Shopping for the best car insurance company with the best rate seems to be more complicated than it used to be. With all the added features and gimmicks, it is difficult to know which one is really the best. To better inform the consumer, it is good to have reliable information on the top companies you would do business with.
What to Look For and How to Begin
As you probably already know, a simple Google search blasts out a vast variety of insurance companies. Advertisements on television all promise savings. Their gimmicks attempt to grab your attention and win your business, which, all too often, can leave you confused. Have you ever ended up selecting the company you feel is most truthful in their advertising and try to get it over with quickly?
You can’t always go by what advertisers tell you, as situations vary driver to driver. You need to be educated as to what options are out there and how your unique situation will affect what you will pay. After all, every company does not have the lowest rates.
What are some Factors that Affect Car Insurance Rates?
How much you will pay for auto insurance will depend on many factors.
Where you live: Premiums differ from state to state, county to county, and even the zip code you live in could mean a higher rate than another. Those rates even vary by company. If you are considering moving and are weighing the pros and cons of different areas, then this could be one of the things you would want to consider.
Age and Gender: Young males will tend to pay the highest rates. Even your marital status could determine your insurance rate.
Driving Record and Experience: The longer you have driven without any moving violations or accidents, the better rate you will receive.
Driving Habits: How often you drive your vehicle can determine your insurance rate. The more miles you drive to work, or if you are a frequent traveler, can mean higher premiums.
Past Claims History: If you have a history of filing claims against past insurance policies, you could pay more when you renew or switch companies.
There are a few additional things to consider when shopping for the best rate:
Companies do not have a standard rule as to what is considered high risk. If you have had an accident or moving violation the variance in premium will differ from company to company. You may have to get several quotes before finding the company that will work with a poor driving record. If you are diligent, then you should be able to find a rate you can live with.
The type of car you drive matters. If you drive a vehicle that is listed as high theft, or more likely to be involved in an accident, expect to pay higher premiums. Even cars that have collision protection can actually drive up the price due to the cost of repairs. Other things that will drive the cost of repairs up is after-market installs. Things like rims, spoilers, and exterior lighting can be costly to repair. You will want to make sure that you have the right coverage to cover damage to after factory installs.
The perks. Some companies offer add-ons at no additional cost, while others only offer them at an increased premium. These perks vary from safe driving discounts to pet coverage if they are injured in your incident.
Basic Car Insurance Policy Types
Insurance terms can be confusing. Not knowing what each coverage does can mean you pay out of your pocket for injuries or accidents. Here are a few things to know before you begin looking for a quote:
Bodily Injury/Property Damage: When you are in an accident, this coverage pays for the other vehicle in the accident if you are found at fault. It does not cover you or your vehicle. The other party’s coverage does that.
Deductible: This is the amount you have to pay out of pocket before your insurance will kick in.
Uninsured and Underinsured Motorist: In the event of an accident where the other party is at fault and they do not have insurance, this coverage will help you and your vehicle. It will also help you if they do not have enough coverage to cover the damages they caused to your car.
Comprehensive: This coverage is for your car in the event of cases such as vandalism, natural disasters, theft, fire, and impacts with animals. The easy way to remember is that comprehensive covers when something other than a car hits your car.
Collision: This coverage is for your car as well, only it’s for when you hit something. If you hit a tree, guardrail, or even another vehicle, it will pay, after your deductible, to have your vehicle repaired.
Custom Parts/Equipment: This coverage is not used by everyone. But if you have after-market installations that are permanently attached to the vehicle you may want to consider this to cover your additions. The most important thing to know about this is that if you do have after-market installations, notify your insurance company or they may not be covered if you are in an accident.
How We Determined the Top Most Affordable Car Insurance Companies
Auto Insurance is not uniform. Rates will differ from company to company, policy to policy, and person to person. With a little research and shopping around, you can find the best rate that fits your current situation. We offer you, based on insurance ratings, the three best auto insurance companies. We took into account their affordability, customer satisfaction rating, and claims payment likelihood.
