How to Compare Car Insurance Rates

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The same auto insurance coverage can vary greatly in cost, depending on the insurance company you choose and other factors. This is why it is so important to compare auto insurance rates before settling on an auto insurance policy.

In this article, we’ll cover how to compare car insurance rates and the key things to look for when making your decision.

Here’s what you need to know about comparing auto insurance rates:

How to compare auto insurance rates

Comparing auto insurance rates can help you get the best deal on the coverage you need. To compare auto insurance rates in the most effective way, follow these steps:

  1. Determine the amount of insurance you need. Most states have legal requirements regarding the minimum levels of car insurance coverage you must have. However, you will usually want more than that. Consider purchasing higher liability coverage to protect yourself financially in the event of an accident. You should also seriously consider collision damage waiver and comprehensive auto insurance. Although these aren’t legally required by your state, they help pay to repair or replace your car if it’s damaged. If you have financed your vehicle, your lender may require you to hold both types of policies.
  2. Get quotes from several different insurers. Once you know what coverage you need, you can get quotes from the insurance companies that offer it. This is usually a simple and straightforward process. You can either call the insurance provider or go to their website and fill out a form with personal information and details about your vehicle. You will usually receive a quote within minutes.
  3. Be sure to compare similar policies. Before you start looking at the prices of each car insurance policy, make sure each offers the same level of coverage. You should also consider the deductible. If the coverage levels and deductible are the same, you can make a fair price comparison.
  4. Review the prices listed. You can now compare the prices of each policy you are considering. You may be offered a monthly price, or the full price of a 6 or 12 month policy. Make sure it’s the same between the key rates you’re considering.
  5. Choose the best offer. The lowest rate is often the most attractive choice. However, also consider factors such as ease of filing a 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.
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Factors That Affect Auto Insurance Rates

Insurers consider many factors to determine your auto insurance premium. These may include:

  • Where you live: Insurance may be more expensive in areas with a higher cost of living, as repairing your vehicle may cost more. Residents of urban areas also often pay higher fares due to a higher incidence of vandalism and accidents.
  • Your age and gender: Young drivers are more prone to accidents than more experienced drivers and therefore pay higher rates. Men also tend to be riskier drivers than women and often pay more for car insurance.
  • Your vehicle and how you use it: A more expensive car will cost more to insure. If you drive frequently, you may also pay more for your auto insurance than someone who rarely uses their vehicle.
  • Your driving record: Insurance companies take into account your driving history, including speeding tickets and other violations, as well as accidents. A clean record can mean a lower insurance rate.
  • Your credit score: Insurers also often use a credit-based insurance score to assess your risk. Your insurance score is based on things like your payment history and available credit usage. People with higher credit scores are generally considered to have a lower risk of filing a claim, which leads to lower premiums.
  • Your coverage levels: More coverage means a higher auto insurance premium.
  • Your deductible: A deductible is the amount you pay out of pocket for a claim before insurance steps in to cover the rest. If you choose a higher deductible, you will pay more when you report your claim, but your monthly premiums will generally be lower and vice versa.

Check: What happens if you have an accident without auto insurance?

How to get a low car insurance rate

These simple steps can help you find a low auto insurance rate while getting the coverage you need:

  • Compare the prices. Insurers can offer very different prices. Don’t just pick the first policy you find. Shop around, get an auto insurance quote from multiple insurers to find the best deal for your situation.
  • Choose a higher deductible. The higher your deductible, the lower your monthly premium tends to be. To save money on your insurance premium, choose a relatively high deductible, but make sure it stays within your budget if you need to file a claim.
  • Pay in advance. Some insurance companies may charge you a lower rate if you choose to pay the entire policy six or 12 months up front rather than paying monthly.
  • Bundle insurance policies. Bundling means buying multiple insurance policies from the same insurer, such as home insurance and auto insurance. Many insurers give you a discount on one or both policies if you bundle them. You can compare insurance package rates just as you would for an individual policy.
  • Take advantage of discounts. Some insurance companies may offer discounts if you take a defensive driving course, install anti-theft devices, or insure more than one vehicle. You may also be eligible for a group rate through your alumni association or a non-profit organization to which you belong.
  • Improve your credit score. Auto insurance providers may base your rate in part on your credit history. With good credit, you may find that you get lower car insurance rates. The best way to improve your credit score is to focus on making all your payments on time, every time.
  • Drive carefully. 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 over a certain period of time.
Good to know: The national average auto insurance premium was $1,070.47 in 2019, according to the latest data from the National Association of Insurance Commissioners. State averages vary widely.

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 necessarily. You can probably buy a minimum auto insurance policy that meets your state’s legal requirements for much less than a comprehensive auto policy that will better suit your needs. But if you do have an accident, you’ll want to make sure your finances are protected.

That’s why in many cases it’s better to pay a little extra to get better coverage. Start by determining the level of coverage you feel comfortable with, then compare the prices of policies that meet those requirements.

Learn more: Complete car insurance: what it covers

What information do I need to get a car insurance quote?

Although every insurance company is slightly different, you will likely 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 information.
  • Details about your vehicle: This may include year, make and model. You may also need to provide the number of miles on the vehicle, if it is financed and for how much, and your Vehicle Identification Number (VIN).
  • Safety devices: Some insurance companies may ask you, for example, if your car is equipped with an anti-theft device, anti-lock brakes or passive restraint systems.
  • Information about your way of driving: Your auto insurance agent may ask you how many miles you usually drive per day or per week and where your car is parked day and night.
  • Details about your household: You will likely need to let your insurance company know the ages of other members of your household, especially other drivers in your family.
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Disclaimer: All insurance related services are provided by Young Alfred.

About the Author

Andrew Dunn

Andrew Dunn is an award-winning mortgage and finance writer with a decade of industry experience with articles published on Fox Business, LendingTree, Credit Karma, Axios Charlotte, and more.

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