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When you’re buying auto insurance, it’s important to shop around for the best deal and make sure you don’t ignore the lesser-known insurers. Check out these helpful tips on how to get the cheapest car insurance.
1. Avoid Assuming Any One Insurer is the Cheapest
Some insurance companies invest heavily in commercials to convince you that they provide the most affordable auto insurance. However, no single company offers the lowest premiums for everybody. The insurer that’s the cheapest for drivers in one location may be the costliest option for people living in another state. Comparing auto insurance rates is the only way to make sure you’re getting the cheapest possible rate.
2. Don’t Overlook Local and Regional Insurers
Just four insurance companies control over half of the auto insurance business in the United States, including Allstate, Progressive, GEICO, and State Farm. Nonetheless, regional insurance providers such as Erie Insurance and Auto-Owners Insurance often get better customer satisfaction ratings than the leading insurers, and they may also offer lower car insurance premiums.
3. Ask About Discounts
Insurance companies provide discounts to customers who are willing to do the following:
- Insure multiple vehicles with a single policy.
- Bundle auto insurance with other types of insurance, such as homeowners or life insurance.
- Agree to receive documents online.
- Maintain a good driving record.
- Own a vehicle with safety and anti-theft features.
- Pay their six-month or annual premium at once.
- Become members of a certain professional organization or affiliate group.
Still, you shouldn’t just focus only on getting auto insurance discounts. Make a point to compare rates and discounts from multiple insurance providers.
4. Improve Your Credit Score
In most states, your credit score is one of the most important factors determining the auto insurance quotes you’ll receive. However, insurance companies in Michigan, Massachusetts, California, or Hawaii aren’t allowed to take credit into account when setting insurance rates. According to insurance companies, the credit scores of customers have been shown to be correlated with their likelihood of filing claims.
5. Don’t Get Comprehensive and Collision Coverage for an Old Vehicle
Comprehensive auto insurance coverage reimburses you for the cost of repairing your vehicle if it’s damaged as a result of bad weather, a fire, an animal crash, vandalism, or any other non-collision event. It also protects you against vehicle theft. Collision coverage, on the other hand, covers the repairs you need after your car is damaged in a collision with another vehicle or an object such as a street light pole or fence.
However, in the event of a total loss or theft, both comprehensive coverage and collision coverage have a limited maximum payout that varies according to the value of your vehicle. If you own an older car with a low market value, you may find that it isn’t worthwhile to invest in these types of insurance.
6. Increase Your Deductible
If you decide to purchase comprehensive coverage and collision coverage, you can reduce your premiums by choosing higher deductibles. There isn’t any deductible on auto liability insurance, which covers the damage you cause to other parties in an accident that’s your fault.
7. Consider Usage-Based Insurance
If you’re a good driver who doesn’t drive often, it may be a good idea to buy usage-based or pay-per-mile coverage such as Progressive’s Snapshot or Allstate’s Drivewise. If you participate in such a program, you’ll have to allow your insurer to monitor your driving to determine if you qualify for discounts. The discounts are given based on how many miles you drive, how well you drive, and when your drive.
8. Check Insurance Costs Before Buying a Car
When you’re shopping for a vehicle, you probably already take into consideration factors such as fuel economy and repair costs. Nonetheless, you should also find out how much you need to spend on car insurance. Generally, an insurance company will consider several things when calculating your premiums, including:
- City or state.
- Type of vehicle you drive.
- Driving record.
- Credit score.
- Frequency of car usage.
- Place where you park your vehicle, such as in a garage or along the street.
If you’re an older driver who has a clean driving record and a garage for storing your vehicle, you’ll have an easier time securing a low auto insurance rate.
9. Review Your Car Insurance Policy Every Six Months
With so much competition in the auto insurance market, insurers often change their rates to stay abreast of growing demand and changing business needs. Usually, when you become comfortable with a particular insurance company, you’ll see your rate increase slowly, while other providers may offer you a better deal. Your insurer tends to get away with the hike because you probably won’t even notice it. Therefore, it’s a good idea to shop around when it’s time to renew your policy so that you can make sure you’ll get the cheapest possible auto insurance.
10. Use Price Comparison Websites
One of the most effective ways to ensure you’re getting the lowest premiums is to compare auto insurance rates. Websites such as Compare.com enable you to review car insurance plans from both big-name brands and smaller insurers in your area so that you’ll know which company offers the best deal.
11. Improve Your Driving Habits
Honestly, the best tip on how to get the cheapest car insurance has nothing to do with taking advantage of loopholes. It only requires you to adopt safe driving habits. If you’re able to reduce the number of accidents on your record, any insurance provider will be happy to lower your premiums.
Additionally, many insurance companies are starting to use telematics devices that can be placed in your car to monitor your driving. If such a device finds that you’re a safe driver, it’ll transmit the information to your insurer to help you get a lower rate.
12. Play the Competition
Currently, there are auto insurance providers everywhere, many of which are making billions of dollars from their widespread policies. If you know how to use this competition to your advantage, you may be able to get a lower rate for your car insurance. You can try to get a discount from your current insurer by letting them know that another insurer is offering you a better deal.
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