Car Insurance Quotes: Don’t Get Taken for a Ride

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Car Insurance Quotes

Part 1: Know the Landscape

According to motor vehicle registration statistics, there are around 281.3 million vehicles on US roads. And in nearly every state, you must have some liability insurance that protects other drivers on the road. Although this law projects citizens and their property, it’s not like car insurance companies are just giving away affordable insurance coverage with enticing car insurance quotes. In fact, automotive insurance continues to rise each year, and 2019 is no exception. 

There are several reasons car insurance prices have risen in recent years:

  • A record number of natural disasters resulting in an increased number of claims
  • An increase in the number of distracted-driving incidents
  • Cars equipped with the latest tech are expensive to repair

It’s difficult to predict if the current rates will remain this high. However, right now, the best thing to do is to find the most affordable car insurance quotes for both comprehensive and collision insurance.  

Pro Tip: Best Cards for Bad Credit

It Pays to Shop for Car Insurance

Do you stick with the same car insurance provider year after year just for the sake of convenience? Has your loyalty been rewarded with decreased premiums? If not, it’s a great time to change to an affordable car insurance plan. 

Insurance prices vary dramatically across the industry, so a little comparison of coverage plans today, can save you a lot of money tomorrow. The latest advice from industry experts is to shop around every six months, rather than wait until your car insurance policy is about to expire.  And don’t worry – if an insurance company checks your credit history, it will not affect your credit score because it’s only a “soft pull” (i.e., appears on your credit report but doesn’t impact the score).

If you need more reasons than just saving hundreds of dollars, then consider these facts:

Car Insurance Quotes Vary

Different insurance agencies charge different rates. There are a surprising number of factors that affect the price of car insurance premiums. You might think the price depends on your driving habits, but there are statewide pricing formulas that are also factored in. These formulas typically include personal details, such as age, gender, zip code, education, homeownership, employment, and credit score. Every insurance provider has its own method of calculation, so it pays to compare car insurance quotes from several different companies. Request car insurance quotes from national, regional, and local insurers before making your choice.

Price is Optimized

Algorithms, for better or worse, are a fact of modern life, and the insurance companies use them when they can (the practice has been outlawed in some states). The automotive insurance industry uses algorithms to determine the likelihood of you changing insurance agencies if the price increases and how significant the increase can be. Don’t be just another statistic: do some research and save some money without fear of altering your coverage.

Loyalty Can Be Expensive  

It’s easy to stick with the same insurer and give little thought to finding a new one. In so many other instances, loyalty pays, often very handsomely. With car insurance, however, rewards or discounts for your loyalty are infrequent at best. Some companies may even hike up the price!

There are several urban myths surrounding car insurance, so read more about common auto insurance myths here.

Haggling is Free

In your quest to find affordable car insurance, it sometimes pays to test just how badly your current insurance provider wants to keep your business. Haggling over insurance rates is most likely not something you look forward to, but where’s the harm in asking if they’ll lower your car insurance policy price?

Change is the Only Constant

So many things change for us every year, and oftentimes we forget. Maybe you changed jobs, bought a house, got married, retired, or joined a carpool. Any of these changes alone affect your collision coverage needs because your risk profile looks different. Lower risk typically means lower car insurance premiums.

Now that you fully fueled with reasons for shopping for affordable car insurance let’s begin the journey!

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Part II: Start Your Engines

The best place to look for insurance quotes is online. There are plenty of comparison sites to choose from, but be selective and visit several different ones. There’s no single site that provides quotes for all car insurance agencies. In fact, some insurers may not appear on a site because they only offer their products directly to the customer. To find these, you’ll have to do some additional research.

Whether you visit a comparison site or visit a specific insurer’s website, you’ll need to provide certain information. Make sure you have the following information handy:

  • Driver’s license and personal information for all drivers included on the car insurance policy – this includes full names, date of birth, address, occupations, and marital status.
  • VIN (Vehicle Identification Number) – if it’s impossible to provide this information, you’ll need the exact year, make, and model of the car.
  • Mileage
  • Purchase date – this can be an anticipated date if you haven’t yet purchased the car.
  • Driving history – this includes yourself and any other drivers you want to add to the car insurance policy. Make sure you provide all accidents, citations, claims, and completed driving courses.
  • Record of insurance – some, but not all, insurers require at least six months of car insurance coverage before they’ll issue a car insurance policy. You need to provide details of previous auto insurance coverage. 

A word of caution: Be wary of any insurance company that wants to charge you for a quote. There are plenty of other companies that offer free car insurance quotes, such as Dairyland Insurance.

Car Insurance Quotes

Factors to Consider About Car Insurance Quotes

When looking for insurance quotes, it helps to know how insurance companies arrive at them. Auto insurance prices are based on the risk a particular driver poses. The level of risk determines the premium. Depending on how well you’ve driven in the past, the insurance provider also takes into account other factors, such as location and demographics. Each of these factors is weighted differently to calculate premium costs, and each insurer weighs them differently.

