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Why You Need To Comparison Shop

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Car insurance rates change every day and you could be leaving money on the table if you’re not comparison shopping. With car prices and repair expenses shifting, so does the cost of auto insurance. Insurers use these market changes plus other factors, like your age and driving history, when underwriting policies — that's why a different carrier may charge less for the same coverage.

You’ll never know if you’re paying too much for car insurance until you compare quotes.

Comparing Car Insurance Rates the Traditional Way

There are generally two ways to shop for car insurance: the traditional way or the SmartFinancial way. For comparison’s sake, let’s start by listing out the steps for shopping for car insurance the first way.

Step 1: Decide How Much Coverage You Need

Liability insurance is the most commonly required type of car insurance but you may need additional coverage depending on your state. For example, California requires only liability coverage but in Florida, you’ll also need to buy personal injury protection. If you’re financing or leasing your vehicle, you’ll also need to buy collision and comprehensive insurance.

In addition, you may want to buy coverage limits higher than what your state requires. This will provide added coverage if you get into a high-cost car accident.

Step 2: Make Sure You Have the Right Information and Documentation

Before you start contacting insurance companies, you’ll need to have some information handy. In general, you’ll want to have the following details to get the most accurate quote:

  • Vehicle year, make and model or vehicle identification number (VIN)
  • Vehicle mileage
  • Prior insurance history
  • Driver’s license number
  • Ticket and accident history
  • License suspension information
  • Financing or leasing information
  • Home address
  • Phone number and email address

Step 3: Research and Contact Insurance Companies

Next, you’ll need to contact each insurance company you’re considering for a quote. Many companies allow you to generate online quotes through their website, while others will require you to speak with a live agent. Either way, you’ll often need to supply the information listed in the last step to get your quote.

While pricing is important, it shouldn’t always be the deciding factor. You should also research each insurance company based on their customer service and financial strength.

Otherwise, you may wind up with an insurance company that charges low rates but has an awful claims process.

After deciding on a company, you just need to choose your coverage start date and pay your premium to start your policy.

The SmartFinancial Way To Compare Auto Insurance

Shopping around can be a tedious chore. Imagine calling each company one-by-one and repeating your information each time. Doing the legwork yourself might waste hours (possibly days) of work.

Here’s a better way to save you time, money and effort: Complete one convenient form to compare big carriers alongside smaller local ones for free by shopping with SmartFinancial.

How SmartFinancial Works

1
Complete a Quick Questionnaire

We’ll ask you some questions about yourself, driving history and the insurance coverage you want.

2
Find Coverage

Review the offers and choose the policy that best fits your coverage needs and budget. The best part: It’s 100% free and only takes a few minutes.

3
Compare Rates

We’ll sort through over 200 insurance companies large and small (so you don’t have to) and find the best rates available in your area.

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The Basics of Car Insurance

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Featured Guide

How Does My Car Insurance Policy Work?

Auto Insurance is required by law in all 50 states. Learn more about how it works and if minimum coverage is right for you.

Key Terms to Know

Key Term

Policy

Auto Insurance is a contract between the insured and an insurance company. If the insured suffers a covered loss, the insurance company will help pay for expenses. A policy lists all coverages and limits as well as a deductible amount if you have collision and/or comprehensive coverage.

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Key Term

Premium

Car insurance premiums are the amount you pay your insurance company to receive auto insurance coverage. In order to keep your policy from lapsing, you must pay your monthly, bi-monthly or annual premium.

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Key Term

Deductible

An insurance deductible is the amount you must pay before your insurance plan covers the difference. A $500 car insurance deductible leaves you responsible to pay $500 out-of-pocket before your insurance picks up the remaining balance for repairs and other losses.

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Key Term

Claim

A car insurance claim is a formal request for payment to the car insurance company to help pay for damages, loss or liability from a covered incident.

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Key Term

Endorsement

Also called a rider, an endorsement can add coverage, exclude coverage or modify an insurance policy in some other way. Some common types of endorsements include gap coverage, mechanical breakdown coverage and accident forgiveness.

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Key Term

Liability

Auto liability insurance is required in most states so that your insurance policy can help cover losses if you cause damage or injury to another driver, their passengers and/or their property or if you injure pedestrians. There are two components to liability coverage: bodily injury liability and property damage liability.

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Key Term

Collision

Collision insurance can pay to repair or replace your car after a collision-related car accident, even if you are the at-fault driver. Collision coverage is optional and is typically bought along with comprehensive coverage for individuals who require full coverage auto insurance. It is required when financing or leasing a car.

