You’ve all seen the ads on television, the internet and radio declaring you can find the cheapest car insurance with the most bells and whistles by choosing one brand over another. So you pick one, and the insurance you receive is nothing to write home about. Then a year later you receive a letter in the mail declaring you could be saving even more money by switching your insurance again. How did you end up paying so much more than you could be with this other company? There are literally dozens of choices for car insurance in every state in the country, and it’s all too easy to end up with a poor fit for your needs. The key is understanding the factors that go into determining your insurance quote, and setting yourself up for the best possible rate. Here are the top five car insurance shopping tips to help you on your way.
The first step is understanding what the insurance you purchase is actually going to cover. Any insurance policy covers a specific vehicle, with either one driver or several. But what comes together to create the quote? Insurance policies incorporate property damage liability, medical payments, collision coverage, bodily injury liability, uninsured motorist protection and comprehensive physical damage to your vehicle. How much coverage you need in each area is up to you, so make sure you understand what you’re buying, and you can always get rid of some of these elements if they are optional in your state.
You also must understand how the car you drive affects your insurance rates. When setting a premium, the company looks at the sticker price of your car. If you do get into an accident, the insurer wants to know how much they will be on the hook for. And if you drive a vehicle that is more frequently stolen or involved in accidents, the insurance company will tack on a surcharge. You can arm yourself by contacting the Highway Loss Data Institute, which keeps records on all of the variables, and use the information they give you to make an informed decision when purchasing your vehicle. All data aside, each insurance company sets rates based on their own history with certain vehicles. Shopping around will show you that no two companies look at your car the same way.
You also have to contend with how you affect those insurance rates. Most of this is out of your control, as your age and gender will certainly be considered. If you’re a single male under 25-years-old, you’ll end up paying the highest rates. There’s no good way around it. Some states have tried to stop companies from setting rates based on these characteristics, but that hasn’t made insurance any cheaper. The best thing you can do is take care of your driving record. If you have had issues in the past, go to driving school to get negative marks removed from your record. It’s the only thing you can control, so do your absolute best to keep your driving history pristine. Location is the other major factor. The denser the traffic in your area, the more expensive the insurance. The rates are often determined by zip code, so keep that in mind if you’re contemplating a move.
Next, make sure you know how much coverage you need before accepting any quote. It is possible to have too much insurance. Check with the state to find out how much liability and property damage coverage you must carry. Then adjust it based on the quality of your vehicle, and shop around until you find a price you are comfortable with.
Finally, consider all of the ways you can reduce the premium rate. You might qualify for certain discounts, such as if the car has safety features or an alarm system. You could choose to remove collision coverage if you drive an older vehicle, as you won’t get much for claims on cars that are seven years old or more. And keep a close eye on your credit rating. If you search a site such as autoinsurancect.org, you’ll find that insurance companies have started to take a look at credit ratings before determining insurance costs. Ask your insurance agent to go over all possible deductions and make sure you get all you are entitled to, and you’ll lock in the absolute best rate.