All states have minimum car insurance requirements regarding liability coverage. Some states even require under-insured or uninsured motorist coverage as well as personal injury protection (PIP). Before you buy car insurance, review your state’s car insurance laws and then compare rates, policies and companies online to find the best coverage for your needs.
If you currently have car insurance, how do you know you have the best protection? This is why research is important. Learning about the different types of policies available, how to get cheap rates, and where to find the top insurance companies can guarantee you buy the right coverage the first time and eventually qualify for loyalty discounts in the future. It’s easy to compare car insurance quotes, but you will need to do some analysis when figuring out which policy is best.
Types of Car Insurance Coverage
The different types of car insurance coverage available include:
- Liability car insurance for bodily injury and damage to property;
- Comprehensive coverage for losses due to fire, theft or natural disasters;
- Collision insurance to cover the repair or replacement of your own car after a collision with another car, object or structure;
- Emergency roadside assistance and towing support in case of any breakdowns, tire issues or roadside problems;
- GAP insurance, which is especially valuable for new cars, covers the difference between the purchase price and the current market value of your car in case of an auto accident
Once you have checked out the state minimum requirements (fortunately, companies already provide you the minimum), you must decide whether basic liability coverage will give you enough protection and peace of mind for potential losses. Having a car loan or lease will determine what type of coverage is non-negotiable for the driver, as most loans require that liability, collision and sometimes comprehensive coverage must be included.
Just remember that, the more insurance coverage you buy and the lower your deductibles are, the higher the premiums. Conversely, if you buy the minimum amount and increase your deductible to $1,000 or $1,500, you will get cheaper rates.
While it is important to keep cost considerations in mind, it is critical to weigh those costs against the risk of being under-insured. With the way healthcare and living costs have skyrocketed, state minimum car insurance is not enough to cover medical care and major vehicle repairs if you are at-fault in an auto accident.
How Insurance Claims Work
After a car accident, your insurance company will subtract your deductible, process your claim, and pay out to cover the assessed damages, but only up to the maximum levels you have purchased on your policy. Any damages, repairs, or litigation settlements beyond that amount will become out-of-pocket expenses, making you personally liable.
For this reason, the amount of car insurance coverage you decide to purchase is critical. Balancing between upfront premiums and future coverage requires families to compare car insurance quotes to see which company will offer the best coverage for the lowest rate.
Factors That Affect Car Insurance Rates
Car insurance companies consider many factors when calculating rates, and each factor affects your quotes differently. Basically, to sum up these factors, companies are looking to analyze the kind of coverage you want to buy, the risks you pose the company and the likelihood of a future payout on your behalf.
Risk factors that could affect your car insurance rates include:
Gender. Men tend to be more aggressive and faster drivers. Males also spend more time on the road because of the commute to and from work, making them more likely to be involved in accidents.
Age. Younger, less experienced drivers are considered high risk. Senior citizens, although they drive less, may have slower reflexes. For this reason, young, male students and teenagers tend to have the most expensive car insurance rates.
Marital Status. Statistics show married drivers tend to be more responsible and safe, resulting in fewer crashes than singles.
Driving History. Drivers with a clean driving record get the cheapest car insurance, while “high risk” drivers with multiple citations, tickets, or car accidents are likely to continue to cause collisions, and therefore warrant higher premiums. Ask for a copy of your Motor Vehicle Report (MVR) to see details on past accidents and moving violations.
Where You Live. Densely-populated urban areas with traffic congestion and higher rates of theft result in higher costs, while rural areas offer cheap quotes.
Type of Car, Make, and Model. Drivers of high performance sports or luxury cars are likely to drive faster. Expensive cars are costly to repair or replace, and therefore claims paid out will be higher to cover damages and repairs. How your car performs in crash safety tests can also increase or decrease your premiums.
Annual Mileage. The more you drive, the more likely you are to be involved in an accident, which is why insurance companies give “Low Mileage” discounts for policyholders who drive less often and/or for shorter distances than the average driver. If a particular vehicle is used only for joy-riding on Sundays, mention that to your carrier to get a reduced rate.
The best ways to lower car insurance rates are to change or improve the factors that are within a driver’s control. The cost of coverage is negotiable by changing deductibles and the amount of liability, comprehensive, collision, PIP, and medical coverage.
By removing extras such as roadside assistance and car rental insurance, paying off a car loan to avoid GAP Insurance, and cleaning up your credit history, a policyholder can find cheap quotes. Drivers should also review their driving report for any incorrect information.
Car Insurance Discounts
When you compare auto insurance rates, you will notice that certain risk factors may increase your rates, but other factors such as a safe car, a clean driving record, customer loyalty, lifestyle choices and payment preferences may entitle you to discounts. The following are ways to get cheap car insurance.
Vehicle discounts are savings associated with the make, model and type of car you drive (coupe, sedan, SUV, van, luxury, sports, etc.).
- If your car has an alarm or anti-theft device, you could save up to 10%
- If your vehicle is equipped with safety features such as airbags or anti-lock brakes, you’ll save up to 30%
- Buying a “new” car, or one that is less than 2 years old, can save you up to 30%
- A “green” vehicle, such as a hybrid, may reduce your premium by 10%
Lifestyle discounts are factors within your control and qualify you for affordable car insurance.
- A “Defensive Driver” discount requires you to complete driver’s education courses or defensive driving classes while maintaining no violations or at-fault accidents, qualifying you to save up to 10%
- A “Safe Driver” discount means you have a good, clean driving record and qualify for up to 30% off your premiums
- “Low Mileage” means you drive significantly less than 12,000 miles per year, saving you 10%
- A “Good Student” discount can save full-time students up to 20%
Policy discounts are determined by payment preferences and purchasing additional coverage through your carrier.
- Get a “Multiple Policy” discount when you buy more than one insurance policy with your company
- Save 10% when you pay your policy in full for 6 or 12 months
- Go “Paperless” and view all your documents online to save up to 10%
Get All The Facts
Before you contact a company, think about how much time you could save by comparing multiple car insurance quotes online. Be prepared and have the following information ready:
- Type and amount of coverage required, such as $100,000 liability car insurance
- Personal details about each driver, including age, address, contact information, marital status, and current insurance
- Vehicle details including year, make, model and even a VIN number may be helpful
- List of primary and secondary drivers for each vehicle
- List of discount options
Auto Insurance Quotes Online
Follow these steps to get your free online car insurance quotes:
- Study the available coverage options and make your decision about what you require;
- Identify the vehicles and family members to be covered;
- Identify primary and other drivers for each vehicle, choosing the safest, lowest cost drivers as primaries;
- Make sure all necessary personal information and vehicle documentation is available;
- Prepare a list of possible discounts you qualify for;
- Enter your zip code at MyCarInsurance123.com to find the best car insurance companies in your area offering free quotes; and
- Choose an auto insurance company and begin the online quote process.
When completing your comparisons, make sure that you are comparing the same insurance coverage, amounts, deductibles, discounts, rates, terms of payment, and terms and conditions. Check your policy and payout terms, the fine print and exemptions very carefully.