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The same car insurance coverage can vary greatly in cost depending on the insurance company you choose and other factors. That’s why it’s so important to compare auto insurance rates before buying auto insurance.
In this article, we’ll discuss how to compare car insurance rates and what to look for when making your decision.
Here’s what you need to know about comparing car insurance:
How to compare car insurance
Comparing car insurance policies can help you find the best deal on the coverage you need. Follow these steps to compare car insurance rates in the most efficient way:
- Determine how much insurance you need. Most states have legal requirements for minimum levels of auto insurance you must carry. But usually you want more than that. Consider purchasing higher liability coverage to protect yourself financially if you have an accident. Also consider collision and comprehensive car insurance. While these aren’t required by law by your state, they help pay to repair or replace your car if it gets damaged. If you have financed your vehicle, your lender may require you to carry these two types of policies.
- Request quotes from various insurers. Once you know what coverage you need, you can get quotes from insurance companies that offer it. This is generally a simple and straightforward process. You can call the insurance company or go to its website and fill out a form with some personal information and details about your vehicle. You will usually receive a quote within minutes.
- Be sure to compare similar policies. Before looking at the prices of each car insurance policy, make sure they all offer the same level of coverage. Also look at the deductible. If the coverage ratios and the deductible are equal, you can make a fair comparison between the rates.
- View the listed rates. Now you can compare the prices of any policy you are considering. You may be offered a monthly price, or the total price for a six-month or twelve-month policy. Make sure it’s the same between the policy rates you’re considering.
- Choose the best deal. The lowest rate is often the most attractive choice. However, you should also consider things like ease of claim and customer service. Always make sure that the insurance company you choose is licensed to do business in your state and has a solid reputation.
Factors that affect car insurance rates
Insurers look at many factors when determining your car insurance premium. These can be:
- Where you live: Insurance may be more expensive in areas with a higher cost of living, as it may cost more to repair your vehicle. People in urban areas also tend to pay higher rates due to more vandalism and accidents.
- Your age and gender: Young drivers are more likely to have accidents than drivers with more experience and therefore pay higher rates. Men are also generally riskier drivers than women and often pay more for car insurance.
- Your vehicle and how you use it: A more expensive car costs more to insure. If you drive frequently, you may also pay more for car insurance than someone who rarely uses their vehicle.
- Your driving record: Insurance companies consider your driving history, including speeding and other violations, as well as accidents. A clean file can mean a lower insurance rate.
- Your credit score: Insurers also often use a credit-based insurance score to measure your risk. Your insurance score is based on things like your payment history and the use of available credit. People with higher credit scores are generally considered to have a lower risk of making a claim, leading to lower premiums.
- Your Coverage Levels: More coverage means a higher car insurance premium.
- Your own risk: A deductible is the amount you pay out of pocket for a claim before the insurance kicks in to cover the rest. If you opt for a higher deductible, you pay more when you file a claim, but your monthly premiums are generally lower and vice versa.
Checking out: What happens if you get into an accident without car insurance?
How to get a low auto insurance rate
These simple steps can help you find a low auto insurance rate and still get the coverage you need:
- Shop. Insurance companies can offer significantly different prices. Don’t just pick the first policy you come across. Shop around and get auto insurance quotes from multiple insurers to find the best deal for your situation.
- Opt for a higher deductible. The higher your deductible, the lower your monthly premium. To save money on your insurance rate, choose a deductible that is relatively high, but make sure it fits your budget if you need to make a claim.
- Pay it Forward. Some insurance companies may charge you a lower rate if you choose to prepay the full six- or twelve-month policy in advance instead of paying monthly.
- Bundle insurance. Bundling is taking out multiple insurance policies with the same insurer, such as building and car insurance. With many insurers you get a discount on one or both policies if you bundle them. You can compare rates on insurance bundles just as you would on an individual policy.
- Take advantage of discounts. Some insurance companies offer discounts if you take a defensive driving course, install anti-theft devices, or insure more than one vehicle. You may also qualify for a group rate through your university alumni association or a non-profit organization that you are a part of.
- Improve your credit score. Auto insurance providers may base your rate in part on your credit history. With good credit, you may find yourself receiving lower auto insurance rates. The best way to improve your credit score is to focus on making all your payments on time, every time.
- Drive safely. Avoiding accidents and tickets will lead to lower car insurance rates. Some insurance companies even offer discounts to customers who have a clean criminal record for a certain period of time.
Frequently asked questions about car insurance quotes
Here are the answers to some of the most frequently asked questions about car insurance quotes.
Does the best auto insurance rate give you the best coverage?
Not necessary. You can probably purchase a minimum auto insurance policy that meets your state’s legal requirements for much cheaper than a comprehensive auto policy that better meets your needs. But if you have an accident, you want to be sure that your finances are protected.
Therefore, in many cases it is better to pay a little more for better coverage. Start by figuring out how much coverage you’re comfortable with, then compare rates for policies that meet those requirements.
Learn more: Comprehensive car insurance: what it covers
What information do I need to get a car insurance quote?
While every insurance company is slightly different, you’ll probably need to provide the following information to get an accurate car insurance quote:
- Personal information: This includes your name and address, driver’s license number, social security number and contact details.
- Information about your vehicle: This can be the year, make and model. You may also need to provide the mileage on the vehicle, whether it was financed and for how much, and your vehicle identification number (VIN).
- Safety features: Some insurance companies may ask about things like whether your car has an anti-theft device, anti-lock brakes, or passive security systems.
- Information about how you drive: Your car insurance agent may ask you how many miles you typically drive per day or week and where your car is parked during the day and night.
- Information about your household: You will probably need to inform your insurance company about the ages of others in your household, especially other drivers in your family.
Disclaimer: All insurance related services are offered through Young Alfred.