Shopping for Car Insurance: Understanding Insurance Rates and Terms can Save You Money
Shopping for insurance and comparing insurance rates and terms can help you save money. A comprehensive search, including both national and local insurance companies, may yield considerable savings.
An opportunity for you to save
It is difficult to estimate the exact amount that consumers overpay on car insurance each year, as this can vary greatly depending on several factors such as the individual's driving history, the type of car they own, and the coverage level they choose. However, studies have shown that many consumers are often stuck paying more for car insurance than they need to due to a lack of understanding about insurance options, as well as insurance companies offering coverage that is not well-suited to their individual needs.
Don't miss the opportunity to get a better car insurance quote that may be presented by shopping around. Although a third of drivers are unhappy with their policies, they still renew without considering other options. Car insurance companies are aware of this and often raise rates during policy renewal, which usually takes place every six months or yearly. To avoid this, start shopping for a better quote ahead of your policy renewal or when buying car insurance for the first time.
Shopping for Car Insurance
Shopping for auto insurance and comparing insurance rates can help you save money. Don't miss the opportunity to get a better car insurance quote by shopping around. Although a third of drivers are unhappy with the policies they have in place, they still renew without considering other options. Car insurance companies are aware of this and often raise rates during policy renewal periods, which usually takes place every six months or yearly. To avoid this unexpected hit to you budget, it’s a good idea to start shopping for a better prices and coverages ahead of your policy renewal date or when buying car insurance for the first time. Here's what you need to do:
Determine the minimum coverage required in your state
Before purchasing car insurance, it's important to understand the minimum coverage requirements in your state. Liability insurance is a legal requirement and covers damages you may cause to another vehicle, driver, or passengers in the event of an accident. If you finance or lease your car, comprehensive and collision coverage may also be required by your lender. Liability insurance includes coverage for bodily injury, property damage, uninsured motorist, and underinsured motorist, but minimums can vary by state.
Despite a third of drivers being dissatisfied with their car insurance, most still renew their policies without exploring alternative options. This is why insurance companies are known to raise rates at renewal, which typically occurs every six months or annually. To avoid higher rates, consider shopping around for a better quote before your auto insurance renewal or when purchasing insurance for the first time.
Use an online insurance marketplace or comparison tool
You can use an online insurance comparison tool like gabi.com to help comparison shop. You'll need your vehicle's VIN number, the year, make, and model of your car. This will include your daily commute (in miles), your zip code, where the car is stored (in a garage or on the street), and the number of accidents you've had in recent years. You'll also need to put in your age and gender, since some states consider these factors.
Obviously, you'll want to find a plan that fits your budget — so premium payment is likely the first thing you'll consider. But you'll also want to take into account the deductible, i.e. the price you'll pay if you file a claim, along with coverage areas. Some plans cover damage from uninsured motorists, and others don't.
You'll want to find a plan that covers all of your state's minimum coverage requirements, plus any requirements that are important to you. Remember if you're financing or leasing, you will likely need comprehensive and collision coverage in addition to the state minimum liability coverage.
Though a lower premium is nice, you often get what you pay for. After you get quotes from each of the companies you speak to, ask them to send your quotes to you via email. If possible, print out every quote and compare the coverage line-by-line. This will give you a true idea of what the costs will be in the event of an accident.
Always furnish accurate information
"Fudging" information to lower insurance premiums may seem tempting, but it is not recommended. Approximately 10% of drivers have been known to engage in such practices, such as understating mileage or providing false information about their location or usage of the car.
However, if you file a claim and your insurer discovers the falsehoods, your policy could become null and void, leaving you responsible for the entire cost of damages. To avoid this outcome, it is best to be honest and truthful when purchasing insurance.
Request the discounts you have coming to you
To obtain affordable car insurance, consider asking for discounts. Many insurance companies display the discounts they offer on their websites, but some may not be listed. Popular discounts include:
Multi-car discounts
Cost savings from combining your car insurance with other policies, such as homeowner's or renter's insurance.
Special bundle prices for joining your auto insurance policy with other policies, like homeowner's or renter's insurance
Offers for members of specific professional organizations (such as naming your membership)
Anti-theft installed systems
Good driving record discounts
Special quotes for paying your six-month or annual premium in one payment
Anti-theft installed systems
Good driving record discounts
On-time payment discounts that could save you in the long run
Keep in mind that a comprehensive search, including both national and local insurance companies, can lead to considerable savings. While your savings may vary depending on various factors, such as your location, the type of vehicle, driving history, and the specific insurance company and coverage selected, on average, shopping for car insurance can save consumers up to 47% in premium costs, or more than $845 each year.
