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The cheapest auto insurance

auto insurance

The cheapest auto insurance

If you want the cheapest car insurance, you can choose to have the minimum insurance coverage required by law. If you are renting or financing your car, the leasing company or lender may require you to have certain types of coverage. However, aside from these minimums, the amount of insurance coverage you get is up to you, and it's tempting to save on monthly fees by exceeding insurance coverage.

However, before you go for the lowest amount of auto insurance you can get away from, know that choosing lower insurance coverage may not save you much. According to our data, drivers with low premiums had a study rate of $ 1,341 a year. The medium covered profiles had a study average of $ 1,416, and the high profiles had study rates of $ 1,491. Based on these data, providing low coverage instead of high coverage saves just $ 150 a year on average.

In our study, Nationwide and American Family received the lowest increases in study rates going from low coverage to high coverage, with representative premium increases of only $ 31 and $ 84, respectively. On the other hand, Progressive, Allstate and Farmers have increased their study fees by more than $ 200 to switch from low coverage to high coverage. However, $ 200 year-round is only around $ 16 a month.

Saving around $ 150 a year is not something to sneeze at, especially if your budget is tight. However, with the potential costs of a car accident, this savings may cost you in the short term greatly if you are in an accident. Suppose, for example, that you get a low coverage policy that only offers $ 15,000 to cover medical costs, and you are mistaken for an accident that injures someone and generates $ 30,000 in medical bills. Once your insurance pays $ 15,000, you can sue her for the rest of the money. This can lead to the loss of assets, such as your home or savings. When choosing insurance coverage, think about the assets you want to protect in the event of an accident, not just your monthly installments.

Most major insurance companies offer auto insurance coverage at three general levels: low, medium, and high (even if they don't necessarily advertise it this way). We created identical profiles in our study to represent drivers, then discovered how rates changed with all three levels of coverage. Profiles are established for a clean driving record, good credit score, and 12,000 miles of annual driving. We use men and women between the ages of 25, 35 and 60. 2015 Honda Civic, 2015 Toyota RAV4 and 2015 Ford F-150 are the vehicles used in our analysis.

Why does auto insurance cost so much?

Auto insurance costs a lot because car accidents cost a lot. The National Highway Traffic Safety Administration reported that in 2010, the last year with available data, car accidents in the United States caused the economy $ 242 billion in lost productivity, health care costs, emergency services, legal costs and property damage. A large part of these costs are paid by insurance companies. To stay on the job, insurance companies need to get more premiums than they pay for claims. This is how car insurance works.

Auto insurance companies set their rates based on a number of factors that primarily summarize the probability that you will file a claim. The ideal customer for an auto insurance company is an experienced and confident driver who lives in an area with little congestion, crime, or the risk of natural disasters, who drives a cheap car to repair it, and who doesn't drive that far. This customer is likely to pay premiums for years without an expensive claim, and the insurance company will make a profit.

Since where you live can affect the risk of an accident, it's one of the things that auto insurance companies take into account when calculating their rates. If you live in an area with a lot of crime and traffic, you can expect to pay more for insurance. Different states also have different auto insurance requirements, which can increase costs. See your state's cheapest auto insurance guide for more information.

No matter where you live, who you are influences your auto insurance rates. Teens and drivers who have DUI or other accidents and traffic violations pay more for auto insurance than safer and more experienced drivers. This is simply because lack of experience and a desire to engage in unsafe behavior behind the wheel are great red flags for insurance companies and indicate that you are at great risk of an accident.

The type of coverage you choose also affects the cost of car insurance. Low coverage insurance is the cheapest, but it may not provide the coverage you need after an accident. For example, the law rarely requires collision auto insurance and comprehensive auto insurance, so you can save some money on premiums by skipping them. However, if you do fall into an accident, this means that you will not be covered for damage to your car. If your rental company or lender doesn't require GAP insurance, you can skip it, but if your car is packaged and owes you more than its value, you'll have to find the difference to pay off your loan.

How to save money on auto insurance

You may not be able to switch from a 25-year-old driver to a 60-year-old driver (not immediately, anyway), and you can't get married suddenly (unless you find a willing partner) to save money on car insurance. Perhaps you also can't go from the Boston suburbs to Iowa just to save money on your auto insurance premiums. However, you can take some steps to save on auto insurance and get the cheapest auto insurance possible.

Getting discounts on auto insurance can lower your auto insurance premiums. Common auto insurance discounts include good student discounts for teen drivers and college students, multiple policy bundling discounts, paper billing discounts, and good driver discounts. Learn more about auto insurance discounts to save on your auto insurance premiums.

Improving your driving record can save you a great deal on auto insurance. Take steps to be a safe driver. Observe speed limits and always leave an adequate distance. Never drive while driving under the influence of any substance, and do not drive a vehicle by any means of distraction, especially your phone.

Fixing your balance will save more than just providing interest rates, it can save you when it comes to insurance premiums for your car. Take steps to improve your balance, such as refinancing your car loan, paying all other debt payments on time, and paying off other debts. As your credit score increases, call your insurance company or buy and compare rates to start seeing savings.

The most important thing you can do to provide auto insurance is to shop. Get and compare auto insurance rates. As you can see from the cheapest car insurance rankings, there is a big difference in what different companies impose. By getting multiple auto insurance quotes, you will see the company that can save you the most money.