It’s worth repeating – A change in any of the following may increase or decrease the cost of your auto insurance: 

Zip Code

The first question companies will ask you is if your zip code has changed. If you live and drive in a metro area, the insurance rates are likely to be higher because there is more congestion, accidents, and insurance claims. Car insurance companies also use your zip code to determine the rate of stolen cars in the area, acts of vandalism, number of claims (both real and fraudulent), and prevailing weather conditions.  

Age

Younger drivers present a higher risk than older drivers; therefore, rates for young adults are higher. Once you turn 25, however, you should expect the price to drop considerably. Sometimes by as much as 20%. Drivers between the ages of 30 and 69 can expect rates to stay the same, not taking into account other factors, such as driving records. Past the age of 69, you can expect insurance rates to creep up once again. Senior drivers are considered high risk because they have more accidents. According to the US Centers for Disease Control, the risk of being injured or killed increases as you get older.

Gender

The rates for men tend to be higher than women. Statistics show that men are more likely to crash, drive more, and engage in riskier behavior.

Marital Status

If you’re married, you’re considered a lower risk versus someone who is single. Fair or not, rates can be as much as 15% lower if you’re married.

Driving History

An inexperienced driver presents a higher risk of collision.  So, whether your 16 or 60, no driving experience automatically means higher premiums. The good news is that if your driving record is clean, you’re going to get a much better rate. You can even earn “good/safe” driver discounts. If you have a poor record, be prepared to pay. Even a minor traffic violation, such as a speeding ticket, will affect your car insurance premiums by as much as 40%. If the violation is major, such as a DUI conviction, then expect your rates to increase at least 100% or even higher.

Vehicle Type

The type of vehicle you drive affects the cost of your insurance, since driving a luxury sports car presents higher repair costs than a standard vehicle. When determining the risk, insurers examine car accident and claims data for different cars. Other factors they consider include vehicle cost, rate of theft, repair costs, and accident percentages.

Insurance History

The number and type of claims you’ve also made factor into an insurer’s coverage plan. If the claims are a result of your error, then you can expect an increase. Conversely, if they are a result of someone else’s, then there may not be a surcharge. It all depends on the individual insurer. Another factor is whether or not your car insurance has been continuous. If it has, it will help you get a better rate. If there is a lapse in coverage, you may pay more for your auto insurance. 

Credit History

Believe it or not, your credit history can affect the price of your car insurance. If your credit history is poor, you could find yourself paying twice as much as someone with an excellent credit history. It might seem a little unfair, but insurers view it as a risk. A driver with a poor credit history is more likely to make a claim. On top of that, a driver with a poor credit history tends to file higher claims. Both of these factors lead to higher rates.

Part III: The Exit Ramp

Comparing car insurance quotes is a joyride once you know what to look for. You will most likely receive many quotes in different ways, so it’s your job to make sense of them. To help you, here are some useful tips.

Get Several Matching Car Insurance Quotes

If you want to find the best price possible, you need to request quotes from several different insurance companies. Make sure the details you provide are consistent.

Car Insurance

Look for Companies With a Good Reputation

Finding an insurance provider with the lowest price is only part of the equation. A company offering the lowest prices may have a bad reputation for not paying claims. The internet is an excellent place for doing your research. Type in the name of a specific insurance provider together with “claims” or “complaints,” and you might be surprised by what you find. The Better Business Bureau is also a good resource if you want to know more about a company’s standing.

Let’s not forget word-of-mouth. There may be a friend, family member, or colleague who has filed a claim. Ask them about their experience.   

Additional Services or Exclusions

Most car insurance policies offer additional services. Some may be included in the basic car insurance policy, while others may require an additional charge. A basic car insurance policy includes bodily injury liability, personal injury protection, property damage liability coverage, collision, and comprehensive. One good example of an additional service is roadside assistance. If your car is brand new, this might not be important because your vehicle will still be under warranty. For owners of older cars, however, this is an excellent option to consider. 

Also, consider adding rental reimbursement. If your car needs repair, your policy will cover the cost of a rental car while your vehicle is in the repair shop.

Something else that’s worth considering is uninsured and underinsured motorist coverage, which is mandatory in some states. Uninsured and underinsured motorist coverage takes effect if you sustain personal injury from an uninsured driver. Medical expenses can be astronomical. Underinsured coverage also covers bodily injuries and financial losses.

A final extra worth adding is gap insurance, which covers the “gap” between the amount you owe on your car and its actual value. Check for exclusions and coverage limits.

The Initial Quote vs. the Final

When getting liability auto insurance quotes online, you typically get an introductory offer or an estimated car insurance price. What you pay, when you purchase the car insurance policy may change because the insurance provider you choose will ask for more detailed information. And as you now know, even the slightest change impacts your car insurance policy price. 

Part IV: You’ve Arrived Safely and Wealthier

Car insurance coverage is mandatory, so why not get the best deal possible?  You might think you’re saving money by sticking with the same insurer, but there’s so much more to gain by shopping around. You might be able to improve the coverage, and you’ll undoubtedly be able to get a better price. Make it a habit to shop around at least once a year just before your insurance is up for renewal. If you have any questions, never be afraid to contact the insurance provider and ask. They won’t drop you for understanding their product better.  

Have any helpful advice to share? If so, please share your comments below and help fellow drivers find their way.

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