How to find the best car insurance for your needs
When you get your driver’s license, it feels like a monumental moment. You might be able to drive to work, school, or your favorite restaurant. You probably won’t need a parent to drive you anymore. And you can ditch your dad’s old truck, which is probably costing you money in repairs and gas anyway.
Today’s drivers face many challenges when considering their car insurance options. The cost of coverage has risen over the past few years, especially for young drivers with weaker accident records. Many drivers have been priced out of the market entirely due to stricter regulations on eligibility for discounts and new technology requirements for policyholders.
That leaves most people feeling like they don’t have much of a choice when it comes to auto insurance coverage anymore. Fortunately, there are still some great options out there if you know where to look...
Where to find the best vehicle insurance for you
The difference comes in the amount and type of coverage you choose. For example, if you have a car worth $10,000, you may want to buy purchase a full coverage auto insurance policy to replace it if it gets stolen or damaged. If you have a $100,000 sports car, you may want to go with a high-risk auto insurance policy that includes higher coverage limits. The other big thing to consider is your driving record. The fewer accidents and violations you have, the less you will pay for your auto insurance.
If you are getting your license for the first time, you can expect to pay higher premiums than someone with a decade’s worth of driving experience. If you have any negative marks on your driving record, you may need to get special high-risk auto insurance to cover your vehicle
Finding a great deal on Auto Insurance
Before you start comparing rates from different carriers, you first need to get a clear picture of your current situation. According to the latest data from the National Association of Insurance Commissioners, the average American driver pays $1,235 per year on car insurance. That’s the average cost for the 30-year-old, single male driver with no accidents or violations on his record.
- What type of coverage does your state require
- What kind of coverage do you really need
- The value of your car
But if you have a clean record, you have been driving for 10 years, and you’re single, you can expect to pay less. A younger driver with a few accidents on their record will pay more. When you start shopping around, you’ll need to know three things:
Shop around and compare rates
If you just jump online and start filling out auto insurance quotes, you risk being quoted the highest rates possible. Insurers will ask you a lot of questions about your driving record, occupation, and other factors that influence your risk. When you start a quote, make sure to check the box that says you want to see the highest rates possible.
That will show you the policies you have almost no chance of getting. After you have a few quotes in hand, compare them based on the following factors:
- Installment cost
- Coverage amount
- What discounts do you qualify for
Ask family and friends for recommendations
If you don’t mind having the same insurance as your parents, now is the perfect time to ask for a referral. Parents can probably remember their own frustrating shopping experiences, but they might also have a few tricks up their sleeves. Most parents will likely want to go with a big national company like State Farm, Allstate, or GEICO.
These companies are so popular because they offer the lowest rates to the largest number of people. Since those companies have so many clients, they can afford to offer cheaper rates through economies of scale. However, these companies may not have the best rates for you. If you are a student, or if you are between jobs, now is the time to ask your family and friends if they have any recommendations.
If you are self-employed, or if you have unusual driving habits, you might have to shop around a bit more, but there is a lot of valuable information available online. You can start by checking out online forums where people discuss their experiences with different companies.
Check out smaller insurance companies and brokerages
If the major insurance companies are out of your price range, the best way to find cheaper auto insurance is to go with a smaller company. The problem is that you don’t know if they are any good. In some cases, you might not be able to find a smaller company that is willing to take you on as a customer.
There is a lot of talk about discrimination against young drivers. Some experts think that it is a myth, while others think that it is an unfortunate reality. If you are having trouble finding a cheap policy, it might be worth looking into the smaller companies that are usually available through independent insurance agents.
Don't forget your credit score
A person’s credit score is based on several factors, but the general rule is that a higher credit score equals lower car insurance rates. You can access your three credit reports for free each year at Annual Credit Report. Protect your credit report. If you see something on your report that you don’t think is correct, you can dispute it.
This puts a note on your credit report that they need to investigate it. Most car insurance companies will allow you to upload a copy of your credit report. If you have a good credit score, you may be able to get a lower rate. You can look at your credit report and make sure that it is accurate.
Bottom line
Choosing the best auto insurance for your situation can be a frustrating process. You need to understand what coverage you actually need and shop around for the best rates available. If you want to get the best rates possible, you need to be willing to shop around and compare rates from various insurers.
You also need to make sure the company will accept you as a customer, so you need to be honest about your situation and include all relevant information in the application process.
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