6 Steps in Comparison Shopping for Cheap Car Insurance

Fran
Fran Majidi
April 25, 2019

Your auto insurance has steadily crept higher each year and you’ve been with the same company for several years. You may be thinking that you don’t have the time to comparison shop car insurance quotes. You’re not alone. Most people want to avoid the long wait times when calling insurance carriers so they settle for whatever rate they’re offered at renewal time. If you’ve got an insurance agent, the car insurance (s)he sold you may be from the only insurance carrier (s)he works with. You may not be given all the options out there. Of course, you could take a day off and just call every carrier for a quote, but can you do something to get the best price possible without spending hours or days checking in with tens of insurance companies? Yes, compare auto insurance quotes for free. We’ll show you how in easy steps.

  1. What You Need to Compare Cheap Auto Insurance Rates

    Come Prepared! You don’t really need to go anywhere. In fact, you can wear your pajamas and drink your morning coffee while you compare rates at the computer because several insurance technology companies are ready to do the footwork for you. However, you’ll need some bits of information to get your free car insurance quotes. Keep this stuff handy during your call:

    • Basic information: Your full name, date of birth, garaging address, driver’s license and names of everyone you want to include on the policy as well as names of those you wish to exclude. Remember that most insurance companies will automatically cover you if someone in your household gets into an accident using your car even if you did not include him or her on the policy. This is called express permission. With that said, you’ll likely see a rate hike if people in your household are not excluded and are considered high-risk drivers. So, give this stuff some thought before you begin filling out the form.
    • Vehicle identification: Not only will you need your Vehicle Identification Number (VIN), you’ll also need the exact mileage, model, make and date of purchase of the car.
    • Driving history: Be honest here because if you’re caught lying you may be penalized with a higher rate. Mention all accidents, claims and tickets you’ve gotten over the past five years. You just can’t hide this stuff!
    • Insurance company: It’s always easier to get cheap auto insurance rates if you are currently insured. A gap in insurance may raise concerns about you driving without insurance. Also be prepared to give insurance information about the people in your household. Keep in mind that it is more difficult to exclude drivers who have no insurance of their own.
  2. Understand What You’re Buying

    • Liability Insurance. This is the coverage that will help pay for damages if you are at fault in an accident. It only covers you for damages to the other car and injuries/fatalities of the other vehicle. If you want protection on your car, you should consider adding on collision and comprehensive coverages (see below). You should always carry as much liability as your net worth, otherwise, you may be held liable for costs that could surpass the limits you placed on the policy. It’s not unheard off for a person’s savings account to be levied after an accident is determined to be someone’s fault and their insurance only covered part of the costs. Remember that you may be liable for injuries and medical costs too. Understand what the limits are when you get your auto insurance quote comparison so you buy what you need. You will see a 3-part breakdown of your liability insurance limits, the lowest usually being 50/100/50. This means you are covered for $50,000 for bodily injury per person, $100,000 for all bodily injuries and $50,000 for property damage.
    • Collision Insurance. Collision insurance pays for damages to your car if you cause a wreck or if you hit an object. You’re also covered if someone else damages your car in a collision and they are not insured or they are underinsured. You also have the option of buying uninsured/underinsured motorist.
    • Comprehensive Insurance. Comprehensive insurance is not really comprehensive at all. It covers you for the car’s blue book value if it’s stolen. You’re also covered in cases of natural disasters, fire, falling objects, collisions with wildlife and explosions.
    • Personal Injury Protection (PIP) & More. Depending on which state you live in, you may be required to have this type of protection In some states you are required to also have medpay and/or uninsured/underinsured motorist coverages.
  3. Understand the Insurance Company’s Formula

    Convenience means a lot to people but unless you’re okay with paying hundreds of dollars more each year than you need to on auto insurance premiums, you should compare car insurance quotes regularly. If you or someone you know simply bought their insurance from their parents’ insurer or landed an agent through word-of-mouth, you probably didn’t compare rates before buying coverage and are spending at least a few hundred dollars too much each year..

    While each insurer has their own way of determining car insurance rates, the usual suspects are: vehicle make/model/year, the coverage you choose, your age, gender (depending on state), zip code, marital status, credit (depending on state), annual mileage, driving history.

  4. What’s a Deductible?

    The deductible is what you pay when you file a claim for collision or comprehensive coverage. Usually, the amounts offered are $250, $500, $750 and $1,000. If you get into a car accident and your car will cost $1,000 to fix and you have a $1,000 deductible, it’s net zero because you have to pay that deductible before the insurance pays for damages. If you had a $500 deductible, you’d pay $500 and insurance would cover the remaining $500. You set your own deductible when you buy car insurance, so be prepared with the deductible amount you’d like to set on your policy. The higher the deductible, the lower your monthly costs but you’ll have to pay a larger deductible if you have an accident.

  5. Car Insurance Discounts

    If you don’t ask, you won’t get one. Besides, if you’re new to your agent, (s)he will most likely not know enough about you to know that you’re eligible. Here are the most common car insurance discounts available but note that not all insurance carriers will offer every single one, so ask questions.

    • Customer loyalty
    • Bundle
    • Early renewal
    • Multi-car
    • Multi-policy (bundle)
    • Good student
    • Homeowner
    • Low income
    • Senior
    • Affinity (i.e. alma mater)
    • Emergency roadside assistance
    • Military
    • Accident free
    • Good (or safe) driver
    • Low mileage
    • Defensive driver
    • Driver training anti-lock brakes
    • Anti-theft
    • Green/hybrid car
    • Safety/restraint
    • Auto-pay
    • Pay-in-full
    • Paperless

    Some discounts weigh more heavily than others. For instance bundling brings you a larger car insurance discount than a multi-car policy. Also, the insurer has the right to not go above 25% in discounts. It’s a complicated issue, but basically, insurers aren’t always looking to price you based on risk but based on what you’re likely willing to pay.

    In the end, don’t put too much emphasis on which discounts were honored and which were not. Focus on the bottom line, the total price of the policy compared with what you’ve been paying until now.

  6. Use an Insurance Comparison Site

    There are many insurance comparison websites popping up everyday so it’s important to be careful about which one you choose to work with. The last thing you need is the phone ringing nonstop with agents either so don’t fill out several at once. SmartFinancial is a reliable company that works with 200 different insurers to bring you a handful of the cheapest auto insurance quotes they are able to get from top insurance companies they partner with. From there, you review the different coverage and prices before buying what you need. SmartFinancial then connects you with the right agent. In 3 minutes, you could be saving over $650 a year in insurance.

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