Finding the Best Deals on Auto Insurance

When trying to save money on monthly bills, it’s important to look at things like the automobile insurance. Even if you’ve been with the same company for several years, it may be time to make a change in order to save some cash.

Different companies offer a range of auto discounts to help you save, and you may find that the rates really are lower with the other guys.

Before you start shopping around for better insurance, here is some information you know about the insurance industry in general and finding the lowest rates for your family. Be sure to also enter your ZIP code into the FREE tool at the top of this page to start comparing!

Where You Live Matters

It’s important to remember that were you live does matter. Insurance companies charge based on their expenses in a given area, and that includes losses to accidents, uninsured drivers and fraud. Money Magazine shared a report that compared rates around the nation.

The report sampled six carriers in 10 zip codes for each state, and they used the coverage limits of $100,000 injury liability per person with a $300,000 maximum per accident, $50,000 in property damage coverage, uninsured motorist coverage and a $500 deductible.

The sample assumed a 40-year-old single male driver with a 12-mile commute, and these were just a few of the highlights.

• Michigan has the highest rates in the nation with an average of $2,541 annually. Experts report that part of this higher cost comes in part from “Driver responsibility fees” that are required in the state.
• Louisiana also had high rates with an average of $2,453. In this state, elected judges hear cases when the claims are less than $50,000. A “no pay, no play” law is in place to limit the damages that uninsured drivers can receive, and that helps keep the uninsured motorist rate low at only about 13 percent.
• Oklahoma has one of the highest rates of uninsured drivers in the country at nearly 25 percent. This combines with the risk of severe storms to give residents of this ate rates that average out at $2197.
• California also has high rates at an average of $1991 per year. Roughly 15 percent of drivers are uninsured, and this state also has a problem with auto theft. However, the state offers assistance through a low-cost program for people with low income levels.
• Mississippi has the highest rate of uninsured drivers at 28 percent, and they’re the seventh most expensive state with rates that average $1896 a year.
• Vermont has the cheapest rates with averages of $995 a year. They’re followed closely by South Carolina, Maine, Wisconsin, Tennessee, Ohio, North Carolina, and Iowa.

Remember that you can use online comparison tools to find better rates even if you live in a state with higher than average annual premiums.

While you may not be able to pack up and move to another state, you can still protect your finances by finding the best deals in your specific area.

Be Aware of No Pay, No Play Laws

When you’re hit by an uninsured driver, your insurance company expects the person at fault to cover the damage. If they don’t have the means to get your car fixed and cover your medical bills, then you could wind up paying for these expenses on your own.

If you have uninsured motorist coverage, then your insurance would pay for your personal losses. On the other hand, an uninsured motorist would still be able to file a claim against someone else’s insurance policy if they were the victim of an accident.

States across the nation are cracking down on this by putting special laws into place. With “No Pay No Play” laws, drivers who are breaking the law by driving without insurance are limited in the amount of compensation they can receive.

States that currently have these laws on the books include Alaska, California, Iowa, Kansas, Louisiana, Michigan, New Jersey, North Dakota, Oklahoma and Oregon. If you live in one of these states, trying to save money by skipping coverage completely might mean that you’re unable to collect damages even if you’re not responsible for the accident.

Learn the Law Requiring Coverage

Most state have minimum insurance requirements. While following these laws will ensure that you’re driving legally, those limits may not be enough to protect your assets in a lawsuit.

Before you start reviewing different insurance premiums, review your state requirements to ensure that you’re in compliance with the law. Consider increasing your coverage levels to provide yourself with additional protection. However, there are other important ways to save.

Up the Deductible

Higher deductibles serve to limit the losses of an insurance company. As you agree to cover more of repairs from storms or accidents, you will see your rates start to drop.

In some cases, you can lower your premium by 50 percent when you raise your deductible from $250 to $2,500. The key is having the $2,500 in a savings account should you get into an accident.

If $2,500 seems too high, then consider pricing out a $1,000 deductible to see if that looks more appealing.

Consider Dropping Other Coverages

You must carry liability insurance in most states, and it’s wise to have uninsured motorist coverage to protect yourself. However, you may be able to save by dropping other coverages.

Rental insurance is great, but it’s not necessary if you have an extra car in the driveway or a good public transportation system. Glass breakage is also convenient, but if you have a few hundred in the bank for a new windshield, then you may choose to forego this protection. Another coverage that you don’t have to invest in is comprehensive and collision.

While these are required by most finance companies for as long as the car is used as collateral on a loan, they aren’t legally necessary once your car is paid in full. If you have an older car with a low book value, then you could be paying more in comprehensive and collision than it’s worth.

If you decide to skip this protection, then put the savings in the bank for the first few years. This will ensure that you have the cash on hand to replace your car if it should be totaled in an accident.

Save by Shopping Around

The most important thing you can do to cut your insurance bill is to shop around for better rates. Edmunds reports that there are several factors that affect your insurance rates, including the type of car your drive, your age, occupation, where you live and your driving history. Even your credit score can lend to rising or falling premiums.

As this personal information changes, your rates may also change, so it’s always worth it to use a free comparison tool to find better rates. In the past, shopping around involved calling individual companies and sitting on hold, but online comparison tools simplify the process by allowing you to fill out just one form.

Once your information is entered, the companies will provide you with quotes so that you can make more informed decisions regarding your next insurance carrier.

More than Price

Remember that there’s more to choosing a new auto insurance provider than just comparing the different prices. A company offering cut-rate plans may not be around to pay out on any claims if they aren’t financially sound.

Some state insurance websites have links to companies like A.M. Best or Moody where consumers can check company ratings.

JD Power also offers valuable information regarding ease of paying the premium, customer service, overall customer satisfaction, policy offerings and claims service. While you may pay a little more to get the service and other features that are important to you, it’s worth it for the extra peace of mind that comes with knowing that your insurance company will be there for you.

Before you make another payment to your current provider, take the time to shop around and see if you can find better rates. You may be surprised with the savings that are available for you, and you may be impressed with how easy it is to shop around using the right online comparison tool.

You may be able to find a company that offers more attractive rates while upholding higher service standards, and it won’t take nearly as much time and effort as you might think.

Be sure to enter your ZIP code into the FREE comparison tool above to start your search for the best deals on auto insurance!