Each of the big insurance companies would like you to believe they always have the best rates. It’s just not easy to compare them directly to each other because of all the options and variables that go into a plan.
If you want to be less confused though, here are some good tips in figuring out the best deal for you.
1. Nobody is the cheapest
The truth of the matter is, no one company is the defacto cheapest across the board. Life would be so much easier if it were as simple as that, but that just isn’t the case. Everything from your age to model to even your state can greatly affect how much you end up shelling out for coverage throughout the year. This is something you can find out for yourself if you and several other people ask for quotes in different states and then compare the findings.
Even if you just used yourself as an example, you’ll find that different companies will have different quotes in different states. State Farm might have the cheapest full coverage plan for you in Florida, but then be much higher compared to the competition in California. While this information isn’t inherently useful, it does prove a very important point. No matter what advertisements you may have seen, you shouldn’t shop for insurance with an expectation that a certain company will be the best rates. By doing so, you could be blinding yourself to other potential companies, like the next item on this list.
2. Consider local and regional options
When you only consider the big names like Geico or Progressive, you may be missing out on the savings that smaller companies might offer. Get online and check out some of the names that are local to you. They might not have memorable commercials, but they could represent a huge chunk of savings.
3. Ask about discounts
Many companies offer discounts that you might not know about. The only way you can know for sure is to call and ask about things like:
• Bundle car insurance with other policies, such as homeowner’s insurance to save money overall
• Swap to paperless statements
• Have anti-theft or other safety features on your car
• Cover multiple cars at the same time
• Have a good driving record
• Pay annually or semi-annually instead of month-to-month
• Is a member of a business or an organization with a group discount
Of course, you should still compare different rates even if a company offers plenty of discounts. That way, you can be certain you will be getting the best final price.
4. Have good credit
Except in a few states, insurance companies are more likely to give lower rates to someone with a better credit score. The outliers are California, Massachusetts, and Hawaii, where the law prohibits insurers from using a person’s credit in that manner. Other places like Michigan have certain limits on how those companies can use that information. For the rest of us though, having a strong score will directly influence our ability to get fantastic prices.
It’s important to note that companies use this information differently, so there isn’t a particular magical number to shoot for. One might find a FICO score of 580 or so to be “low”, but another might not. Ideally, just do whatever you can to improve your credit, such as paying your bills on time and cutting back the amount of debt you have.
5. Skip comprehensive and collision on older cars
Have you ever wondered if it would be cheaper to buy a new item rather than fix an old one? That’s sometimes the case with older cars and certain kinds of coverage. For those not in the know, collision covers repairs when you hit or get hit by another vehicle or object. Meanwhile, comprehensive covers things like weather, fires, vandalism, and theft. However, because the total you get is directly tied to the value of the car, it might not be worth the money on old vehicles that aren’t worth as much.
6. Have higher deductibles
The deductible on certain kinds of coverage refers to the amount you pay out of pocket before the insurance comes into play. If you are willing to have a higher deductible, that could lower your policy rate.
7. Switch to usage-based insurance
Usage-based car insurance like Progressive’s Snapshot or Allstate’s Drivewise might be perfect for you if you are a very safe driver. By tracking how much and how you drive, they can offer you a more personalized insurance plan. That way, you can earn discounts on driving in a safe manner.
Meanwhile, there are also plans that have you pay per mile driven, like Allstate’s Milewise or Nationwide’s SmartMiles. If you don’t drive that often and cover less than 10,000 in an entire year, this may be something to look into.
8. Check insurance per car when buying a new vehicle
Certain cars are just cheaper to insure than others, which is based on a variety of factors. If you are in the market for a new ride and also want to pay less on insurance, consider making a final selection based on what would be the cheapest to insure. Studies have shown that vehicles like the Subaru Outback, Honda CR-V, and the Mazda CX-5 have lower rates.