How Do You Find the Best Cheap Car Insurance?
Easy, you want to find the lowest premiums for the best coverage with an insurance company that has reliable customer service and a good reputation. That’s because getting into a car accident is a situation where you will need and appreciate a reliable partner.
For shoppers looking for cheap car insurance from a solid car insurance provider, this list of best practices will inform you of some details you should consider when shopping around for insurance quotes. They’re categorized into four areas of consideration:
- Be Informed — Information is ammunition, a little knowledge about insurance before shopping will help you make the right choices and avoid the wrong ones.
- Balance Your Policy — Despite the state-mandated minimum coverage, you should tailor your insurance policy to your needs—sometimes getting more than the minimum coverage offers a better cost per dollar for coverage, look for the deals.
- Bundles, Clean Records, and Discounts — There are some easy ways to reduce your rates even more, and one crucial way to keep them low, hint: drive safe.
- Overlooked Ways to Reduce Your Insurance — Here are some not-so-common ways to reduce your rates.
The Risks of Cheap Car Insurance
Sometimes, drivers may reduce their coverages below a responsible risk protection level in the pursuit of the cheapest car insurance. This is not good, and it’s a situation best to be avoided.
Policyholders need to balance their financial health with the benefits of insurance. Insurance is a protection for your money from potential future catastrophes. And often, having just the state minimum required car insurance isn’t enough protection for most drivers.
When deciding on your coverage limits, you choose how much protection to surround your finances and assets. Think of it as a protective moat between your savings and any car accident claims against you—the greater the coverage, the wider the moat. With 56% of Americans with less than $5,000 in savings, if you wind up having to pay $10,000 out-of-pocket after an accident, will you have enough to cover it? If not, you could be in jeopardy of serious financial consequences.
Here are a few questions that you should consider and answer yourself honestly. The answers should help direct you towards what you have at risk.
- How much savings do I have?
- How much are my assets worth, like my house?
- If I only have minimum car insurance, is that enough to protect my savings and assets?
- If I’m injured in an accident and unable to work, how much savings do I have to sustain my lifestyle after paying any out-of-pocket expenses for the accident and my own medical bills?
Finding Cheap Car Insurance Best Practices
What Factors Do Insurers Use to Calculate Your Rates?
There are many common factors that insurance companies use to calculate your premiums. Some of them you have more control over than others, like what kind of car you drive. Maybe, to lower your rate, it’s time to change out your red Mustang for a modest sedan with a high safety rating. Consider how your lifestyle choices influence your premiums.
- Insurance Provider — Not all providers are created equal. Everyone offers their own benefits vs. price. Be sure to compare providers along with price and coverage benefits. You might find one gives more significant benefits, especially if the price is only a few dollars more. Also, compare customer reviews. There is a lot of value in responsive customer service. Find out if your provider is proactive when it comes to fulfilling claims.
- Driving History — Speeding tickets, DUIs, and reckless driving are just some violations that can inflate a driver’s rates. Insurance providers use a driver’s history as a predictor for their future behaviors, and ultimately how risky they are. Fortunately, this is one factor that drivers have control over.
- Age — Not an insignificant factor; age is one of those things you have no control over. Typically, the younger the insured, the more the insurance premium will be. Luckily, as you age and prove to be a safe and responsible driver, the lower premiums will go.
- Gender — Less of a factor than others on this list is gender. Though it has been shown that female drivers see a bump in their premiums compared to their counterparts, it is not as significant as other factors such as driver history, like getting speeding tickets. Men are ticketed 50 percent more than women across all age groups.
- Car Type — Driving a sports car? Expect to spend more on insurance. Family vehicles, like minivans, will fetch a better rate thanks to their safety record.
- Driver Location — Both the state and zip code are important factors. Regulations impact all rates at the state level, while each zip code’s unique characteristics, like driver density, or crime, contribute to how providers calculate overall risk.
- Credit Score — Another factor that impacts premiums, but is within the control of drivers, is their credit score. Insurance providers found that drivers with poorer credit scores file more claims than drivers with high credit scores. And more, they file claims of greater amounts than drivers with high credit scores.