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How to Compare Car Insurance Rates

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The same car insurance coverage can vary widely in cost, depending on the insurance carrier you choose and other factors. That’s why it’s so important to compare car insurance rates before settling on an auto insurance policy.

In this article, we’ll go over how to compare car insurance rates and the key things to look for when making your decision.

Here’s what you need to know about comparing car insurance rates:

How to compare car insurance rates

Comparing car insurance rates can help you get the best deal on the coverage you need. To compare car insurance rates in the most efficient manner, follow these steps:

  1. Determine how much insurance you need. Most states have legal requirements for minimum levels of auto insurance coverage you must carry. However, you’ll typically want more than that. Consider buying a higher level of liability coverage to protect yourself financially if you’re in an accident. You should also strongly consider collision and comprehensive car insurance. While these aren’t legally required by your state, they help pay to repair or replace your car if it gets damaged. If you’ve financed your vehicle, your lender may require you to carry these two types of policies.
  2. Get quotes from several different insurers. Once you know the coverage you need, you can get quotes from insurance carriers that offer it. This is generally an easy and straightforward process. You can either call the insurance provider or go to its website and fill out a form with some personal information and details on your vehicle. You’ll typically receive a quote within minutes.
  3. Make sure you’re comparing similar policies. Before you start looking at the prices of each auto insurance policy, make sure each one is providing the same level of coverage. You should also examine the deductible. If the coverage levels and deductible are the same, you can make a fair comparison between the rates.
  4. Review the quoted rates. Now you can compare the prices of each policy you’re considering. You may be offered a monthly price, or the total price for a six- or 12-month policy. Make sure this is the same between policy rates you’re considering.
  5. Choose the best deal. The lowest rate is often the most attractive choice. However, also take into account things like ease of filing a claim and customer service. Always make sure the insurance carrier you choose is licensed to do business in your state and has a solid reputation.
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Factors that affect car insurance rates

Insurers look at many factors when determining your car insurance premium. These can include:

  • Where you live: Insurance may be more expensive in areas with a higher cost of living, since it may cost more to repair your vehicle. People in urban areas also often pay higher rates because of higher incidences of vandalism and accidents.
  • Your age and gender: Young drivers are more prone to accidents than drivers with more experience, and therefore pay higher rates. Men also tend to be riskier drivers than women, and often pay more for car insurance.
  • Your vehicle and how you use it: A more expensive car will cost more to insure. If you drive frequently, you may also pay more for car insurance than someone who rarely uses their vehicle.
  • Your driving record: Insurance carriers take your driving history into account, including speeding tickets and other violations, as well as accidents. A clean record may mean a lower insurance rate.
  • Your credit score: Insurance providers also often use a credit-based insurance score to gauge your risk. Your insurance score is based on things like your payment history and use of available credit. People with higher credit scores are generally deemed to have a lower risk of filing a claim, which leads to lower premiums.
  • Your coverage levels: More coverage means a higher car insurance premium.
  • Your deductible: A deductible is the amount you pay out of pocket toward a claim before insurance kicks in to cover the rest. If you choose a higher deductible, you’ll pay more when you file a claim but your monthly premiums will generally be lower, and vice versa.

Check Out: What Happens If You Get Into an Accident Without Car Insurance?

How to get a low car insurance rate

These simple steps can help you find a low rate for car insurance while still getting the coverage you need:

  • Shop around. Insurance carriers can offer significantly different prices. Don’t just choose the first policy you find. Shop around, getting an auto insurance quote from multiple insurers to find the best deal for your situation.
  • Choose a higher deductible. The higher your deductible, the lower your monthly premium tends to be. To save money on your insurance rate, choose a deductible that’s relatively high — but make sure it still fits in your budget if you need to file a claim.
  • Pay in advance. Some insurance carriers may charge you a lower rate if you choose to pay for the entire six- or 12-month policy up front rather than paying month to month.
  • Bundle insurance policies. Bundling means buying multiple insurance policies from the same insurer, such as home and auto insurance. Many insurers offer you a discount on one or both policies if you bundle them. You can compare rates on insurance bundles just like you would on an individual policy.
  • Take advantage of discounts. Some insurance carriers may offer discounts if you take a defensive driving course, install anti-theft devices, or insure more than one vehicle. You may also qualify for a group rate through your university alumni association or a nonprofit you’re a part of.
  • Improve your credit score. Auto insurance providers may base your rate in part on your credit history. With good credit, you may find you receive lower car insurance rates. The best way to improve your credit score is to focus on making all your payments on time, every time.
  • Drive safely. Avoiding accidents and tickets will lead to lower auto insurance rates. Some insurance carriers even offer discounts to customers who have a clean record over a certain period of time.
Good to know: The national average auto insurance premium was $1,070.47 in 2019, according to the latest data from the National Association of Insurance Commissioners. State averages vary widely.

Frequently asked questions about car insurance quotes

Here are the answers to some of the most commonly asked questions about car insurance quotes.

Does the best auto insurance rate give you the best coverage?

Not necessarily. You can likely buy a bare-minimum car insurance policy that meets your state’s legal requirements for much cheaper than a comprehensive auto policy that’ll better suit your needs. But if you’re in an accident, you’ll want to make sure your finances are protected.

That’s why in many cases it’s better to pay a little extra to get better coverage. Start by figuring out how much coverage you feel comfortable with, and then compare rates for policies that meet those requirements.

Learn More: Comprehensive Car Insurance: What It Covers

What information do I need to get a car insurance quote?

While every insurance carrier is slightly different, you’ll likely need to provide the following information to get an accurate car insurance quote:

  • Personal information: This includes your name and address, driver’s license number, Social Security number, and contact information.
  • Details about your vehicle: This can include the year, make, and model. You may also need to provide the amount of miles on the vehicle, whether it’s financed and for how much, and your vehicle identification number (VIN).
  • Safety features: Some insurance carriers may ask about things like whether your car has an anti-theft device, anti-lock brakes, or passive-restraint systems.
  • Information about how you drive: Your car insurance agent may ask how many miles you typically drive in a day or week, and where your car is parked during the day and at night.
  • Details about your household: You’ll likely need to tell your insurance carrier about the ages of others in your household, especially other drivers in your family.
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About the author

Andrew Dunn

Andrew Dunn

Andrew Dunn is an award-winning mortgage and finance writer with a decade of experience covering the industry with articles published at Fox Business, LendingTree, Credit Karma, Axios Charlotte, and more.

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