With over 600 auto insurance companies in the US market, how do you shop for the right one? Insurers use personal factors to determine the cost of your insurance, including how you drive, what car you drive, your zip code, credit score, and even age. For example, one insurer may raise your rates for driving a high-end car, while another might charge you more for living in a high-crime area.
When shopping around for an auto insurance policy, it is a good idea to compare car insurance quotes from multiple providers. Doing so will help you settle for a policy that fits your budget and coverage needs.
Here are some of the essential metrics that you can use to compare different auto insurance quotes and choose the most appropriate one.
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Age is one of the major factors that insurance companies consider when coming up with car insurance quotes for their clients. Auto insurance rates are through the roof when you first get your insurance as a teen and continue to decline with each birthday, up to the age of 50. Once you hit 60, the rates begin to increase once more.
Typically, senior drivers and inexperienced teen drivers have record-high crash rates compared to other age groups, making insurance companies warier in insuring them. So if you fall between the age bracket of 24 and 60, you are more likely to find the best car insurance rates.
As you go through different auto insurance quotes, it is important to check their annual premiums for each age group to decide which one fits best for you. For example, a company that charges extremely high rates for teens is not a good choice if you are a young driver who wants to save on car insurance. However, there are providers that can provide you with cheap car insurance for young drivers.
By Credit Score
Insurance companies use credit scores to decide whether or not to offer you an auto insurance policy. If you have a high credit score, you are likely to pay low insurance rates and vice versa. According to statistics, drivers with high credit scores spend an average of $1,379 for car insurance each year. Those with poor credits pay 88 percent more. This means that you can still qualify for auto insurance even if you have a bad credit score.
The effect of credit ratings varies heavily between insurers. In some cases, your credit score can mean a doubling of insurance rates or a quarter cut off your bill. It is not worth settling for a quote if the difference between good and poor credit means a huge difference in premiums.
By Driving Record
The best way to keep your insurance premiums low is to maintain a clean driving record. On average, a ticket can increase your auto insurance rates by 29 percent and an accident by 10 percent.
Insurance companies run a background check on your driving record when you first apply for a policy. Getting points on your driving license results in high premium rates. However, the extent to which these rates go up depends on how insurers weigh on the violation.
In California, for example, a driver with two points on their license for driving recklessly pays triple the cost of insurance. But in Florida, the same violation only causes an increase of 44.5 percent on auto insurance rates. Therefore, if you have a driving record, you may choose to go for a quote that relies more heavily on other factors in determining cost.
By the Type of Auto Insurance Coverage That You Need
The type of coverage that you choose has a significant impact on your auto insurance rates. It is subject to different factors, such as where you live and whether you lease your vehicle or not. When shopping for auto insurance coverage, make sure to check with your state department of insurance to make sure that you get the right one.
There are six main types of auto coverage that can be included in your policy. These include liability insurance, uninsured motorist coverage, comprehensive insurance, collision insurance, personal injury (PIP) protection, and medical payments coverage. Besides these packages, there are other optional coverages, such as rental reimbursement and labor coverage. They vary by insurer, and if you want to get one of those, it may be helpful to search for insurance companies that offer them.
Don’t be so focused on the lower prices that you miss out on the type of coverage that you need. For example, don’t buy your state’s minimum requirement when you need full coverage.
By Car Insurance Deductibles
A deductible is an essential part of any auto insurance quote. It is the amount you pay out of your pocket to cover an insured loss. When your vehicle gets in an accident, the deductible amount is “deducted” from the claim payment. The higher the deductible, the less you’ll pay for insurance. So, how do you choose an auto insurance quote with the best deductible?
There is no specific definition for a “good deductible.” A deductible is as good as its fits your budget flexibility and psychological comfort. You may be okay with quotes that offer lower monthly premiums and a high deductible if you have more savings. But if you’re on a tight budget, quotes with high monthly premiums and lower deductibles are a great option.
How Do You Choose the Best Auto Insurance Quote?
Once you’ve gathered and compared quotes from different insurance companies, it’s time to settle for an ideal one.
Here are some of the questions you should ask yourself:
- Which of the quotes favors my age bracket?
- Do all the quotes feature the type of coverage that I want/need?
- Do the quotes offer the same deductibles?
- Which of the quotes is in favor of my credit score?
- Which of the quotes is best for me if I have a driving record?
The Bottom Line
Don’t get trapped by quote comparison websites that make money off selling your data to insurance companies. Roll up your sleeves and do the comparison yourself. Some of the most important factors that you can use to compare different insurance quotes against each other are age, amount of deductibles, type of coverage you want, driving record, and credit scores. It shouldn’t be hard to decide when you have the most important factors to consider in mind.