Why Do I need Car Insurance?
It can be a challenge to find affordable car insurance that suits your needs. And with car insurance being required by all states in the U.S. (except New Hampshire), it is your job to make sure that you carry this coverage. So if you are looking for the cheapest or premium car insurance with a great customer support, we have got all you covered.
FAQ On Car Insurance
How Does Car Insurance Work?
Once you buy your new car, you will be required to purchase a car insurance policy. However, these insurance policies differ based on the make and model of the car, driving history of the driver, personal credit history, claims history, gender and few other factors. The insurance rate also differs when it comes to business cars vs private passenger cars. Due to business cars being more exposed to risks, the pricing will be higher for those cars. A standard car insurance policy will cover damage to public property as a result of a car accident.
When you apply for auto insurance, the carrier will offer you a package that will include comprehensive and collision coverage. The comprehensive coverage will protect you against “covered” incidents which are “other than collision”: items such as cracked windshields, vandalism to the car and coverage for grand theft auto are covered. The collision coverage will protect you against damage that can happen to the vehicle as a result of a covered auto accident “other than comprehensive.” However, you also have the option of customizing this policy by adding more to it such as medical, towing, rental, under insured and uninsured motorist coverage, and many more.
Safety should always come first. So if you are a careful driver, at renewal time, you could see a premium decrease to your policy. This happens when your auto insurance company considers you as a less risky driver.
How To Save Money On Auto Insurance?
Remember, the main goal of searching for auto insurance isn’t to find rock-bottom, cheap auto insurance rates. These could come back to bite you if you ever had these super low rates and had an auto accident that was catastrophic; even to the point where someone lost their life. That rock-bottom low rate auto insurance is only going to cover a very small portion of the total liability claim. You are looking for an auto policy that is a good mix of affordable (not necessarily low) prices mixed with superior liability coverage. This will keep you from being sued and having to pay out of pocket expenses for any settlement claims.
Compare Rates: Before choosing any auto insurance, experts advise consumers to make a detailed comparison on rates and plans offered. However, don’t be misled by any auto company verbally claiming to offer the cheapest rates. Confirm that by getting a quote in writing from them and compare it to other companies and make sure you are comparing the same terms and conditions too! You do not have to walk door to door from one insurance company to the next; you can make these auto insurance rate comparisons online. The auto insurance industry is very competitive and the insurance companies cannot afford not to put their best foot forward when you are requesting a quote as you can easily switch over to one of their competitors in order to secure an all-round better policy. If you dig deep, you will soon realize that each and every insurance carrier has their own distinct car coverage packages which offers discounts and other benefits. You should also consider the following:
- Company Reputation: Many people ignore this basic criteria, but this does matter. Similar to any other industry, people write reviews on services offered by any given company. Therefore, use the internet to find out what people say about that particular auto insurance company. Yes, they might have cheap rates, but do they have an efficient customer support; if the answer is NO, then it is not worth it.
- Deductibles: If this is your first time owning a car, you may not be aware of this: A deductible is the amount paid by you to get your car repaired by your insurance company after a “covered” accident. As a new auto insurance owner, remember: The higher you make your deductible, the cheaper your monthly premium will be. But, if you raise your deductible to say $2,500, could you afford that when the time comes? You need to get that fine balance between your ideal deductible amount and the insurance premium payable.
- Discounts: Most auto insurance companies only offer discounts when you buy more than one policy with them. It is an added incentive for the insured (you) to purchase more lines of insurance other than auto insurance with the same carrier; for example, you could also purchase a home or health insurance.
Cheapest Auto Insurance for Young Drivers
If you want to read more about the Cheapest Auto Insurance for Young Drivers, please read the following articles:
- Who Has The Cheapest Car Insurance For Teenagers?
- Cheapest Car Insurance for College Students: Is it Possible to get lower premiums?
- How To Find Cheap Car Insurance For Young Drivers With Pass Plus?
So Who Has The Cheapest Auto Insurance Rates Anyway?
This is a question asked by many car owners around the world. In the U.S., there are many auto insurance companies, but statistics shows that companies like GEICO and PROGRESSIVE offer the cheapest auto insurance rates. However, you should still shop around and compare your current policy with that of other insurance companies. In the list below, we have featured some of the lowest auto insurance rates from providers in the U.S. In addition, most of these companies have stretched their reaches to other countries which now make them international companies.
Furthermore, when you switch States in the U.S., you will notice that some States have cheaper auto insurance rates. This is because each State has its own insurance laws, so as you plan to shift to another State, make sure you get rates from that State. If you need a detailed breakdown of the insurance rates in each State as well as information such as how the rate for male and female drivers compare or the rate for different age group, click here.
The other factor you have to consider is your driving history. We cannot all have the same auto insurance rates. For example, you might be using the same auto insurance company as your neighbor, but you might notice they have a cheaper rate than you. This could be due to their driving history. Those who have a great driving history with minimal to no moving violations or accidents will get the cheapest car insurance rates from the carrier.
