With insurance costs rising almost everywhere, more drivers than ever are looking for affordable car insurance. Premiums vary by company, but most insurance companies take personal factors into consideration when setting their rates. Bankrate’s insurance editorial team explains these factors and offers strategies to improve the factors you can control to help you get the right insurance policy at a price that won’t break the bank.
How to choose cheap and correct car insurance
If you’re looking for the cheapest car insurance, price may be your top priority. However, to know how to choose the right car insurance company, you need to consider more than just the premium. The tips below will help you find affordable auto insurance that meets your coverage needs.
1. Consider your vehicle and driving record
Car insurance premiums are based on a variety of factors, including your car’s age, make, model, mileage, and safety features. Because older cars usually have lower value, they often cost less to insure than new cars that have more expensive parts and repairs. Additionally, if your car’s value is close to what you’d pay for full coverage auto insurance for several years, you may be able to skip full coverage. Talking to your insurance agent may help you determine which coverage options are right for you and your vehicle.
Additionally, your driving history (at-fault accidents and moving violations) has a big impact on your auto insurance premium. Safe drivers generally pay the lowest car insurance premiums. If you have serious violations on your driving record that require you to obtain an SR-22 certificate, you may be required to purchase high-risk auto insurance, which typically requires significantly higher premiums.
2. Consider your personal factors
Besides your driving history, other personal factors also affect your car insurance premiums. These vary depending on where you live, state, age, gender, and credit history.
Car insurance quotes can vary significantly depending on your driver profile, so it may be worth comparing quotes from several insurance companies to see who can offer you the best rates. yeah. Each insurance company calculates rates differently and takes into account driver and vehicle characteristics according to its own formula. For example, one airline may charge steep fees for speeding ticket convictions, while another may weigh your age and credit history more heavily when calculating fees.
3. Compare quotes based on coverage options
Comparing car insurance quotes may be one of the most helpful things you can do when shopping. In addition to your driver profile, your chosen coverage limits, coverage, and deductibles will also determine your price. Requesting quotes for the same coverage type and policy limits may provide the most accurate comparison between carriers. It may also be worth consulting an independent insurance agent who can collect multiple quotes and provide personalized customer service with your interests and budget in mind.
The amount of auto insurance coverage you need has a direct impact on your insurance premium. Generally, the higher the coverage limit, the higher the premium. However, higher coverage limits also provide more financial protection if you need to make a claim. On the other hand, if you choose a high deductible, you may be able to secure a lower rate, but you will have to pay more out-of-pocket if you make a claim.
If you lease or loan a car, you’ll typically need to purchase full coverage insurance, which includes collision coverage, comprehensive coverage, and liability. If you own a car, you also have the option of purchasing a cheaper minimum coverage policy that only includes your state’s minimum coverage requirements, but it won’t provide as much financial protection.
Adding insurance endorsements may allow you to customize your policy to suit your unique needs, but add-ons typically come at an additional cost. Insurance riders vary by company, but common options include:
- gap insurance: This covers the “gap” between the equity you have in your car loan or lease and its value if the car is totaled or stolen and cannot be recovered.
- Custom equipment coverage: If you have added custom equipment to your vehicle, such as lights, spoilers, wheels, etc., this warranty provides coverage for those additions.
- New car replacement compensation: If you own a fairly new vehicle and it is deemed a total loss after a qualifying event, this coverage allows you to replace it with a new model of the same vehicle.
- Scope of ride sharing: If you drive with a rideshare service, this coverage provides additional financial protection when transporting passengers for commercial purposes.
Insights on bank rates: Don’t ignore your local and regional insurance companies
When looking for cheap car insurance, finding a local or regional insurance company can be very helpful. These companies are often, but not always, more responsive to local coverage needs and sometimes have special benefits, discounts, and other features that are difficult to find with larger insurance companies. Working with an independent agent or broker can be helpful when looking for a local insurance company that will meet your specific needs while offering competitively low rates.
4. Understand which discounts apply
When choosing car insurance on a limited budget, it’s a good idea to pay attention to the discounts offered by each company. Many car insurance companies offer discounts to help drivers get better rates, but the discounts available vary by insurance company. Commonly available car insurance discounts are:
- Multi-policy: Generally, if you purchase two or more policies from the same company as a home and auto insurance package, you may find lower premiums with some airlines.
- Multiple vehicles: Many insurance companies will lower your premiums if you insure more than one vehicle with your auto insurance policy.
- Claim free: Drivers who have no record of claims in the past few years may be eligible for a no-claims discount.
- Fully paid: If you can afford to pay your annual or six-month premium in full upfront, you may be able to save money on certain carriers.
- Excellent students: Drivers who achieved good grades in high school or college may be eligible for discounts on student auto insurance.
- Telematics: Many carriers offer telematics programs that monitor driving habits to monitor both safe and unsafe behavior behind the wheel. Safe drivers often save money on their insurance premiums, but some companies may increase your premiums if the program uncovers dangerous habits.
- Affiliation: Some insurance companies offer affiliate discounts for students and professionals. Examples of potential affiliations include professional organizations, alumni groups, corporations, and military service.
If you qualify for more than one discount, most insurance companies will allow you to combine those discounts, so you can maximize your savings if you qualify for more than one discount. You can inquire about available discounts so you know what benefits you can receive when choosing a company. Discounts can reduce the cost of your auto insurance, allowing you to get the coverage you need without compromising your coverage.
5. Research trusted third-party reviews
Once you’ve found a carrier that offers the coverage you’re looking for at a price you can afford, it’s a good idea to check third-party reviews of the providers you’re considering. Some of the most well-known and trusted organizations include JD Power, AM Best, and Standard & Poor’s (S&P). By considering third-party ratings, you may be able to better understand each company’s overall customer satisfaction and financial stability. These metrics may also provide insight into the digital tools each carrier offers.
