5 ways to get good and cheap car insurance

Cheap Car Insurance

Auto insurance can sometimes seem like an unwanted expense, but it has a good purpose – it can protect you from financial loss due to injuries or property damage related to a traffic accident, car theft, natural disaster, or some other event.

1. Use a car insurance comparison site to compare quotes

You will need to shop if you are looking for competitive insurance rates. Consider getting auto insurance quotes not only from national auto insurers, such as Geico and Allstate, but also from smaller insurers, because you never know where the best deals might be hiding.

One of the simplest ways to shop for insurance coverage is to compare car insurance companies online. If you’d prefer to review your insurance options with someone, working with an auto insurance agent is another way.

2. Understand the factors that affect your premium

It’s not just your driving record that determines the insurance rates you get. Insurers determine the cost of insurance – their premiums – based on the risks they take by insuring you. They use to claims the data and the personal information, among other factors, to assess this risk.

In some states, your credit can have some effect on your premium (although California, Massachusetts, and Hawaii have all banned the practice of using credit-based insurance scores to help set rates). And while it’s somewhat controversial, using credit insurance scores to influence the cost of premiums remains a reality, with studies and surveys indicating that those with less than ideal credit are more likely to make the insurance claims and the vice versa.

Whether or not you agree to this practice, know that in some states, drivers with better credit may get better rates than those without good credit. For example, a 2015 consumer survey showed that individual respondents with “good” credit paid up to $526 more annually (depending on their condition) than comparison drivers with the best credit scores.

In addition to credit, insurance rates may also be affected by the following factors:

  • Your Zip Code Certain areas have higher than normal rates of vehicle theft and accidents. Car insurance companies may take this into account when setting rates.
  • The year and model of your car – the higher the cost of your car, the higher your insurance rates will be. Insurers can also look at whether drivers of the same make and model tend to make more claims or have more accidents, as well as the results of safety tests, the cost of repairs, and the rate of theft.
  • Miles You Drive Each Month Putting fewer miles on your car each month can affect the prices you get.
  • Your driving record – drivers with a clean record usually qualify for lower rates – and may qualify for a good discount/safe driver.
  • Your age and marital status – the data shows that the probability of an accident may be related to these factors.

3. Consider the limits of your liability coverage

Liability insurance typically consists of three types of coverage: bodily injury liability coverage, property damage liability insurance, and uninsured drivers coverage.

Each state that requires the liability insurance has its own the minimum coverage requirement, but you can choose more coverage at a cost. In general, the higher your coverage limit, the higher your auto insurance rate will be.

4. Consider raising the deductible

The deductible is the amount you will pay out of your own pocket to cover the cost of an auto insurance claim. You may be able to lower your monthly premium simply by increasing the deductible.

However, you will want to consider your general financial situation when deciding on a discount. If it is too high, it could cause financial hardship down the road if you ever need to file a claim.

5. If you have an older vehicle, consider skipping the comprehensive and the collision coverage

Collision coverage can protect you in the event you get into a single car accident, hit a car or something else. Comprehensive coverage can protect you if your vehicle is stolen or damaged due to non-traumatic events such as theft, natural disasters or contact with an animal. Together, these coverage options are the designed to cover the repairs or reimburse you for the value of your vehicle.

Comprehensive coverage and collision coverage is optional – unless you rent or finance your car, in which case your car lender may require it.

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