One thing the internet does very well as to allow consumers to compare offers easier and save money by finding better deals. As this was covered in health insurance comparison and life insurance comparison, the same principles apply with direct car insurance. By learning a few basics, it is also possible to uncover great savings in the cost of insuring a car.
Factors that affect car insurance rates
The first step in making sure you get the lowest possible car insurance rates is to know all the major factors that can affect them. These include:
- Age, experience and gender: Males, less-experienced drivers and younger drivers pay more
- Location: Rates can vary greatly between states and rural and urban areas.
- Driving violations and previous accidents: Keep in mind the huge impact tickets and accidents can have on rates when driving.
- Vehicle type: A more expensive car will cost more to insure.
- Education: Higher education levels can lower rates.
- Occupation and commuting distance: Those who drive farther to work and more at work will likely pay higher rates.
- Credit ratings: Insurance companies often regard those with bad or no credit higher risks.
How much car insurance do you need?
While it is not always possible to control the above factors, there are two things that every driver can directly decide that will greatly affect rates: deductibles and the level of insurance.
As a general rule, it is best to go with the highest deductible you can afford. Going with higher deductibles eliminates the need to report small incidents to insurance companies, and the savings from lower premiums, once they are added up, will often more than cover the cost of the deductible if you do have an accident that requires insurance help.
The level of insurance to go with needs careful consideration. Remember that the minimums required by law in most states are not always a good level to go with. Those with assets to protect need to keep in mind they could lose their home and other possessions in a lawsuit if they do not have enough insurance. The major types of auto insurance to be familiar with are:
- Liability: Experts often recommend coverage of $100,000 for one person injured and $300,000 for all people injury, in addition to another $25,000 for property damage liability. What assets you have to protect will also weigh in when deciding the amount.
- Collision and comprehensive: Since these cover the cost of your car in an accident, the amount needed will vary with its value. When the value of the premium and deductible come close to the value of the car (which can happen for an old car), it may be best to do without this coverage.
- Uninsured or underinsured motorist: Your medical coverage will be a factor in deciding if you get this coverage since it pays your medical bills if you are injured by a driver who is uninsured or underinsured. However, since it also can pay for lost wages as well as pain and suffering, your medical bills are not the only reason to consider this protection.
- Personal injury protection (PIP): Is sometimes required by law and pays the medical costs of you and your passengers regardless of who is at fault.
Selecting a company
While premiums and coverage are obvious factors, there are a number of things to consider when choosing an insurance company.
- In addition to taking the time to understand the plans, be sure the coverage is adequate and complies with state law.
- Look at the total price since sometimes the extras can make a seemingly cheap plan more expensive overall.
- Be sure of the payment methods of the premiums and how often payments are made.
- Know the cancellation policy.
- Familiarize yourself with the flexibility of the plan and what it takes to change the type of coverage if desired.
- Always ask about possible discounts.
- Understand all the terms and the claims procedure.
Tools for finding the best company
Online tools make it easy to check with many different companies to get the best rates. Before getting started, on top of having at least a rough idea of the extent of coverage you will be going with, be sure to have the information on hand (profile, SSN, drive history, vehicle age, etc.) to provide accurate details when filling in the quote request forms. Some of the top sites to utilize include: https://www.netquote.com/nq/rm-general.aspx, https://www.insure.com/ and https://www.insurance.com/
To reduce the chance of having problems with an claim, check up on the insurance company before committing to any agreement. The NAIC offers lots of information on insurance companies to include complaints and financial information.
At the time of this writing, some of the top rated major insurance companies (not necessarily the cheapest) on factors including complaints and market share are: Amica, USAA and State Farm.
It is also a good idea to check up on your state’s insurance department website. You may get information on companies, laws as well as hypothetical rates of roughly what a driver in your circumstances will typically pay. To find your state’s website, go to: https://www.naic.org/state_web_map.htm
Direct car insurance can save you a tidy sum of money over time. Choose your company carefully and check periodically to make sure you are getting the best possible rates.