Get the Best Car Insurance Rates
Everyone knows you should carefully shop around when buying a car, but all too many drivers neglect to purchase insurance with the same level of care. Failing to thoroughly comparison-shop can leave you paying more than you need to for coverage, and far from getting the best car insurance coverage for your needs. Car Insurance Rates!
Below are tips to help you seek out the best insurance coverage at the lowest rate.
What Is Good Car Insurance?
Getting cheap car insurance does not necessarily mean you bought the right type or amount of coverage.
Having “good coverage” means you don’t find yourself paying significant amounts of money out of pocket after an accident.
When you have found the right insurance provider:
- You’ll feel assured that you’ll be able to handle the financial costs after an accident.
- You’ll feel comfortable knowing you’re not overpaying for your car insurance.
Comparison-shopping for car insurance can help you make sure you’ve picked the right insurance coverage.
Here’s a step-by-step guide to finding the lowest rates without getting ripped off:
- Start with the car.What you pay for comprehensive and collision coverage depends on the year, make and model of the car you drive. Generally speaking, the newer, more expensive the vehicle, the higher the premium. Rates for comprehensive and collision coverage don’t vary much, so if you can’t afford to pay a lot for insurance and you’re in the market for a car, buy one that’s inexpensive.
- Know your limits.Most states have set minimums for liability insurance coverage, both for bodily injury and property damage. Look up coverage minimumshere or on your state insurance commission’s Web site.The National Association of Insurance Commissioners lists insurance commissions in all 50 states and U.S. territories. If you’re taking out a loan to purchase a new or used car, the lender will likely require you to carry a certain level of comprehensive and collision coverage, according to the NAIC.
- Take the highest possible deductible.Want an easy way to lower your premium? Take a high deductible. By opting for an annual deductible of $1,000 instead of $250, you’ll pay less up front, but should you be responsible for an accident, you’ll foot more of the bill before insurance payments kick in.
- Check your credit score.Somestates allow insurers to take your credit history into account when compiling what’s called an insurance credit score, which they use to calculate your premium. Bad credit because of overdue bills or a personal bankruptcy means you could end up paying more for auto coverage. To improve your insurance credit score, pay your bills on time, monitor your credit report and do anything you can to fix problems that could be lowering your score.
- Narrow the field.Use the process of elimination to come up with three or four reputable insurance companies or agents to approach for quotes. Start at your state insurance commission’s Web site, which usually lists several dozen of the area’s top insurers. Choose the half dozen or so companies with the lowest prices for coverage that’s closest to what you need. Next, check the reputations of insurers by going to the NAIC’sConsumer Information Source Web site to find the “complaint ratios” for each. Complaint ratios show the number of complaints that consumers filed against a company in a given year and then compare this to the company’s share of all premiums for a specific type of auto policy during that period. The national median is 1.0, and highly rated companies can score well below that.
- Find an agent.If the insurance companies you’ve identified as possibilities sell directly to customers, you can plug information into a form on their Web sites, get a quote and have someone contact you. If the companies sell through an agent network, ask friends or family who they use, or go back to your state insurance commissioner’s Web site to look up agents in your area. Give anyone you contact specific details about the coverage you want and let them know you’re comparison shopping. “Say, ‘I’ve talked to this company and got a quote for $480. Can you beat it?'” says Hunter, with the Consumer Federation of America. “Then you’ve put them to the test.”
- Grab those discounts.Insurers offer a multitude of discounts, including lower rates for drivers with short commutes, retirees, students with good grades or vehicles with safety devices such as car alarms or motorized seatbelts. If you’re over 55, you could lower your premium by 10 percent by passing a defensive driving course, according to theInsurance Information Institute. When you’re talking to agents, don’t forget to inquire about the group discounts that some insurers offer to members of professional organizations or other groups. Companies including State Farm, Auto Club of Southern California and Progressive have begun offering pay-as-you drive discounts, with premiums tied to your annual mileage, with a cap at approximately 19,000 miles. In many of these programs, you report your mileage online or to your agent when your policy’s up for renewal.
- Consider opting out of some — but not all — coverage.If you drive an older car and own it outright, consider dropping comprehensive and collision coverage. If the vehicle is really old, you could be paying more in insurance than what it’s worth. But hold onto that liability insurance. It’s illegal in most states to drive without it, and insurers in some states charge significantly higher premiums if you let coverage lapse, even if you haven’t been driving.
- Investigate state-run low-cost insurance programs.If you live in California, Hawaii orNew Jersey, and if your household income is close to or less than the poverty level, you may qualify for state-run low-cost or no-cost insurance programs. Policies under the California Low Cost Automobile Insurance Program, for example, cost less than $400 a year and cover about 12,000 low-income drivers at any given time, according to Doug Heller, executive director of Consumer Watchdog, an advocacy group in Santa Monica, California. He expects more people to sign up as a new state law takes effect that lets agents sell the program online for the first time. “That’s important not just for people who can get online from their homes, but for agencies that provide resources for low-income families,” Heller says. Lawmakers in Nevada and Michigan recently proposed or approved pilots for similar programs.
- Assess insurance needs and premium costs annually.Life isn’t static, and your auto insurance premiums shouldn’t be either. Review your policy once a year, especially if you’ve moved or switched to a job that has you driving more or less. A review is also a good time to check on whether you’re eligible for additional discounts.