How to Compare Car Insurance Rates: 7 Helpful Tips

To compare car insurance rates you should know your vehicle, check minimum requirements for your state, find trustworthy insurance dealers, compare every plan, and more. Use our free tool below to compare car insurance rates.

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A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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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. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Jan 20, 2021

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It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident car insurance decisions. Comparison shopping should be easy. We are not affiliated with any one car insurance company and cannot guarantee quotes from any single company.

Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from top car companies please enter your ZIP code above to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

Here's what you need to know...

  • Comparing insurance rates helps you keep the cost down year after year
  • Your location can have a major impact on premium costs
  • Call insurance companies directly to ask specific questions about their offers
  • Never hesitate to turn a company down if they don’t have exactly what you’re looking for

There are 7 ways to compare car insurance prices that will really help you keep your overall costs low.

Before you settle on the rate your agent gives you, make sure you have taken the time to perform the proper research. This will ensure that you are not overpaying or missing out on a great deal.

Enter your zip code into the FREE tool above for great car insurance rates from multiple companies!

With so many different auto insurance companies offering countless options, discounts, and rates, it can be quite overwhelming. Many consumers do not put forth enough effort and, unfortunately, end up spending far more on their annual premiums than necessary.

These simple steps are your best defense and your greatest resource.

1) Get to Know Your Vehicle

According to J.D. Power, there are several factors that affect car insurance rates. Knowing how your vehicle rates in certain areas, like safety, can help you choose the most comparable price.

For example, if your vehicle has several standard safety features, you can shop around with confidence because the car insurance companies want owners who have cars that can withstand a collision without causing too much damage.

This saves them money when the time comes for repairs.

Alternatively, vehicles that offer the majority of their safety features as options may limit your ability to haggle for a lower premium. This is because most consumers may not elect the extra safety features if they increase the total cost of the car.

If possible, research the manufacturers who consistently design their vehicles with the highest level of safety in mind.

These are the ones who may provide you with the best return on your investment; both in keeping your insurance premiums and your monthly payments to the finance company low.

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2) Get to Know Your Area

When comparing car insurance prices, as in this chart, you must also understand where you live plays a huge role.

There are many different resources online that will provide you with the states that have the highest and lowest prices on car insurance.

Take the Rocky Mountain Insurance Information Association, for example. While the name suggests this site only assists consumers in a specific area, they actually have quite a bit of data on a national level.

Unfortunately, most people cannot simply move from their homes and relocate to another state based on low insurance premiums.

For this reason, it is vitally important that you find your state on the list and have prior knowledge of the amounts you and your neighbors will be expected to pay.

3) Check the Minimum Requirements for Your State

It is extremely important when comparing car insurance prices that you have a clear understanding of the laws of your state.

Each differs with regard to the minimum amount you must have.

The National Association of Insurance Commissioners advises that all states must require a minimum of bodily injury liability as well as property damage liability.

This coverage protects you and anyone listed on your car insurance policy against damage or injury caused during a motor vehicle collision. Other states require more coverage, like comprehensive and collision, especially if your car is financed.

If you purchase your vehicle outright without any monthly payments, you may not need this extra coverage.

Another type of coverage is uninsured and underinsured motorist coverage. Unfortunately, more states are making this level of insurance mandatory because there are so many drivers on the road that do not have car insurance at all.

If you are involved in an accident and the driver does not have an active auto insurance policy, or only has the minimum amount, having this type of coverage ensures you will be protected.

4) Gather at Least Three to Five Reputable Insurance Dealers

Everyone knows the best way to compare car insurance prices is to shop around. However, many do not know where to begin.

You should start by asking your family members and closest friends who they use for an auto insurance provider and why.

They will be the most open and since they care about you, they will most likely paint a very clear and precise picture for you of the customer satisfaction level of the provider they have chosen.

Never trust an advertisement from television or radio because they are paid to convince you to purchase their product. Once you have a few choices to consider, make sure you check to see how they stack up against each other.

You should go to the Better Business Bureau (BBB) to find out how they treat their customers.

All car insurance companies that are members of the BBB have their information listed for public review; they want you to know how they rate. Customer service should be a major factor when comparing car insurance prices.

In addition, since you are paying for their service, it is imperative that they have a respectable response time to their customers and handle complaints promptly and thoroughly.

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5) Make Sure to Compare Every Plan

While you are researching the car insurance companies, you need to verify each policy matches the quotes.

For instance, if you receive a quote from one car insurance company for an annual premium of $1000 per year and another offers you a quote for $1200, make sure you compare the plans to see where the difference lies.

$200 extra per year may not seem like a lot to some people, but why would you pay more for the exact same coverage? There may be a specific reason for the increase.

This is another reason why it is so important to find an insurer that has a positive reputation and has been in the business for some time.

Newer car insurance companies may offer rock-bottom prices, but to what end? If their customer service is lacking or they place limits in certain areas, you really are not getting a great deal. Your focus needs to be on obtaining a great value.

A more established insurance company may need to charge you extra because it will provide you with world-class customer service, 24-hour road assistance, and more.

Additionally, you may have the option of working directly with an agent who is located in your community. Often, it is easier to speak with someone face-to-face, rather than conveying your messages via telephone or email.

6) Verify the Financial Stability of the Company

Certain sites like A.M. Best allow you to access car insurance companies’ public financial records.

Since the financial meltdown in 2008, many companies have felt the sting of major losses and you need an auto insurance provider that is strong and growing.

Signs of structural changes or downsizing of certain departments can be detrimental to you as a consumer, especially if or when you need to file a claim. If the company you are researching has a rating less than an A or B, you might want to consider looking elsewhere.

Your car insurance prices may not remain stable over the long haul and after a while, you may see an increase in your annual premium.

This is true even if you are a safe driver and obey all of the rules of the road. While most consumers begin to see a drop in their insurance prices over time, you may see the opposite.

7) Contact the Insurance Companies Directly

Never be afraid to speak directly with a representative on your list and tell them you are shopping around.

The car insurance industry is extremely competitive and they want your business.

After you have completed all of your necessary research, write out a script that includes a checklist of questions you want to ask.

This will keep you focused and stop you from straying off subject.

If you start with your current car insurance provider, explain to them why you are looking for someone new to do business with. Chances are they have a retention department and will send you over to the experts.

The retention department has one sole purpose, to keep you as a customer.

Be careful when speaking with these representatives; they can be very persuasive. They may begin by asking you how they failed you and what they can do to regain your loyalty.

Refer to your script and checklist. If they cannot meet your demands, thank them for their service and move on. You must be very shrewd in your conversation, but never disrespectful.

Remember, it is best to end your call on a positive note. You should never close a door to a future opportunity.

Once you finish your first call, your confidence should begin to grow.

Make sure you take excellent notes and do not be afraid to ask in-depth questions until you have a satisfactory answer. If a representative is unable to give you what you want, it is completely within your right to escalate the call to a supervisor or manager.

If you want great car insurance rates from several companies today, use our FREE zip code tool below!

Free Car Insurance Comparison

Enter your ZIP code below to view companies that have cheap car insurance rates.

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