When you have a bad driving history, poor credit history, or multiple car accidents, the insurer will classify you as a risky driver. They will be forced to charge you a higher rate so that they are in a position to handle those risks when they arise.
Our List Of The Cheapest Auto Insurance Carriers
Geico Auto Insurance
Government Employees Insurance Company (GEICO) is one of the oldest auto insurance company in the U.S., and their main goal is to enable anyone to have an auto insurance policy. So no matter what your income is, they will have you covered. To prove that GEICO is the best and the cheapest, they have managed to insure over 17 million vehicles in the Unites States alone and these numbers are still on the rise. It is an efficient auto insurance company with an excellent customer support team. Now when it comes to rates, this is the right company to place your bet on. They have the best rates and lots of discounts to help you save more money.
At the moment, PROGRESSIVE sells its auto insurance packages to U.S citizens. Furthermore, they serve over 10 million policyholders and this number can only keep growing. In 2009, PROGRESSIVE stretched their arm to serve needy clients in Australia. Unlike GEICO, PROGRESSIVE will allow their customers to purchase auto insurance through local agents and, therefore, this offers you, the customer, more flexibility. At the time of writing this article late 2014, you can find their service centers in over 25 States and these include Arizona, California, Florida, New York and many others.
Allstate Auto Insurance
Next, we have ALLSTATE Insurance Company. It is among the most popular auto insurance companies in the Unites States. What has made them popular is their accident forgiveness program. This has attracted many customers, especially new drivers, who are more likely to be involved in minor accidents. Insurance experts at ALLSTATE advise you to combine different policies into one, this can save you almost 30%.
AARP Auto Insurance
For drivers who are above 50 years old, this is the best auto insurance company for you. Not only do they offer low rates, but they have been in the industry for a very long time and have learnt more than a thing or two. They have good premium rates and good discounts. One of their notable bonuses include a new car replacement which will replace your new car just in case it gets “totaled” within the first fifteen (15) months of ownership. When you purchase their auto insurance, this is what you get:
- You will not get a premium increase on your first accident.
- You will get a new car if you are involved in an accident in the first fifteen (15) months or 15,000 miles of purchase and your car gets “totalled”.
- All insurance rates are locked for 1 year.
Top 10 Car Insurance Companies provides more ratings and details of the top car insurance companies in America.
If you are a young driver, please also read our article on Who Has The Cheapest Car Insurance for Teenagers.
Why Is Car Insurance Cheaper In Some States Than It Is In Others?
Car insurance rates are mostly based on the insured’s driving history, personal credit history, miles driven, gender and the make and model of the car being insured. However, these are not the only factors that influence insurance rates. Some of the other factors that contribute to the various States having different insurance rates are political. Plus, each State’s insurance regulations, competition in the State among other insurance competitors. Weather in a given State is also another factor.
If you live in a climate that produces severe weather on a regular basis, this could cause more car accidents. Thus, the insurance price, will have a percentage of rate built in for that. Also, States keep statistics on everything. They are aware on how many drivers in their States have auto insurance and have a good idea of the number of drivers who do not have insurance at all. The States with a high number of drivers with no insurance will force the insurance companies to incorporate a charge inside the rate for that as well. The average income level of a State plays a factor too.
Insurance companies want a bunch of insurance products that everyone in their target area can actually afford. States that have a low crime rate with a low amount of grand auto theft plays a role in how an insurance company will go about deciding what they should charge in a given State for insurance. As you can see, they are many factors an insurance company must go through when deciding what rates they end up charging customers in a given State to still be able to make a profit.
You can read more on the average insurance rates for each State by clicking here.
Can I Contest The Rates My Insurance Company Charges Me?
There are no laws that say that an insured cannot contest the rates that they have just received from their insurance carrier. However, you need to be aware or focused on the best items to contest in order to have a higher success rate of getting a rate overturned in your favor.
As you’ve read the section above titled “Why is car insurance cheaper in some states than it is in others?,” you now know that there are many factors other than your driving record that determines what an insurance provider will charge you. Insurance companies use “actuaries” to add all the above factors up and come up with an algorithm they can use to come up with a fair premium they can charge their customers. When the insurance company comes up with these ratings, these cannot be contested as they serve as the insurance companies’ standard rates. However, the insurance company can change these rates. In fact, they actually do it every day to a certain extent. But, an insured will lose this battle if they ask their insurance company to change the company’s standard rate.
What an insured would have a much better chance of winning a battle is if their driving history has changed, or there were errors on the initial application that was not caught until renewal time. With the driving history, if the insured had a terrible driving record five years ago, but since has matured, and all the moving violations have dropped from their record, they have a case. They could call their insurance company and ask them to re-rate them. Getting re-rated could put them in a more favorable classification, thus, lowering the overal premium.
On the errors on the initial application, let’s say that you somehow had down on the application that you had a 500 credit history score, when you actually had a 750. You can contest this when you figure this error out and ask the insurance company to re-rate you. This could make your rates go down and save you money too.
Now you should have sufficient information to find the cheapest auto insurance company that suits your budget.