Comparing car insurance quotes is a quick way to save hundreds of dollars each year. With online tools and a little know-how, consumers can easily compare auto insurance rates and choose the right product for their needs.
The average savings is between $300 and $3,000, depending on your state. Imagine what you could do with that extra $3,000.
On this page, we’ll take you through what goes into auto insurance rates, how to shop for the best deals, how much auto insurance you may need, and how to compare quotes.
What goes into auto insurance rates?
Insurance companies consider multiple factors when determining auto insurance rates:
- Your location, including your city and state
- Type of car
- Your claims history and driving record
- How much you drive
- Your credit history (nearly all states allow insurers to use this information)
- Your deductible
Your address can result in much higher or lower rates. Insurers look at the claims history for your area and neighborhood. This allows insurers to gauge risk and figure out what areas are more likely to have claims.
Many of these metrics are beyond your control or hard to fix. However, the deductible is one way to lower rates.
A deductible is what you pay when you file a claim through your collision or comprehensive coverage. Deductibles are usually between $250 and $1,000.
So, let’s say you got into an accident. Your vehicle suffered $2,000 worth of damage. You have a $1,000 deductible. That means your insurance company would pay $1,000 of the damages and you’d pay the other half.
The higher your deductible, the less you’ll pay on car insurance premiums.
Here are the national averages for increasing your deductible:
- Raising the deductible from $250 to $500 — $167 savings, 8.3 percent discount on average
- Raising the deductible from $500 to $1,000 — $201 savings; 10.8 percent discount on average
If you’re able to afford a higher deductible, that’s a great way to reduce car insurance premiums. Just make sure you have money set aside for the deductible in case you need to file a claim.
- Shopping for car insurance every year is a good practice and can save you between $300 and $3,000 a year.
- Raising your deductible from $250 to $500 can save 8% on average and from $500 to $1,000 it’s 10%.
- To shop for the best insurance, get at least three quotes for the same coverage and research the company’s reputation.
- Decide how much liability coverage you need, whether you need comprehensive and collision coverage or not. Also consider getting uninsured motorist coverage.
- Check to see if you qualify for any discounts such as low mileage, anti-lock brakes, or multiple vehicle discounts.
- Even high-risk drivers can benefit from shopping for auto insurance.
How do you shop for auto insurance?
Shopping for auto insurance is easier than ever. Now, you can shop and compare rates in front of your computer rather than calling each insurer to track down quotes.
The basics of car insurance shopping remain the same. You want to:
- Get at least three quotes for the same coverage
- Research each company’s reputation
- Use the tools that are at your disposal
Before starting your comparison shopping, you first need to figure out exactly what you want. How much liability coverage do you want? It’s required by law in most all states, but minimum amounts may leave you underinsured. Higher limits don’t cost much more but give you a lot more protection, so decide if you want $50,000 or $100,000 of bodily injury liability coverage. Remember this is what covers damages you do to others.
Do you need comprehensive and collision coverage? If your car is financed or leased your finance company will require it. If your car is less than 10 years old and paid off, it’s still smart to carry it.
By answering these questions, you can get quotes for the same coverage from multiple insurers.
You also want to make sure you get as many discounts as you can. Discounts could save you 25% off your premium.
There are potentially dozens of discounts, including:
- Low mileage
- Bundled policies
- Good driver
- Good student
- Anti-lock brakes
- Multiple vehicles
Don’t assume the insurer will offer these discounts automatically. Ask about them.
What’s the right amount of auto insurance coverage?
Choosing auto insurance is a personal decision. There is no blanket answer to what’s right for everyone.
One person may want a high deductible, which means lower rates. Another person may want an add-on like rental car coverage or custom equipment coverage.
The vehicle also plays a role in how much coverage to get. An older, used car may not be worth much. You might want the minimum coverage for that. However, a new vehicle needs full protection – meaning liability plus comprehensive and collision.
You can figure out your auto insurance needs on Insure’s Insurance Advisor.
There are four parts to an auto insurance policy: liability, comprehensive, collision, and uninsured motorist.
The part with the least amount of wiggle room is liability. This section covers property damage and medical expenses to other people, those that you may harm in an accident. If you have a home or other assets, such as a large savings account, you’ll want to choose a high amount of coverage. If you have a teen driver, it’s imperative to get higher coverage limits.
It’s simple, don’t skimp on liability insurance. A good place to start is $100,000 per person for bodily injury, $300,000 per accident, and at least $50,000 for property damage.
Unlike collision and comprehensive, your car’s age and condition don’t play a role in liability.
Collision and comprehensive coverages cover your vehicle, whether you’re at fault or not in an incident. Cutting collision (damage to your car from an auto accident) and comprehensive (damage to your car not caused by a car crash, such as fire or theft) is one way to reduce your rates. The average cost of collision is $526. The average cost of comprehensive coverage is $192. You could save by dropping comprehensive coverage but we’d only recommend this if you have an older car or have the money to repair or replace your car if it was in an accident.
Uninsured motorist coverage, while a nice perk, if this is not required coverage in your state you don’t have to include it in your policy. The coverage protects you and your passengers, in case of injury if another driver, who was uninsured, is at fault in an accident that injuries you.
When should you compare quotes?
Every year – always! You should compare rates at least once a year but twice a year is even better. We recommend that you do it in the weeks preceding your renewal,
Why? This is a big purchase, and one that could make or break your bank account if you don’t shop around to get the best rates and best coverages for your situation.
You want to feel confident that the policy you choose will suit your needs now and in the future. Let’s also not forget the savings that could be found between different policies. You want to be as safe as possible without breaking the bank.
Don’t think twice about comparing auto insurance rates. If you find your current insurer is the cheapest, you can stay with them, if not, who doesn’t want to save money by switching?
Once you get a few quotes and compare auto insurance rates that meet your needs and are affordable, you still need to do some homework before making your final choice.
You want to check an insurer’s history and reputation. Check Insure.com’s Best Insurance Companies to get reviews of car insurers.
How should high-risk drivers compare quotes?
Being a high-risk driver complicates matters. Don’t fret. There is a product for almost everyone; however, the rates – and coverage – may vary.
High-risk drivers may have a DUI or multiple tickets on their driving records, or have multiple car insurance claims. Being high risk means you pose more risk to an insurer so you will be charged more to purchase a policy.
Many insurance carriers offer special high-risk policies, but for those who don’t qualify, there’s always the nonstandard policy or a policy from the state insurance assigned-risk pool.
Both of those options typically come at a significantly higher rate than standard policies. But it doesn’t mean you shouldn’t shop around. There are a variety of insurers that may offer you a policy and for various premium payments. Also, with a clean driving record for a few years you can qualify for a standard policy again and be able to compare car insurance quotes for better rates. So shop while you are considered a high risk driver and again once you record is cleaned up some.
It’s simple, no matter whether you have a perfect driving record or a list of accidents, make sure you shop around and compare car insurance quotes so you can know you got the best deal possible on your car insurance policy.