How to Find Car Insurance Rates

Find car insurance rates by knowing what you can afford, knowing what you need, understanding payment options, and being honest about your driving history. Use the free tool below to compare rates.

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Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State...

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses...

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Reviewed byJoel Ohman
Founder, CFP®https://res.cloudinary.com/quotellc/image/upload/insurance-site-images/ciccom-live/41b5e36b-joel-ohman.jpg

UPDATED: Jun 12, 2020

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Here's what you need to keep in mind...

  • Know what you can afford
  • Know what coverage you need
  • Understand your payment options
  • Be honest about your driving record
  • You have rights as a consumer

Are you looking for a brand-new car insurance policy or planning to renew an existing one? If so, you have many options in terms of how and where you get quotes, the types of coverage available, and the companies you can purchase from.

To help you in this process here are a few tips that can help you find affordable car insurance rates.

Entering your ZIP code into our FREE search tool on this page is the first step in finding cheap car insurance rates online!

As you read the tips below, keep in mind that car insurance is an ever-changing industry. Rates rise and fall on a number of factors including economic conditions, the number of total vehicles on the road, and nationwide accident rates.

That’s why it’s a good idea to review your insurance policy and gather new quotes every year or two.

Tip #1 – Know What You Can Afford

When purchasing a new vehicle, it’s important to consider what’s known as the total cost of ownership.

The total cost of ownership includes all of the money you’ll spend over the lifetime of a vehicle including the purchase price, the cost of insurance, gasoline, routine maintenance, and major repairs.

According to Consumer Reports, the average consumer spends nearly 10% of that total cost of ownership on insurance.

To put it simply, if you have a purchase price of $18,000 resulting in a monthly payment of $250, how much would you pay for insurance? If you purchase an annual policy at a cost of $1,200 that equates to $100 monthly.

Even without gas and maintenance, you’re already up to a monthly payment of $350.

If your budget can handle that amount without strain, you know before beginning your car insurance search that you can afford a policy of up to $1,200 annually. If that number is too high for your budget, you need to figure out what is more reasonable.

You may have to adjust the price of your insurance policy, the purchase price of the vehicle, or both.

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Tip #2 – Know What You Need

What you’re required to purchase will depend on the laws in your state.

For example, Delaware requires all vehicles registered in that state carry a minimum amount of liability insurance expressed as 15/30/10. These numbers represent thousands of dollars of coverage to pay for injuries, deaths, and property damage.

Knowing what your state requires by law gives you a starting point for determining the type of insurance policy you’re going to purchase.

For a car with a clean title and a low resale value, a liability policy may be all you need. You might even consider a liability policy with slightly higher limits just in case you ever are sued after an accident.

For vehicles with active liens (i.e., outstanding bank loans), your lender is most likely going to require you to include both collision and comprehensive insurance. Your base policy can be no less than that coverage plus liability. From there you can add additional coverage as needed.

Tip #3 – Understand Payment Options

auto insurance - pay-as-you-go

Most of the major car insurance companies offer several different payment plans including:

  • Lump-sum payment
  • Quarterly installments
  • Monthly installments

If your budget reveals you can’t afford to pay for your entire policy in one lump sum, you can automatically cross companies off your list that don’t offer quarterly or monthly installments. There aren’t many of them, but they do exist.

In addition, some companies charge higher service fees than others for the privilege of paying quarterly or monthly.

If your budget is such that you don’t have a lot of wiggle room, the amount of these service fees may play a part in what quotes will be acceptable to you. Knowing the payment options of various insurance companies could be an important deciding factor.

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Tip #4 – Be Honest about Your Driving History

As the Montana Commissioner of Securities and Insurance clearly explains, your driving history over the last three years directly influences how much you’ll pay for car insurance.

Any insurance company you deal with is going to order a driving report from any state you’ve ever been licensed in to find out about accidents, tickets, and license or registration suspensions.

The reason they do this is because statistics prove individuals with higher rates of violations and suspensions are more likely to be involved in serious accidents.

It benefits drivers to be upfront and honest during an initial quote interview.

Dishonesty will certainly be found out when your driving history is reviewed; it may also be a reason for an insurance company to charge higher rates.

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Know Your Rights as a Consumer

In addition to the four tips listed above, you should consider a few other things in your search for affordable car insurance rates. One of those things is knowing your rights as a consumer. Almost every state has laws in place to protect drivers from unfair business practices among insurance companies.

For example, laws in the state of Virginia prohibit insurance companies from denying you coverage based solely on the fact that another company denied you coverage or you previously had insurance through a high-risk pool.

They may also not discriminate against any driver based on race, sex, or employment.

It’s important to know that many states have assembled a list of consumer rights into something known as the insurance bill of rights. You may find the information in your state under a different title.

Either way, a quick visit to your state insurance department or department of motor vehicles website should help you find a list of your rights fairly easily.

When you know your rights as a consumer, you are better able to deal with car insurance companies. Furthermore, insurance companies will know they can’t get away with anything if you demonstrate a knowledge of the law.

The more you know the more likely you are to get a good policy at a great price.

Choosing Your Insurance Company

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Finding great car insurance turns out to be more than just a comparison between policies and rates. While those two things are important, you also need to look at overall customer service, claims service, and insurance company stability.

In terms of overall customer service, you will get a good idea of how a company operates merely by instigating the quote process.

A company with good customer service will offer multiple options for receiving quotes, knowledgeable and friendly agents answering the phones, and a willingness to spend as much time with you as you require.

A company that does not offer at least a basic amount of customer service is not worth dealing with.

When it comes to claims service, this is one of the areas that separates the men from the boys, so to speak. Think of it this way; the entire purpose of purchasing car insurance is to protect you against financial loss in the event of a claim.

It doesn’t do you any good to have the best policy possible if your insurance company’s claims service leaves you high and dry after an accident.

As an extension of claims service, you should also be concerned about the financial stability of your car insurance company. There are several financial rating services that analyze and grade insurance companies based on their current financial condition and their prospects for the future.

It’s never a good idea to purchase your car insurance from a company at risk, as this could put your claims at risk should you have an accident in the future.

Compare, Compare, Compare

When all is said and done, the word compare might be the most important thing to remember. It is understood that there are dozens of national and regional insurance companies all competing for your business.

There’s no way to know that you’re getting the best policy for the best price unless you’re willing to compare one with another.

In order to compare you have to take the time to assemble quotes and ask questions. Quotes can be assembled through an online search site, by contacting a local agent, or by directly contacting individual insurance companies.

In any case, you should start with a comparison of a minimum of three quotes.

Remember to check liability amounts, whether a policy includes collision and comprehensive, and what your payment options are. Also, look for deductible amounts; higher deductibles generally mean lower annual premiums.

When you do finally choose a company and policy remember that you’re not locked into it for the rest of your life.

You can get new quotes at every renewal just to make sure you’re getting the best price. If you’re a skilled negotiator, you can use those quotes to encourage your current car insurance company to give you a better deal.

Click here to start your search for car insurance rates by taking advantage of our FREE search tool. Just enter your ZIP code below!

References:

  1. http://www.consumerreports.org/cro/cars/car-prices/what-that-car-really-costs-to-own-4-08/overview/what-that-car-really-costs-to-own-ov.htm
  2. http://www.dmv.de.gov/services/vehicle_services/faqs/ve_faqs_insurance.shtml
  3. http://csi.mt.gov/insurance/auto_faqs.asp
  4. http://www.scc.virginia.gov/boi/cons/auto_rts.aspx
  5. http://www.ambest.com/home/default.aspx

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