After running multiple surveys, we came up with six steps for you to easily find the cheapest auto insurance. Here they are:
Step 1: Gather your information. To obtain a quote you will need birth dates, an email address, and a previous address in most cases. Also, know what type of car you are driving. This is more than make and model. Know what trim package you have, etc. These little things do matter. If you are currently insured, having your policy handy is not a bad idea.
Step 2: Start getting online quotes. Do not make a decision with fewer than three quotes from different companies. The more you have, the better idea you will have of the range of prices you face. Remember, when requesting your quote, make sure you are comparing apples to apples. Select the same amount of coverage from each company.
BONUS STEP: Don’t be afraid of brokers. They do tend to be on the higher end, mainly due to their fees. They could possibly do your work for you with getting quotes from multiple sources, maybe even ones you do not have access to.
Step 3: Review what you found. If you are able, print out the different quotes you obtained. Make sure all the information is accurate and comparable. See if there are any differences with added no-cost features. These may be the ultimate thing that you base your decision on. Also, check on the policy exclusions (items that are not covered under the policy).
Step 4: Narrow the field. As you examine each quote, go back online and read customer reviews of the company. If ratings matter to you, check rating companies like J.D. Power and A.M. Best. They can give you a good idea of what other customers have gone through when dealing with filing claims and customer service. Once you have looked over everything, narrow down your decisions. Eliminate one or more of your quotes.
Step 5: Re-examine your options. As you continue your filtering process, you may come up a couple you can’t choose between. This is when you look at what other benefits will open up you in the future, like loyalty discounts. Look at the long-term customer experience. Look at the negative reviews and see why an ex-customer became an ex-customer.
Step 6: Make your choice. Now that you have weighed your choices, make your purchase. Be sure that you make all the choices that you made when you ran your quote. Make sure that there is nothing you have to do at the onset of your policy that will matter later on in your policy life, such as signing up for a safe driving tool that would give you a discount at a later date. Remember, your unique situation will determine which company is best for you.
Most Affordable Car Insurance (Overall)
Research has shown that over 75% of the time, Geico has the most affordable insurance, often by $100 or more per year. One of the reasons they are able to have lower rates is due to their coverage being closer to the state mandates than their competitors who require a bit more coverage than what’s mandated.
While their service rating isn’t as high as most other insurers, they are well known for providing inexpensive insurance that meets the requirements that drivers demand.
State Farm has consistently had a slightly higher premium than Geico. While higher, State Farm make up for it with added features other companies lack.
State Farm has been around since 1922 and is the largest auto insurer in the U.S. State Farm rate high in customer service surveys conducted by J.D. Power.
Progressive has a good handle on giving discounts to its drivers and has the most of the companies surveyed. Progressive’s options have affordability and flexibility rolled into one.
While they don’t have the highest J.D. Power ratings, they are competitive in pricing compared to other insurers.
Bonus Company: USAA
We have included USAA because oftentimes, the most obvious option for individuals goes overlooked. If you are a member of the armed forces, you, your spouse and your children are eligible for membership to USAA.
Around since 1922, USAA has more to offer than just auto insurance. With top ratings from J.D. Power, it is by far the most advantageous for those who qualify for their services.
If you’ve looked at different rates and still are not satisfied, there are a few final things you can do to help save money on that monthly premium.
First, you can play with your deductible. We all like to have the least amount of out of pocket expense if we are involved in an accident. However, the lower the deductible, the higher your premium will be. Select a higher deductible amount. If you have chosen a $500 deductible, rerun your quote with a $1,000 or higher deductible. This will assuredly lower your overall premium.
Second, research your car. If it is an older model, then you may not need some of the add-ons such as comprehensive or uninsured motorist. It is not recommended to omit these coverages, but if your ultimate goal is to save money on your monthly payment, then you may want to consider it. Keep in mind that you will have to pay out of pocket later if you have an accident with an uninsured driver or if a tree falls on your car.
Finally, talk with the insurance company. They may be able to find you discounts you may be unaware of. Things like anti-theft devices, an automobile club membership, or military discounts. There are many out there and it doesn’t hurt to ask if the end result is you saving money.
While it may require a little bit of research, in the long run, you’ll be happier that you took the time ask questions and do your homework.