but you shouldn’t have to break the bank to get reliable coverage. There are plenty of auto insurance companies out there – you just need to take the time to shop for the coverage that’s right for you, compare quotes, and take advantage of any discounts that may be available.
Here are seven ways to help find affordable auto insurance that meets your needs.
- Use an auto insurance comparison website to compare quotes
- Understand the factors that affect your insurance premium
- consider your liability coverage limits
- Consider raising your deductible
- if you have an older vehicle, consider waiving comprehensive and collision coverage
- claim your car insurance discounts
- consider third-party ratings
1. use an auto insurance comparison website to compare quotes
You’ll have to shop around if you’re looking for competitive insurance rates. Consider getting auto insurance quotes not only from national auto insurance companies like Geico and Allstate, but also from smaller insurers, because you never know where the best deals are hiding.
One of the easiest ways to shop for insurance coverage is to compare auto insurers online. If you prefer to review insurance options with someone, working with an auto insurance agent is another way to go.
2. understand the factors that affect your insurance premium
It’s not just your driving record that determines the insurance quotes you get. Insurers base the cost of insurance (their premiums) on the risk they assume by insuring it. use claim data and personal information, among other factors, to assess this risk.
In some states, your credit may have some influence on your premium (although California, Massachusetts and Hawaii have banned the practice of using credit-based insurance scores to help determine rates). And while somewhat controversial, the use of credit-based insurance scores to influence premium cost is still a reality, with studies and surveys suggesting that people with less-than-ideal credit are more likely filing insurance claims and vice versa.
Whether you agree with the practice or not, you should be aware that, in certain states, drivers with better credit may get better rates than those with less than good credit. For example, a 2015 Consumer Reports survey shows that single respondents with “good” credit paid up to $526 more per year (depending on their state) than similar drivers with the best credit scores.
In addition to credit, your insurance rates may also be affected by the following factors:
- Your Zip Code: Certain areas have higher than normal rates of accidents and vehicle theft. auto insurance companies may consider this when setting rates.
- Year, Make and Model of your car: The more expensive your car is, the higher your insurance rates may be. Insurers can also see if drivers with the same make and model tend to file more claims or have more accidents, as well as safety test results, cost of repairs, and theft rate.
- The number of miles you drive each month: Putting fewer miles on your car each month can affect the rates you get.
- Your Driving Record: Drivers with a clean record generally qualify for lower rates and may be eligible for a safe driver/good driver discount.
- Your age and marital status: The data shows that the probability of an accident may be related to these factors.
- military personnel
- full-time students with a good academic record
- good drivers (no accidents for a certain number of years)
- drivers who have taken a defensive driving or driver’s education course
- drivers whose insured vehicles have air bags, anti-lock brakes, anti-theft systems, or daytime running lights
- active or retired federal employees
- drivers who have more than one vehicle insured with the same carrier
- drivers who also have homeowners or renters insurance with their auto insurance company
- drivers who pay their annual premium in one lump sum and/or choose automatic payments
3. consider your liability coverage limits
Liability insurance generally consists of three types of coverage: bodily injury liability coverage, property damage liability insurance, and uninsured motorist coverage.
Each state that requires liability insurance has its own minimum coverage requirement, but you can choose more coverage, at a cost. Generally, the higher your coverage limit, the higher your auto insurance rate.
But before you settle for your state’s minimum coverage requirement, consider any assets, like your home, savings, or investments. everyone could be at risk if you cause an accident that results in medical costs or property damage that exceeds your coverage limit. you may want to choose coverage limits that, at a minimum, reflect the value of your combined assets.
4. consider increasing your deductible
The deductible is the amount you’ll pay out of pocket toward the cost of an auto insurance claim. you may be able to lower your monthly premium simply by increasing your deductible.
Still, you’ll want to think about your overall financial situation when deciding on a deductible. if it’s too high, it could cause financial hardship down the road if you ever need to file a claim.
5. if you have an older vehicle, consider waiving comprehensive and collision coverage
Collision coverage can protect you if you’re in a single-car accident or if you’re hit by another car or object. Comprehensive coverage can protect you if your car is stolen or damaged due to events other than collisions, such as theft, natural disaster, or contact with an animal. Together, these coverage options are designed to cover repairs or reimburse you for the value of your vehicle.
Comprehensive and collision coverage are optional unless you lease or finance your car, in which case your auto loan lender may require it.
If you have a low-value older car that’s paid off, you may be able to get less expensive comprehensive and collision coverage, or you can opt out of comprehensive and collision coverage altogether; what’s best for you depends on your specific situation.
To decide if this makes sense for you, take a look at what’s called the “book” value of your car and compare it to the comprehensive and collision deductible and annual cost of this coverage listed in your insurance quote . Kelley Blue Book and Edmunds.com offer tools you can use to estimate your car’s value.
6. claim your discounts on car insurance
clean driving record? distinguished student? Some insurers offer a variety of car insurance discounts based on group membership, car features such as anti-theft devices, driving history, policy ownership, and more. Here are some groups that may be eligible for a discount, depending on the insurance provider.
7. consider third-party ratings
It can be tempting to just pick the cheapest car insurance they offer. but before you do, research the insurance company. An affordable premium is certainly important when choosing an insurance provider, but it shouldn’t be the only consideration. An insurance company that provides fast and efficient service can make your life much simpler if you ever need to file a claim.
To get an idea of the type of service a carrier provides, take a look at third-party ratings. One company that provides these ratings is J.D. Energy. This company conducts an annual study that rates insurers based on various factors related to customer service. You can also check a carrier’s rating with the Better Business Bureau.
Price is certainly important when considering car insurance, but you also want to make sure you’ve chosen a reputable company and that the coverage you get meets your needs. Comparing prices is key to finding the best auto insurance for your needs.
credit karma provides an easy way to compare prices with various providers. take the time to review the details and compare them before deciding which auto insurance policy is right for you.