Car Insurance Quotes

Statistically speaking, half of the insurance buyers in the U.S. are paying more for their car insurance than the other half. Which side of the line are you on?

There are many factors that go into determining the answer to this question. By understanding these factors, you are in a better position to influence your own automobile insurance costs.

Factor 1: The make and model of the car you drive.

Insurance rates vary by type of vehicle because some autos simply cost more to repair than other autos. Plus, as everyone knows from auto safety tests, you are less likely to be injured or less likely to suffer a serious injury in some autos than in others. Additionally, studies have shown that some vehicles are more likely to cause injury than others if they are involved in an accident. For example, picture a collision between a 2007 Hummer and a 2007 Mini Cooper. Which vehicle would you prefer to be occupying? While insurance premiums are usually not a major consideration in the decision to buy a particular auto, the fact is that the difference in insurance cost can be hundreds of dollars a year.

Factor 2: Your driving experience.

Well, there isn’t much you can do about this. History is history. But you can make sure that your insurance company has your correct history and the correct facts about any accidents in which you may have been involved. If you’ve had an accident and the total property damage was less than $1,000, your insurer might not charge you extra for having had it. You can also shop around to see if any insurers in your area are willing to overlook the first accident if you become their customer.

Factor 3: Who is the primary operator of your car.

For single-car owners, it doesn’t matter who in the household is the primary operator. The vehicle will be rated according to the highest rated operator in the house. But, for multi-car owners, it does matter who is the primary operator. The ideal situation from the policyholder’s standpoint it to have the highest rated operator (i.e., youthful operators, drivers with the most accident points, drivers without driver training or without a good student rating) to be listed as the primary operator of the lowest rated vehicle (usually the vehicle that is the least expensive to repair).

Factor 4: How your auto is used

As a rule, the more the vehicle is on the road, the higher will be the rating classification assigned to it. Thus, a vehicle that is used for business will take a higher classification than one that is just driven to and from work. A vehicle that is driven to and from work 15 miles one way will take a higher rated classification than one the is only driven to work 5 miles one way. The lowest rated classification is “pleasure use” and policyholders are often unaware that the definition of “pleasure use” include drive-to-work less than 3 miles one way. So, if you live 2 miles from your office and you drive to work, your auto should be rated as “pleasure use”. Otherwise, you are paying more for your insurance than you should.

Factor 5: What kind of insurance coverage you have.

With jury awards in accident cases continually on the rise, it is always a good idea to have as much liability insurance as you can comfortably afford since the basic goal of every policy is to protect you against the catastrophic loss. The goal is not to protect you against every loss because many losses can easily be afforded. The strategy, then, is to find a balance between what you can afford to pay for liability insurance vs. what losses you can absorb on your own and you do the latter through the physical damage deductible you select for losses from collision and other than collision causes. Many people have policies with small deductibles when they could easily afford deductibles of $500, $1,000 or more. If you can afford the risk, why not take the savings the higher deductibles offer and use it to buy more liability insurance or go to the movies, have a nice dinner out, etc. Whatever you want to do.

Factor 6: Available discounts.

Different insurers will offer different discounts but many will offer the same ones. Most insurers, for example, will offer discounts for anti-theft devices in the automobile and for youthful drivers who maintain a good student standing (B grade average or better). Some insurers will offer discount for the number of years you remain accident-free with them. Others will offer a discount if you also have your homeowners insurance with them. Be sure you know what discounts are available from your insurer. Your agent should be able to help advice you in this.

Factor 7: Where your vehicle is operated.

Now this factor is one with which you can do very little unless you are willing to move someplace where the cost of auto insurance is less – and for most people that isn’t a deciding factor in choosing where to live. However, the fact is that it costs more to insure a vehicle in some parts of the country than in others. According to the Insurance Information Institute, it costs six times as much on average to insure an automobile in Detroit, Michigan, than it does to insure the same vehicle in Roanoke, Virginia. Kind of ironic when you think about it since Detroit is the historical home of automobile manufacturing. The Insurance Information Institute’s ranking of automobile insurance costs in all 51 jurisdictions for the years 2000 – 2004 (the latest years for which data is available) is shown below.

Source: http://www.iii.org/media/facts/statsbyissue/auto/

To find out which were the least expensive to insure autos in 2007, we took the 20 most popular autos as determined by number sold and priced the insurance across three states, New Jersey, South Carolina, and North Dakota. As you can see from the above, these three states represent the most, the middle, and the least expensive states for auto insurance. Our fictitious insured was a 45 year-old single male, with no accidents or driving points and possessing a college degree. For insurance coverage, we selected liability limits of $100,000 per person, $300,000 per accident, Uninsured Motorists, Personal Injury Protection (where applicable), $500 deductible Collision and Other Than Collision coverage. Our insured drives 5 miles to work one way.

According to our study, the ten least expensive to insure of the 20 most popular 2007 models are (from least to most expensive):

1. Chevrolet Silverado
2. GMC Sierra Pickup
3. Chrysler Town & Country
4. Ford Escape
5. Ford Econoline Club Wagon
6. Chevrolet Impala
7. Honda Civic
8. Ford Fusion
9. Ford F150 Pickup
10. Toyota RAV 4

The above list clearly does not include many automobiles that would be less expensive to insure. The 2007 Chevrolet Aveo, for example, would cost less to insure than any of the vehicles on our list but the Aveo did not make the list of the 20 most popular vehicles for 2007. Perhaps next year.