Car Insurance Guide
Americans pay about $148 per month for full coverage and $55 for minimum insurance, but you need to know more than average rates to pick the right car insurance policy. With so many coverage options, figuring out how to choose car insurance is easiest when you use a car insurance guide.
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Licensed Insurance Agent
Daniel Walker graduated with a BS in Administrative Management in 2005 and has run his family’s insurance agency, FCI Agency, for over 15 years (BBB A+). He is licensed as an insurance agent to write property and casualty insurance, including home, life, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. To ensure our content is accura...
Licensed Insurance Agent
UPDATED: Feb 26, 2024
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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.
- Although car insurance is required in most states, it’s a good idea to protect yourself even if local laws don’t require it
- Insurance companies usually offer discounts to help drivers save
- Utilizing the tips in this car insurance guide will help you find the most affordable coverage
Why is this car insurance guide so valuable? Well, it’s a fact of life: you have to buy car insurance. You’re breaking the law if you’re driving without insurance, so the question is, how can you buy it for less?
It doesn’t matter if you’re looking for Lexus car insurance rates or just need a policy for your beater — we’ve compiled our 25 top tips to help you save as much as possible. These tips could even cut your current auto insurance payment in half!
Read through our ultimate auto insurance guide and then be sure to enter your zip code above to compare car insurance quotes from many of the best car insurance companies to see how much you might be able to save!
Car Insurance Guide for Saving Money
Follow these steps and save today.
Use Your Occupation to Your Advantage
Many jobs qualify for certain discounts. That’s because insurance companies may consider your line of work to be low risk for car accidents. Car insurance rates for engineers, for instance, are often less because they are considered low-risk. There are plenty of occupation discounts available from different companies.
Check with Professional Associations
Maybe you’re an AAA member. Maybe you belong to a small business association, or an alumni organization. Just like reserving a hotel room and discovering they have an AAA car insurance discount, you should check with any professional associations (as well as your insurance company) to see if you qualify for discounts.
Got good health insurance?
Then don’t worry about spending extra dollars for medical liability. While it’s not a bad idea to have medical liability, a good health insurance plan should cover you.
Take a Defensive Driving Course
You’ll get a defensive driver discount if you can prove you took a defensive driving or drivers training course. Insurance companies want you to drive defensively, not offensively.
Encourage Your Kids to Do Well in School
If your children get better than a B average, and they’re driving age, make sure to report their scholastic achievements to your insurance company. They will often reward teens with good grades with discounts on insurance.
Are you eligible for a low-mileage discount?
If you can prove you carpool or otherwise find a way to drive less than 7,500 miles in your car per year, you’ll likely spend less when your policy payment is due by earning a low-mileage discount.
Do you need roadside assistance?
This add-on to insurance can cost you more. If you’re not driving very far, or know someone willing to help you if you have a problem on the road, consider dropping roadside assistance.
When Buying a Car, Go Low Profile
Car insurance companies pay close attention to statistics related to car models. Not all cars are created equal. Some are more susceptible to being stolen. Some are safer than others. You can find out the best small car safety ratings here.
If you live in a city and can prove you garage your car, you may be eligible for a garaged car insurance reduction, since a garaged car is safer than one on the street. And think of the money you’ll save on parking tickets!
Buy Longer Policies
If you can, buy policies for a year instead of several months, as insurers prefer to have that chunk of money all at once. You may be able to negotiate better terms for even longer policies.
Pay Up Front
Similarly, instead of paying in installments, you will usually save by paying the premium for your policy all at once. Again, see if you can sweet-talk your agent into giving you even better rates for a one-time payment.
Maintain Good Credit
How do you even know if you have bad credit? Unfortunately, insurance companies check your credit when you apply for a policy. They want to make sure that you are financially responsible in addition to being a safe driver. It’s simple: better credit, lower rates with a good credit discount.
Sometimes it’s best not to skip around on insurance. Many companies offer car insurance loyalty rewards programs. Make sure that you stay with a company for several years; a loyal customer is considered a lower risk than a new customer.
Keep Your Policy Up to Date with Significant Life Changes
Did you recently get married? Have you moved? Did you change your name and move to Guam? Don’t forget to update these things for insurance purposes; it could save you some cash.
Maybe insuring all your cars with the same company is a no-brainer, but make sure you’re taking advantage of other insurance services they offer, to improve loyalty and achieve the lowest rate possible across the board. Consolidate!
Car Safety Features
Got air bags? What about side impact? Theft deterrent? There are discounts for safety features in car insurance. While some of these things may be afterthoughts to you, they are important for nervous insurers to calculate your policy price.
Drop Collision Insurance
If your car has reached junk status, or you’re looking for an excuse to get rid of it, consider dropping collision coverage.
