Tips on How to get Cheap Car Insurance
While I am not an insurance agent, over the years I have become the "go to person" to whom family and friends turn to when they need to buy cheap car insurance. Still remember the first time I had to buy my own car insurance. As a 20-year-old driver with one accident (already) and a low credit score trying to find cheap car insurance was nearly impossible.
Over 15 years have passed since those days. During this time I have shopped for countless insurance policies for family and friends. In this article, I wanted to share a few tips that I learned over the years. I hope that these tips will help you find a cheap car insurance plan. I will not tell you that X or Y company offers the cheapest car insurance. There are many factors that are taken into account when a car insurance quote is calculated. For example, your age, accidents, the car you are trying to insure, driving record, and even your credit score are some of the factors. But regardless of these factors, there are a few tips that can help you get the cheapest car insurance no matter what company you choose to work with. Some of these are not exactly secret and you probably know a few. But you will find tips that you might be helpful.Back to top
1. Tips to help you get cheap car insurance
If you have ever bought car insurance, then you know that it can take quite a dip into your pocket. This doesn’t have to be the case, though. In this article, you will find many tips, resources, and hacks that I have learned over the years which should help you get cheap car insurance.
1. Explore all options
One thing you should never do is jump onto the first company that crosses your path. Always exhaust all possible options before deciding on which insurance to settle for. It is always a good idea to get a few insurance quotes from multiple companies for thorough comparisons. To properly compare insurance companies (compare apples to apples as they say) always get quotes for the same coverage limits and deductibles.
2. Ask your friends
Another way to find cheap car insurance is to ask your friends and family about the insurance companies they work with. In many states, there are local insurance companies you may have never heard about. These local car insurance companies often offer dirt cheap insurance rates to compete with the larger companies such as Geico or All State. If your friends have a good experience with a local insurance company, that could be the best option to start with.
3. Good driver discount
Find insurance companies with incentives for good drivers. Assuming you have a good driving record. Insurance companies hate risk and if you can show them that you have little room for accidents, some will offer you a discount. As a driver, your risk level is directly tied to how safe your driving habits are. Why not find companies that will reward your clean driving record if you have one.
4. Bundle policies together
If you have other insurance needs besides your car such as home insurance, it might be a good idea to get them as a bundle. Most companies have ‘multi-line coverage’ and this is usually offered at a discount. For example, you can get a percentage off just by bundling your homeowner insurance together with your car insurance.
5. Keep your credit score high
In the past, your credit score didn't matter when buying car insurance. Now, your credit score will impact not just the home loan but also the cost of your car insurance. Generally speaking, the higher your score, the lower your auto insurance premium will be. Some companies calculate their own score which takes into account several factors including credit score and driving record.
6. Set a balanced deductible
Your insurance deductible is the amount you are willing to pay for damages before your insurance company can come in. Similar to the deductible in your health plan. The catch is that the higher your deductible, the lower your premium. For example, I was experimenting with my car insurance policy online by raising the comprehensive collision cover deductible to $1000, we could shave as much as 10 percent in car insurance.
It is like your premium and your deductible are in a game of seesaw. Just be careful not to set a deductible that is too high if you have no savings because you will have to pay the deductible out of pocket first. You won't see any significant savings if the deductible is over $1,000. Typical deductible most people use is $500, but you can have as low as $250. You can even have a zero deductible but your monthly insurance cost will go up significantly.
7. Lower your coverage
You can reduce your insurance costs by lowering your coverage but you should understand that this is a risky trade off. You may not be protected adequately if you get into an accident. Make sure to meet your states minimum insurance coverage requirements.
8. Discounted insurance if you drive less
If you don't use your car often or your commute is short, you have a much lower risk for accidents. Insurance companies love that and some might be willing to reduce your premium. Have you moved to an area that is really close to your workplace? Do you take public transportation to work and only use your car for pleasure? Let your insurance company know about these details and ask if they can lower your insurance. You have a good chance to have your premium lowered. The average mileage per year for most people ranges from 12,000 to 15,000 miles per year. If you know you aren't going to put too many miles on the car, point it out to when you are getting car insurance quotes. If you are getting quotes over the phone tell the agent. If you are getting quotes online, you will typically get asked to enter how many miles do you drive in a year.
9. Different cars have different premiums
Take a look at some statistics to see which cars are involved in the most accidents. It is possible to get a much lower premium if you buy a car that is deemed safe on the roads. Sports cars have higher premiums for example. Cars have different repair costs and companies take this into consideration. A high maintenance SUV will attract a hefty premium.