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Key Term

Comprehensive

Comprehensive insurance covers damages to your car that result from non-collision related losses like car theft, vandalism, falling objects and storm damage. It is required when financing or leasing a car but is otherwise optional.

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Key Term

Full Coverage

Insurers, agents, and lenders use the term "full coverage" to describe auto insurance that covers you for damages even if an accident is your fault and if something outside of your control, like a hail storm, causes damage to your car. Full coverage means that you carry collision and comprehensive coverages along with state required coverage.

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Key Term

Declaration Page

The declarations page is the front page of a policy that specifies the name of the insured person, their residence, the policy period and coverages. It also lists deductibles, limits, your user ID and other key data. Insurers informally refer to this document as the dec page.

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Key Term

Named Insured

A named insured is someone, like a spouse or child, who is listed on a car insurance policy. People who often use the insured vehicle should be listed on the policy to ensure coverage.

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Factors That Affect How Much You Pay for Car Insurance

Each insurance company has its own methodology for calculating insurance rates but factors commonly considered include age, location, your deductible and more.

Car Insurance Rates by Age

Teenage drivers sometimes pay more than double for car insurance compared to someone in their 30s. As you get older and gain more driving experience, you can generally expect your car insurance rates to decrease.

Age GroupMonthly Premium for InsuredMonthly Premium for Uninsured
Teenage$307.18 $334.26
20s$210.72 $226.64
30s$160.05 $156.72
40s$150.49 $141.91
50s$135.15 $125.38
60s$129.46 $118.52
70+$145.12 $141.95

Car Insurance Rates by State

Location matters when it comes to car insurance because local repair costs, car prices and crime rates all affect how much insurance companies charge. In fact, the difference in cost of insurance between two states can range from a couple hundred dollars to thousands of dollars. Take a look at how the states with the cheapest car insurance rates compare to the states with the most expensive.

RankStateAvg monthly rate12 month premium
1Idaho$82.40 / month$988.80 / year
2Maine$100.47 / month$1,205.64 / year
3Vermont$102.64 / month$1,231.68 / year
4Indiana$105.07 / month$1,260.84 / year
5Ohio$105.36 / month$1,264.32 / year
6Washington$107.77 / month$1,293.24 / year
7North Dakota$108.68 / month$1,304.16 / year
8Iowa$110.14 / month$1,321.68 / year
9Arkansas$118.28 / month$1,419.36 / year
10Illinois$118.53 / month$1,422.36 / year

In some states, car insurance can cost over $2,739 on average.

RankStateAvg monthly rate12 month premium
1Texas$179.95 / month$2,159.40 / year
2Georgia$188.57 / month$2,262.84 / year
3Wyoming$189.27 / month$2,271.24 / year
4New Jersey$195.69 / month$2,348.28 / year
5District of Columbia$211.52 / month$2,538.24 / year
6Connecticut$222.29 / month$2,667.48 / year
7New York$231.59 / month$2,779.08 / year
8Nevada$259.85 / month$3,118.20 / year
9Louisiana$273.95 / month$3,287.40 / year
10Florida$329.56 / month$3,954.72 / year

Other Factors That Affect Your Car Insurance Rate

In addition to location and age, insurance companies often consider the below factors when calculating your car insurance quote.

Frequently Asked Questions

What are the types of car insurance?

Liability insurance is mandatory in most states, with some states also requiring personal injury protection and uninsured motorist coverage. You can also buy collision and comprehensive coverage, which both insure your car against physical damages, including striking another car, fire, theft, hail and more.

What is the cheapest car insurance?

If you want the cheapest insurance possible, you’ll want to adjust your policy so that it meets only your state’s minimum insurance requirements. However, this will decrease how much coverage you have in a car accident and you’ll have to pay out of pocket for your own vehicle’s repair costs.

How to get car insurance?

The best way to buy car insurance is to compare rates. Not only do car insurance rates change daily, but you will get different pricing from each insurer.

More Resources

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Car Insurance by Make and Model

How much is car insurance for your vehicle? Your make and model are one of the biggest factors in determining the price you pay. Check out the average rates for the biggest car brands

Car Insurance Company Reviews

With hundreds of companies and coverage options it can be a bit overwhelming. We wanted to make things easier so we researched and reviewed some of the top companies around.

How Much is Auto Insurance in Your State?

We compiled our insurance data from thousands of insurance quotes across the country. Here is the average cost of coverage in each state.

Car Insurance by Age

Are you paying too much for car insurance? Check out the average rates that drivers in your age group are paying.

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