Some people view auto insurance as an unwelcome expense; however, it has an important purpose. Insurance can protect you from financial losses if you cause an accident, have your vehicle stolen, are in a natural disaster, and more. Learning how to find the best car insurance can help you better understand why you need coverage and how to save money.
Types of Available Car Insurance Coverage
Most insurance companies offer the same types of coverage. Options can vary by location because some states have no-fault laws in place, whereas other states require you to carry third-party liability coverage. Bodily injury and property damage liability pays for injuries and damage to other parties when you are at fault in an accident. Other types of coverage you’ll find on most auto insurance policies:
- Collision: Collision coverage pays for any accident-related damage to your own vehicle, no matter who is at fault.
- Comprehensive: Comprehensive coverage will cover non-accident-related damage to your vehicle, such as weather damage, vandalism, theft, contact with an animal, etc.
- Personal injury protection (PIP) and medical payments (MedPay): PIP and MedPay are similar but offer different coverages. Both will pay for medical expenses for you and other occupants of your vehicle regardless of fault.
- Uninsured motorist (UM) and underinsured motorist (UIM) coverage: UM pays for your damages when an uninsured driver hits you, and UIM pays for your damages when the at-fault driver’s policy limits weren’t high enough.
- Guaranteed asset protection (GAP): As its name suggests, GAP coverage will cover the gap between what you owe on your vehicle and the current value if you get into an accident and the vehicle is totaled.
Many drivers opt to purchase only the minimum required amount of coverage required by their states to keep their premiums affordable. However, you need to verify what’s included in the policy before choosing what coverage you need and what you can leave off.
Best Ways to Find Cheap Car Insurance
According to Credit Karma, you can use a number of methods to find cheap car insurance. Here are some ways you can save.
- Compare quotes using an auto insurance comparison tool. You want to shop around to get the best competitive rates. Look at the big companies, but also consider the smaller ones you haven’t heard of, because you don’t know where the best deals are.
- Learn what factors affect your insurance premiums, as they impact the quotes you get. Premiums are not solely based on your driving record. Most states use your credit history as a determining factor, for example.
- Look at how much liability coverage you are purchasing. Every state has its required minimums, but you can add higher coverage amounts if you want.
- Consider raising your deductible, which will lower your monthly premium amount. Choose a deductible that you can afford. Don’t pick a high one that could cause financial hardship when you need to present a claim.
- Consider skipping collision and comprehensive on older vehicles. These coverages are usually optional unless you have a new car and your lease company or finance company requires it. Collision will cover damage to your vehicle if you’re in a single-car accident or your car is hit by an object. Comprehensive covers non-collision related damage, such as natural disasters, theft, vandalism, contact with an animal, etc.
- Look for applicable discounts, such as good driver, student, multi-car, etc. Some insurers have a wide range of available discounts.
- Look at third-party ratings and reviews. Remember that cheapest isn’t always best. You should look at online reviews and ratings. What good is a cheap premium if the customer service and coverage are terrible?
Best Car Insurance Discounts
Knowing what potential discounts are available can help you compare options. Depending on the insurance provider, potential discounts can go to drivers such as the following:
- Veterans or other military members
- Full-time students with good academic records
- Drivers who have multiple policies with the same company, such as homeowners insurance and auto insurance
- Policyholders who have automatic payments or pay their premium in one payment
- Good drivers
- Drivers whose cars have certain safety features or who have taken defensive driving courses
- Retired or active federal employees
- Policyholders who have more than one car insured
Some states allow insurers to look at your credit history to determine a premium amount. Drivers can save hundreds of dollars a year if they have good credit scores. According to the balance, insurance companies have done extensive studies that show a correlation between higher claim activity and lower credit scores. Some companies reward good credit with financial stability discounts.
Be sure to check your policy to verify all applicable discounts are listed. Get into the habit of reviewing your insurance once a year and inquiring if there are any new discounts that you might be eligible for.
Choosing the Best Car Insurance Company
Comparing insurance quotes, and the companies offering them, is one of the cheapest ways to get car insurance. Not all insurance policies are alike. Every company typically has something unique it offers to customers. Websites such as Investopedia and Nerd Wallet have comprehensive guides on selecting the best car insurance company. Examples of companies featured include:
- Geico. If you’re looking for impressive discounts, stellar customer services, and low premiums, Geico should be one of your top choices.
- State Farm. Aside from being a national name for insurance, State Farm has employees all across the country and local agents who can answer questions rather than transferring you to an outsourced person.
- Progressive. Progressive is a good choice for higher-risk drivers, as the company can help drivers get affordable insurance without the higher premiums you would expect elsewhere due to a less-than-perfect driving record.
Before you purchase car insurance, make a thorough comparison involving each site. According to Insurify, your rates for a policy can vary considerably when checking with different insurance companies, even if each policy provides the same coverage. As a consumer, you should consider shopping around with four or five different insurance companies to ensure you’re getting the best deal possible.
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