10. Evaluate your coverage from time to time
Even if you start with what you think is a great deal on your car insurance, it is prudent to evaluate the coverage from time to time. Over time, a lot of factors change, and it is possible that more options for cheaper premiums might have opened up.
11. Good student discount
If you are in high school, college, or university, here is another reason to lower your car insurance policy. Students with at least 3.0 grade point average can be considered for lower car insurance premiums. The reduction is typically given to those 25 years old and under.
12. Where you live matters
What city you live in has a direct impact on your insurance quote. For those who are lucky to have more than home, use the house that is located in a low population area when you fill the registration form. Also if you recently moved you may be able to save on car insurance. Typically if you reside in a large city the rates will be higher than if you live in a suburb. Some car insurance companies will automatically adjust the rate once you update the address in their system. If your company doesn't do that, call up your agent and ask for a quote re-evaluation. If you moved from New York City to a suburb of New Jersey you can get a significant reduction on your monthly premium.Back to top
Remeber to always get quotes from at least three companies or more. It only takes a few minutes to get an insurance quote. There are tools online that will compare multiple insurance quotes from different companies. Try them if you are looking to save time and money.
Why is hard to find out which company offers the cheapest car insurance? That’s because premiums are complex to calculate and a lot of factors are put into consideration. For example, your driving record, the car type, and your credit score will all be factored into the calculation of your premium. All insurance companies use their own criteria and equations to calculate your rate. That's why it is important to get a number of quotes before settling for the cheapest insurance company.Back to top
3. Frequently Asked Questions
What are Car Insurance Coverage Types?
There are all sorts of car insurance coverages and it would be time consuming to cover them all. But, before you pick an insurance company, it is important to know the few basic types of coverage you have available.
Bodily Injury Liability
Pays if you are responsible for another person's injury or death in a car accident. It will also pay for your legal expenses and attorney fees. The minimum coverage starts at $30,000 in most states. It can vary by state.
Liability coverage or property damage liability is meant to cover the damages that arise as a result of an accident you cause. Pays if you are responsible for damage to another person's car or property. All property damage and even bodily harm inflicted upon a third party will be paid for by your insurer. You, however, will not be covered. Although the premium will be lower, this can be a risky option if you do not have any savings to pay for your own car repairs. Liability coverage is required in all states. The limits vary by state in most cases it is as low as 15,000.
Let's clarify what happens if you get into an accident and it is NOT your fault.
If you have liability coverage only and you get involved in an accident but it is the fault of the other driver, the other driver's insurance will pay to repair damages to your car. This will only happen once the other driver's insurance company accepts liability (meaning accepts that their driver was at fault). If you got into an accident but weren't at fault, make sure to hire a lawyer. Lawyers don't charge any money to you directly. They take a percentage of the settlement if you win the case.
Collision Coverage or also known as Full Coverage is designed to pay you for damage that results from collisions with other cars or stationary objects such as walls, poles, or trees even when it is your fault. In such incidents, your insurance company will pay for any necessary repairs or full replacements depending on the market value of your car minus the deductible. While you will be thoroughly covered, your premium will also sky rocket. Collision coverage is not required by the states. If you get a loan to buy your car, collision coverage is required by the bank that loaned you the money.
Personal Injury Protection
Covers you or the family, and your passengers if they are injured in an accident. It will cover the cost of medical expenses not covered by your health insurance plan. It can also pay for lost income and even funeral expense. In a few states, Personal Injury Protection coverage can be waived by signing a form. Typical coverage starts at $2500.
This also includes fire, damage due to flooding, and even theft. It is up to you to find the right balance and decide if you need comprehensive insurance.
What is the average car insurance price, monthly cost?
It is difficult to come up with the exact car insurance cost per month. The average car insurance prices vary by location, your age, driving records, insurance policy coverage etc. For full coverage typical car insurance quotes that we see range from $50-$240 per month. For liability insurance average car insurance prices can vary from $20-$130.
Below you will find a list of car insurance companies. If you looking for cheap car insurance, get quotes from as many companies as possible.
- State Farm
- Auto Owner
- Allstate Insurance
- Erie Insurance
- Nationwide Insurance
- Liberty Mutual Insurance
- Farmers Insurance
- Safeco Insurance
- Amica Mutual Insurance Company
- Elephant Auto Insurance
- The Hartford