveys. In 2008 they were awarded the top rating.

This rating also includes their rates, which are among the lowest available for auto insurance. In fact, they were the only auto insurance company, other than USAA (a private company only open to U.S. Military members, Military veterans, and their families) to receive the highest rank (5 / 5)in every category.

State Farm – State Farm was the only large, national auto insurer to get 4 / 5 or better on the overall experience section of the JD power survey, besides USAA and Amica Mutual, which garnered 5 / 5. Like Amica Mutual, they also get an A++ from AM Best for financial strength. They were rated only 3 / 5 (about average) for rates however, meaning you’ll probably pay more, but not always.

USAA - If you meet the military service or ROTC requirement for USAA, they also got stellar ratings from J.D. Power, with 5 / 5 across the board, including rates. That means their rates are lower than most other companies are. USAA is also A.M. Best A++ rated for superior financial strength.

These companies have the financial strength to support their customers and have demonstrated they will actually do so. That doesn’t mean no one has ever had a bad experience, but that most people found their expectations exceeded. So, if you are looking, there is cheap auto insurance, and there is inexpensive auto insurance; don’t confuse the two.

To discover more on how to save money and still get great insurance see the Insider's Guide to Cheap Car Insurance for a Young Driver