Did you know that the average car insurance cost in the USA could be over $1,600 in a year? That’s a lot of cash! Rates are dynamic, as insurance companies consider different things. This desk guide helps you find the cheapest car insurance so that you can save money.
Understanding Factors Affecting Car Insurance Rates
There are many things that can affect the price of car insurance. The insurance companies will know with how much probability you may have an accident. They check your history, the car you are driving, and even credit scores.
Driving History
Your driving history matters significantly. Accidents, tickets, and DUIs can elevate your rates. The more accidents are on your record, the more premium you will have to pay.
Actionable Tip: Recognize that, from this day on, driving safely and avoiding tickets will gradually reduce your insurance cost. It is worthwhile to consider taking a defensive driving course that would help you for your safety while earning a discount.
Credit Score
Believe it or not, also your credit does matter. Insurance companies believe that people with bad credit are more likely to file claims. Some states do not allow this.
Data Point: Having good credit will almost save you hundreds of dollars each year as opposed to having bad credit. In extreme cases, this can amount to over $1,000!
Vehicle Type
The type of car that you drive will also affect your rates. Generally, expensive cars and sports cars are harder to insure. Cars with enhanced safety record will score better according to the rating list.
Real-world Example: Insurance for a sporty coupe, for example, could cost significantly more than a family sedan, and perhaps an SUV would be somewhere in between. Newer cars featuring lots of standard safety equipment may qualify for the lower rates.
Top Insurance Companies Known for Affordable Rates
Some insurance underwriters are well known for low rates. These companies also tend to have lots of discounts and other ways to save. Be sure to get competitive prices from a national and local insurance company’s respective market.
Company A
Company A offers excellent discounts for safe drivers and students, and has great customer service.
Data Point: Company A has an average rate of about $1,200 per year.
Company B
Company B has cheap prices as well as good coverage options. They have special discounts for bundling home and auto insurance. With their online tools, it is easy to manage your policy.
Data Point: Company B’s average rate is $1,300 per year.
Company C
The Company C is a regional insurance provider with very cheap rates in certain regions. They are known for their personalized customer service and unique coverage options.
Data Point: Company’s average rate is about $1,100 per year.
Other Strategies for Less Car Insurance
Certain things, in fact, can reduce your car insurance. Small tweaks here and there can amount to big savings. Adjusting your coverage and availing discounts should be your priority.
Increase Your Deductible
Deductible is the amount of money which you have to pay before the insurance takes charge. If you increase it, premium would decrease. Just be sure that you will be able to actually pay that amount in case of certain accident.
Actionable Tip: Realistically calculate how much you can afford if you have had an accident. Then select the maximum deductible you can afford.
Combine Insurance Plans
Bundling refers to taking advantage of getting more than one type of insurance from the same company. You may bundle your auto insurance with your homeowner’s or renter’s insurance. Many companies have put discounts to offer for customers who do this.
Data Point: Bundling policies could save you an average 10% to 20% of your total insurance costs.
Take Advantage of Discounts
Insurance companies offer a lot of discounts. Most probably, you could get safe driver, good student or military associated discounts. Driving a car with safety features may also get you discounts. Low mileage discounts are also common.
Actionable Tip: Make sure that you inquire about every discount possible when getting a quote. Little discounts can add up to some significant savings.
State-Specific Factors of Car Insurance
The laws in every state and the car insurance they prescribe vary from the other. The basic cash coverage you need to have may vary in that it depends on where you live. These rules could also affect how much you are paying for insurance.
State Minimum Insurance Coverage Requirements
Each and every state has its own rules regarding the minimum amount of insurance you should have. Some states only require liability coverage. Others, however, require uninsured motorist coverage as well.
Real-world example: For example, California has, at minimum, 15,000 bodily injury liability coverage per person, 30,000 per accident, and 5,000 property damage liability coverage.
States with “no-fault” insurance systems avow they will cover their residents’ auto accident-associated injuries through their insurance policies, no matter who caused the accident. On the other hand, states with “at-fault” pay the insurance of the at-fault driver for auto accident damage repair. This can also affect the way your insurance works and how much you pay.
Quotes Comparison: Choosing the Best Deal
This is the way to go for cheap car insurance: comparing quotes from different companies. Getting quotes ensures that you are getting the best price. Ensure that you’re comparing coverage and deductibles that are as similar as possible.
Conclusion
Finding a cheap car insurance policy requires effort. Compare quotes, check for discounts, and review whether you can increase your deductible or minimize some coverages needed. Keep in mind that rates depend on several factors. A little digging and you will save money on your auto insurance.
