One clear way to avoid overpaying for car insurance is to research car insurance rates online. It’s convenient and fast, and if you do it right you could save hundreds of dollars on your auto insurance policy rates.
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The first thing to do is basic research on how car insurance policies actually work and what factors affect rates. It’s also helpful to know the basic minimum for your state and the severity of the penalty if you’re caught driving without insurance, and quite sobering facts those are, we assure you: http://public.findlaw.com/traffic-ticket-violation-law/traffic-ticket-a-z/driving-without-insurance-laws.html.
The second thing to do is figure out what discounts are available and how best to use them. The third thing to do is to go online, with the previous information still in your head, and compare car insurance rates between different companies. There are more than several hundred insurance companies online, so there are plenty of options. Start with at least three auto insurance companies online when you’re comparing quotes.
What’s a good research guide for learning about car insurance policies?
The official watchdogs for the auto insurance industry, and all insurance companies, are the statewide insurance commissions. While they all offer good advice on saving money on your auto insurance rates, by far the most complete advice you’ll get on auto policy comes from the state of Colorado, where they published a whole a booklet of advice that you can save as a PDF. That booklet is called the “Consumer’s Guide to Auto Insurance.”
This book is a great starting point. It does a very good job of defining insurance terms (like liability and underwriting), and going over the factors that affect your insurance rates. It also discusses various discounts that you might be eligible for as a consumer. The guide points out that it even prints out insurance rates online so that you can compare for yourself.
Read the guide carefully because the reality is that, to avoid overpayment on car insurance policies, you need to understand the basics of auto insurance.
Is the insurance standard the same for every state?
Keep in mind insurance minimums vary from state to state just as penalties do. Every state except one (New Hampshire) has to meet insurance minimums. You should know the minimums because that affects the price of your auto insurance policy. For example, if you buy according to North Carolina’s minimum, when you in fact live in California, you’ll be paying too much for your car insurance policy (recommendations from some injury attorneys not withstanding: http://www.edgarsnyder.com/car-accident/auto-insurance/recommendations.html). This is because North Carolina’s minimum insurance is 30/60/25 (the first and second numbers refer to bodily injury liability limits and the third number refers to property damage), while California’s state minimum is 15/30/5.
Will discounts lower my car insurance rates?
The biggest and best reason to research rates online is to figure out the many discounts for which you might be eligible. These are the factors, more than anything else, that will lower your auto insurance premium substantially, up to $1000 per year if you do it right.
The most readable version of how to save money (http://www.insurance.ca.gov/0400-news/0100-press-releases/2011/release104-11.cfm) comes from California Department of Insurance Commissioner Dave Jones. To paraphrase, we’re all aware that the economy these days is not a great one and most everybody’s budget is tight. You should always make sure that the car insurance policy you research and purchase fits your needs and your budget.
The commissioner offers a number of remedies for not overpaying on your car insurance rates. These include passing on comprehensive insurance for a used car and using online comparison tools to save money on your policy. You might benefit from having a higher deductible that lowers your premium. Make sure that you can afford the out-of-pocket costs, however.
There are also many discounts you can ask about for your policy. For instance, you could get a discount if you drive fewer miles (to work and back only), are married, and older than 25. There are discounts too if you insure more than one vehicle or more than one kind of insurance policy (car plus home or rental insurance for example) with the same company. Some insurers will give you a discount if you take a defensive driving course.
So, bottom line, learn as much as you can about auto insurance before purchasing your car insurance policy. If you do this, then you can save yourself a substantial amount of money and certainly avoid overpayment on your policy.
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