With the hundred’s of insurers out there you can spend hours searching for the most cost effective auto insurance. The best way to start your search is getting a free quote online from an aggregator site that searches across several providers based on the search criteria you set.
Based on location, driving history and desired coverage there is no one best value auto insurance provider and you need to do your homework.
Further insurance premiums and criteria change regularly so always do a quick search when your insurance is up for renewal to see if you can save even more month.
As you search online however, be aware of the following costs associated with car insurance:
The Premium: The amount of money you pay the insurer for insurance coverage during the life of the policy. The insurance premium can vary widely among insurance providers, which is why experts strongly recommend getting several quotes before committing to a policy. In fact, even for the same provider you are likely to get quotes that change on a daily basis.
The Deductible: You generally choose your desired deductible when purchasing the insurance policy, and is the amount you have to contribute if you make an insurance claim. It can range from $0 to $1000 and generally the higher your deductible the lower your premium, and vice-versa.
No two auto insurance policies are the same, but most policies will include some variation of the following standard coverage:
Bodily Injury Liability covers you in the event that you cause an accident in which another person (or people) is injured.
Property Damage Liability provides coverage in case your car damages someone else’s property – usually this means someone else’s car, but it could be a fence, light post or other piece of property.
Medical Payments covers certain medical expenses if any vehicle occupants are injured in an accident.
Collision Coverage is an optional coverage that covers damage to your car caused by impact with another car or object.
Comprehensive Auto Insurance Coverage is also an optional coverage that covers damages to your car caused by something other than a collision – like theft, fire, etc
Companies hire actuaries to figure out what to charge people and the cost of your insurance premium is based on a number of factors.
Some of which (like where you live and how old you are) you have little control over but there are a number of other variables which you can control that have a big bearing on your cost of insurance.
Because there are so many factors that go into figuring out a person’s insurance premium, there is sufficient variety among insurance providers to make it worthwhile to shop around for the best deal and the best cover for you.
Here are some of the variable factor’s the insurance companies use when figuring your premium – most of which you have control over.
• Your driving record. The better your record, the lower your insurance. If you have a clean record for 5 or more years, you should be able to get the best rates in the market•
• Whether your car is insured for agreed value or market value. If you choose an agreed value which is less than the market value, you may get a significantly lower premium
• Type of car – age, make, model & body style. In general, a more expensive or faster car will cost more to insure, simply because owners of those vehicles tend to drive faster
• Previous claims (or no claim discount). Don’t try and hide these – all the companies have access to each other’s and local/state accident databases
• Where you live. Insurance companies base their analysis down to the street where you live. Also if you have moved recently, you may get a cheaper insurance premium, particularly if you have moved to a “safer” area
• Whether the car is parked on the street or in a garage. A garage is considered safer, so generally the insurance is lower
• Any modifications or accessories (e.g. spoilers or large speakers)
• Whether you own the car or have a loan. Some companies even look at your credit history and FICO score
• The number of additional drivers, and especially those under the age of 25.
How to Find the Best Insurance
I tend to start with online insurance portals because they search across a number of providers, but I have also found that if I go to specific insurance provider sites like GEICO or Allstate (see my comparison of these 2 providers) you can find certain exclusive deals not available elsewhere.
That’s why it’s a good idea to review your auto insurance cover when it comes time to renew. Normally I get a couple of competitor rates quotes when my policy is due for renewal and then call the representative of my current insurance provider to see if they can match the lower price.
Most of them have a +/- 10% discretion, so you can normally get a decent deal this way (and stay with your current provider), particularly if you have a good driving record. If they cannot match it, I go with the cheaper company.
No matter which insurance provider you go with, there are number of things you can do that will lower the cost of your car insurance. Use the list above as a guide when shopping around for auto insurance and to see where you can improve your “car profile” to the insurance providers.
I know that by simply stating in my online quote request form that I parked my car in a garage and had an alarm system (factory) installed, I got $200 dollars off my insurance over 6 months! Not bad for about 30 minutes of online work.