Are you looking to save money on car insurance? It's not as easy at it sounds. Lots of insurance companies make big promises, but fall short when it comes time to pay up. Getting cheap auto insurance without comprising coverage or service and without falling for a deal that's too good to be true takes effort. And while shopping for car insurance can be daunting, we've put together a guide to help you find auto insurance that won't break the bank.
7 Steps to Finding Cheap Auto Insurance
- Basics: Make sure you have a firm understanding of auto insurance basics.
- Credit Score: Your credit score affects your car insurance rate, so make sure items on your credit report are up-to-date and accurate.
- Deductible: Decide how much of a deductible you're willing to pay and make sure you can you afford it. While increasing your deductible is a great way to save money, it doesn't really help to have an insurance policy that's cheap if you can't afford your deductible.
- Research Companies: What is the company's reputation? Read forum posts and reviews to get an idea of the kinds of issues customers face.
- Shop Around: Get quotes from more than one auto insurance company.
- Discounts: When you're shopping around, ask each company about any discount options they offer, and how to get auto insurance discounts applied to your policy.
- Make a Selection: Choose the best auto insurance policy and company for your needs.
Do You Have Enough Coverage?
Everyone needs to know how much auto insurance coverage they need. This is a vital question when searching for cheap car insurance. Each state has its own mandatory minimum auto insurance requirements. Check your local state DMV website for your state's requirements .
Although you may choose to pay for the minimum requirements needed by your state, this isn't always the best decision. Make sure you have enough coverage so that, in the case of an accident, coverage is sufficient for the damages on your own car. Also consider having enough coverage in case you're responsible for the accident and must pay for another person's medical bills or vehicle repair. And don't forget uninsured or under-insured motorists.
The New York Times and the Wall Street Journal both have guides to help you determine if you have enough auto insurance coverage. Mostly, it comes down to how much risk you're willing to assume, especially in cases where the other driver may be at fault but doesn't have insurance. It happens more often than you may think, with an estimated 13.8% of U.S. drivers with no insurance.
Other things to consider that raise the cost of your insurance include things like glass coverage and towing – two options you can leave off to save some money, but may end up paying for later if and when you need them. Same thing with comprehensive and collision coverage. Both may be unnecessary if your car isn't worth much to begin with since you're only covered for the value of the car. If you skip them, you have to be willing to live with a few dents or other minor damage to your vehicle or you'll have to come up with some extra money to get them fixed.
Making sure you're getting all the discounts available to you is important when trying to get cheap auto insurance. Here are a few to look for:
- Bundled discounts: Receive lower rates when you bundle your car, home, or other insurance with the same company
- Multi-car discounts: Save money by insuring multiple vehicles with the same insurance company
- Pay annually: Many companies will offer you a discount when you pay annually or bi-annually
- Group discounts: Belonging to certain professional groups or organizations may qualify you for a discount
The Car You Drive Matters
Insurance rates are impacted by the type of car you drive. Owning a flashy sports car may sound exciting, but it's probably going to increase your insurance rate. So will owning a car with high repair costs or high theft rates. Although owning a used car is likely to lower your insurance, safety features on newer vehicles can also help lower your insurance rate. Most insurance companies will offer lower rates for cars with safety features, as well as anti-theft features. So keep those things in mind when you're shopping for a car.
Don't Get Taken For a Ride
Here are some warning signs that your auto insurance is too good to be true:
- You receive an initial quote but are later charged a higher premium
- You're dropped after filing one claim
- Your insurance claim is denied, despite its legitimacy
- You are placed on hold and transferred from one agent to the next
Whether it be a cracked windshield or a full on collision, the car insurance you have should support you in your time of need. So how do you make sure you're not being taken for a ride? Here are some things to keep an eye out for when you're shopping insurance:
Checking the ratings and reputation of an insurance company provides you with a strong sense of whether you can rely on what they're offering. Here are some important factors to consider:
- Longevity: How long has the company been in business?
- Customer Service: How does the company rate in regard to customer service?
- Claims: Will you be dropped on your first claim? Will your claims be paid? Read forum posts to find out what kinds of experiences past customers have had.
- Research and Check: J.D. Power and A.M. Best both have auto insurance rating systems that will help you in the process of finding a reputable car insurance company as you search for a cheap auto insurance policy.
Getting a Quote
When getting a quote, be aware if the premium is drastically lower than what you are paying now or lower than other quotes you are receiving. This could be a warning sign that something isn't right. In some cases, the premium quoted may not be the final premium charged. This is because, after going through an underwriting process and review, the premium amount may change based on elements discovered on a person's record. So make sure you disclose any information upfront that may affect your insurance premium.
This is true whenever you get a new quote for car insurance. Keep in mind that your existing insurance company knows your driving record and claims history, so the price you're paying for insurance is very accurate. This same information is available to other insurance companies giving you a quote, however, they have to pay a fee to have access to it, so sometimes an agent will be reluctant to pull it. No one wants the hassle of changing from a new car insurance company back to their previous insurer. So confirm that the quote you're receiving has been made after pulling your records and is not simply based on the information you've provided the insurance agent.