Use Our Comparison Tool
Make sure you’re using our free car insurance comparison tool so you can see side by side what you’re getting for your money. Everyone’s coverage is different, so ensure you’re getting the best bang-up coverage for your buck.
Raise Your Deductible
Raising your car insurance deductible involves a bit of risk if you’re not a good driver because you’re going to spend more out of pocket in the case of an accident. But if you need to save some money right now, it might not be a bad idea.
Check Rates Before You Buy a New Car
Always make sure you get an insurance quote on several cars that you have an interest in purchasing. You may be surprised at the long-term cost of one car over another.
Become a Good Customer
Make sure that when you need insurance for your house, another car, or your prized comic book collection, to go through your current insurer. Overall, you’ll save money and gain good status with that company.
Shop Around Every Six to 12 Months and Before Your Policy Expires
Insurance companies usually know when your policy is going to expire, so if you’re in a hurry because your coverage is about to end, they’re going to jack up their rates, maybe by 15 percent. Be careful and plan ahead.
Ask for Discounts
It never hurts to try, so call your insurer up and see if there are any other car insurance discounts you might qualify for.
Use Your Credit Card
Auto insurance is a fixed cost. You should think about using a credit card that has multipurpose points rewards such as one from American Express. You’ll get thousands of points, built up over time. Plus, if you keep paying with credit, the points won’t expire until you do.
Read more: Credit Card Car Insurance Discounts
The insurance industry is a very competitive business, so make sure you are always willing to try new companies. Don’t be afraid to switch every once in a while; a new company just might save you money.
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Case Studies: Saving on Car Insurance
Case Study 1: Occupation Discount
John, a civil engineer, was looking for ways to save on his car insurance. He researched different insurance companies and found that many offer occupation discounts. John contacted his insurance provider and provided proof of his occupation as an engineer. As a result, he qualified for a discount and was able to lower his car insurance rates.
Case Study 2: Professional Association Discount
Samantha was a member of a professional association for teachers. When she was renewing her car insurance policy, she inquired with her insurance company about potential discounts for association members. Her insurer confirmed that they offer discounts for members of certain professional associations, including teachers.
Case Study 3: Defensive Driving Course Discount
Lisa wanted to lower her car insurance rates and decided to take a defensive driving course. After completing the course, she provided the certificate of completion to her insurance company. They recognized the defensive driving course and applied a discount to her policy. Lisa’s efforts to improve her driving skills paid off in the form of reduced car insurance costs.
Enter your zip code in now for a free car insurance quote comparison from many top car insurance companies!
Frequently Asked Questions
What is car insurance?
Car insurance is a type of insurance coverage that protects you financially in the event of a car accident or other damages to your vehicle. It provides coverage for bodily injury liability, property damage liability, medical payments, collision, comprehensive, and uninsured/underinsured motorist coverage.
Is car insurance mandatory?
Yes, in most countries and states, car insurance is mandatory. It is a legal requirement to have at least a minimum amount of car insurance coverage to drive on public roads.
What types of car insurance coverage are available?
The common types of car insurance coverage include:
- Liability coverage: Covers bodily injury and property damage to others in an accident you are responsible for.
- Collision coverage: Pays for damages to your own vehicle in case of a collision with another vehicle or object.
- Comprehensive coverage: Provides coverage for non-collision incidents such as theft, vandalism, natural disasters, or animal collisions.
- Medical payments coverage: Covers medical expenses for you and your passengers regardless of who is at fault.
- Uninsured/underinsured motorist coverage: Protects you if you’re involved in an accident with a driver who has no insurance or insufficient coverage.
How are car insurance premiums calculated?
Car insurance premiums are calculated based on various factors, including your age, driving record, location, type of vehicle, coverage options, and deductibles. Insurance companies use statistical models to assess the risk associated with insuring you and determine the premium accordingly.
What is a deductible?
A deductible is the amount you agree to pay out of pocket before your insurance coverage kicks in. For example, if you have a $500 deductible and your claim is for $2,000, you will pay $500, and the insurance company will cover the remaining $1,500.
What are the advantages of having car insurance?
- Financial protection: Car insurance provides coverage for damages to your vehicle, medical expenses, and liability claims, saving you from potentially significant financial losses.
- Peace of mind: Knowing that you have insurance coverage in case of an accident or other unforeseen events can give you peace of mind while driving.
- Legal compliance: Having car insurance is often a legal requirement to drive on public roads, ensuring you are in compliance with the law.
What are the disadvantages of car insurance?
- Cost: Car insurance premiums can be expensive, especially if you have a poor driving record or a high-risk profile.
- Deductibles: If you need to file a claim, you will have to pay the deductible out of pocket before your insurance coverage applies.
- Policy limitations: Car insurance policies may have limitations, exclusions, and coverage caps that can affect your ability to fully recover damages in certain situations.