I have priced auto insurance in Connecticut with Encompass (formerly
CNA), Allstate and Liberty Mutual for a new car for a 21 year old
female driver with a perfect driving record and good credit history.
For the same levels of coverage, why would Encompass have the highest
rates if they are essentially insuring the same auto and same driver?

Is it possible that Encompass insurance company includes broader
coverage and/or less exclusions? What are the other factors that need
to be considered to evaluate three qoutes for the same coverage?

Dear imjustnextdoor,

Auto insurance quotes can come through in a surprisingly broad range,
even for identical coverage.

The first thing to do is to make sure that you are making an
apples-to-apples comparison - i.e., that the actual policy provisions
are the same.  I suggest that you go to one of the online quotation
services, such as Quotesmith, and generate an "instant" quote.  (They
say instant - I say it takes 5-10 minutes to input all the
information, assuming you have everything handy, lol.)

I just went through that exercise - pretending to be a Connecticut
resident looking for auto insurance on a 2002 Jeep - and I was struck
by the wide range in quotes for identical coverage.  They gave me four
quotes.  Travelers was the lowest, at $738 for 12 months, then came
The Hartford ($776), Kemper Direct ($919) and Allmerica Financial
($1042).

BTW, I'm not necessarily advocating that you buy an auto policy online
- that's up to you.  I'm simply saying that you can use the online
services to help you develop an additional benchmark.  Also, the
exercise of working through their applications will help you to
identify the major coverage decision areas, and to decide where you
want to set your policy limits.  Some of the coverage decisions are:
 
a.  Bodily Injury & Property Damage Coverage
($100,000 person/$300,000 accident/$50,000 property would be typical
choices)
b.  Uninsured/Underinsured Motorist ($100,000 person/$300,000 accident
would be typical)
c.  Medical payments coverage (yes or no)
d.  Comprehensive coverage (You might choose to have no coverage if
the vehicle itself was worth very little money.  If you choose to have
coverage, then you need to choose a deductible level.)
e.  Collision coverage (Choose whether or not to have coverage and if
you choose to have coverage, then choose a deductible level)
f.  Towing coverage
g.  Rental coverage

Once you have gone through the online exercise and settled on
coverages and limits, then you can go back to Encompass, Allstate, and
Liberty Mutual and ask them to re-quote for you using precisely the
parameters that you give them.

Now . . . let's say that you have done all that and obtained quotes
that reflect identical coverage, but they are still in a broad range. 
Why might that be?

1.  Regulatory Issues 

Auto insurance rates do differ very significantly between states,
because of differences in state regulation (tort states vs. no-fault
states vs. add-on states, differences in the level of mandated
coverages, etc.)  As far as I know, there are not regulatory issues
that would affect pricing within the state of Connecticut.

2.  Auto insurance companies differ very significantly in how they
manage claims.  Generally, the companies with the cheapest policies
also have the most aggressive claims management (meaning, they try
very hard not to pay more than they have to).  A high-end company like
Chubb caters to the very wealthy.  They pay a substantial premium for
insurance, knowing that if and when they have a claim, Chubb will
settle it quickly and without fuss.  A low-end company like Geico
provides cheap insurance and makes its hard to collect on it.  In
other words, you get what you pay for.

You might want to look at consumers' comments about different auto
insurance companies, here:
http://www.carreview.com/Auto+Insurance/PLS_1823crx.aspx

3.  Different companies will set different prices for auto insurance,
depending on whether the business has been profitable for them. 
Companies may raise or lower their prices in order to bring in more or
less business.
 
Additional resources:

Auto insurance basics
http://www.insure.com/auto/basics.html
This insure.com article does a very good job of walking through the
elements of an auto insurance policy.

Nine ways to save on your auto insurance policy
http://www.insure.com/auto/autosave.html
Read this in conjunction with the first article.  It discusses the
importance of comparison shopping, the relationship between raising
your deductible and dropping your premium, and the pros and cons of
dropping collision and/or comprehensive coverage on older cars.

Tips for Saving Money on Auto Insurance
http://www.naic.org/pressroom/consumer_alerts/tips_for_saving_auto_insurance.pdf
From the National Association of Insurance Commissioners, 9 tips to
save money on auto insurance.

Connecticut auto insurance resources & information
http://www.auto-insurance-quotes-plus.com/Connecticut-auto-insurance.html

How do you shop for auto insurance?
http://www.auto-insurance-quotes-plus.com/auto-insurance-guide-2.html
This article says:  "Statistics show that one out of every three
people who shop for insurance online save $500..."

Dear imjustnextdoor,

It’s me again!  (Or ought I to say, it is I?)  I’m so relieved!  My
computer froze on me, but thank goodness it somehow transmitted the
work I had done so far on your question.

Returning to your original questions, you had asked:

Is it possible that Encompass insurance company includes broader
coverage and/or less exclusions?  Absolutely!  That’s very possible. 
My first comment addressed the issue of obtaining comparable quotes.

Then you asked, “What are the other factors that need to be considered
to evaluate three quotes for the same coverage?”

1.	Price

Price is the first and foremost consideration for most consumers.

2.  Customer service track record and reputation

Customer service is an important consideration.  It's bad enough to be
in an accident - it makes it even worse if you have to fight with your
insurance company to get the coverage for which you have paid.

The Connecticut Department of Insurance publishes a list of auto
insurance companies, ranked by their complaint ratios.  One would be
the best ranking.  There are 26 companies with a “1” rating; these 26
companies had no consumer complaints – or at least none that made it
to the Insurance Department.    The three companies you mentioned are
ranked quite similarly – Liberty Mutual is #36, CNA is #42, and
Allstate is #48.  See “Annual Ranking of 2000 Calendar Year Automobile
Insurance Complaints”
http://www.state.ct.us/cid/

If I were you, I would ask around at work and in your community to
find out which companies people are using for auto insurance coverage,
and what they think of them.

3.  Financial stability

You should check the ratings of these companies.
http://insurance.about.com/cs/companyratings/

4.  Method of interaction (internet vs. agent vs. telephone)

Finally, I think it is important to choose the method of interacting
with the company with which you are most comfortable.  I (personally)
continue to be a believer in independent insurance agents.  The really
good ones (and there are many) can help you choose the coverage that
is right for you and can advocate for you vis-à-vis your insurance
company, should the need arise.  On the other hand, auto insurance
coverage is fairly straightforward, and you may prefer to do your own
research and decision making.

      


Additional Resources

The USAA Educational Foundation has some excellent articles, including

“Selecting an Insurance Company”
http://www.usaaedfoundation.org/insurance/auto/ai08/ai08.htm  

“How Are Rates Determined?”
http://www.usaaedfoundation.org/insurance/auto/ai06/ai06.htm

“Rate Comparison Worksheet”
http://www.usaaedfoundation.org/formsAndLists/ins_auto_worksheet1.htm

Search Strategy:

Online auto insurance quotes
Differences auto insurance rates 
Reasons rate differences auto insurance

Good luck with it!

Thank you for the comments. I believe you have answered my questions!