How to Shop for Car Insurance the Right Way: Smart Tips for Affordable Rates

The auto insurance industry rakes in a hefty 285 billion dollars every year. How do car insurance companies get so darn rich? By charging people like you a fortune!

We’ve all seen that ad on TV about “low insurance rates” and have gone online to get a quote only to be blown away by how convoluted an insurer’s definition of low is.

Is it even possible to get good, cheap car insurance these days? The answer to that question is a resounding yes!  Using an online service can quickly compare car insurance companies so that you get the best rate with full coverage.

By leveraging our how to shop for car insurance guide below, you’ll be able to not only find an insurer that you can trust but you’ll also be able to work the angles to get the best deal!

Never Compromise on Coverage

Before we dive into our insurance savings tips (which is why we’re assuming most of you are reading) let’s briefly talk about the importance of proper insurance coverage.

When people buy insurance, many assume that since they’re insured, they’re protected in the case of an accident. Unfortunately, not all insurance policies are created equal, and many policies offer little protection to motorists.

Whenever you sign up for an insurance policy, you’ll be presented with a variety of “policy limits” across different categories. Understand what each of those categories means and ensure that their dollar amount would cover your assets/legal fees in the event of a catastrophic event.

If you comprise on coverage to save a few dollars on your insurance premiums, the consequences could prove disastrous.

Always Research an Insurer’s Reputation

As the amount of cars on America’s roads surpasses 250 million, a lot of opportunists are trying to cash in by starting fly-by-night insurance companies. These companies make it exceptionally hard to get through to customer support and can be unreliable when it comes to paying out claims. To avoid doing business with insurers that you can’t trust, use these experts and online review boards to vet a prospective insurer before signing up for their services.

Ways to Save Money on Car Insurance

With those disclaimers out of the way, it’s time to talk about saving you money! Below are a few tried-and-true tips that could save you thousands of dollars every year on your car insurance.

1. Keep Your Options Open

The beauty of the auto insurance industry is that there are a ton of major players competing for your business. Thanks to that fact, car insurance rates change every day in an effort to offer the best deals possible.

To make sure that your how to shop for car insurance workflow ends up saving you as much money as possible, don’t cheat yourself by only looking into the insurance company that you’ve seen advertise the most on television. Take advantage of the competition that’s out there and search for quotes across multiple, reputable providers.

You’d be shocked to see how much prices can vary for the exact same coverage from insurer to insurer.

2. Look For Special Discounts

Car insurance companies offer a variety of discounts to certain customers.

If you get your car insurance quote online, chances are that you’ll be asked a series of questions that’ll automatically qualify or disqualify you for/from special savings. If you shop for an insurance quote over the phone, you’ll want to ask your agent if there are profession-based or club-based savings that you can take advantage of.

Teachers get car insurance discounts, police officers get discounts, and even members of certain fraternities get discounts, so who knows what you might qualify for?

3. Keep Your Credit Score Up

We’re seeing a growing amount of auto insurance companies offering to run applicant’s credit in exchange for a better insurance rate. If your credit score is good, we recommend opting-in to this offer to shave a few dollars off of your rate.

It may be that your insurance company will run your credit whether or not you want them to as part of their vetting process. Because of that, if saving money is important to you, make sure that you pay down your existing debt to start bringing your credit score to a good place.

4. Ditch Comp and Collision on Old Cards

There are two core categories of automobile insurance: Liability and Comprehensive and Collision (Comp and Collision) coverage.

Liability insurance is legally required to drive. It’s what protects you from paying for damages caused to people that you may hit. Comp and Collision insurance protects your vehicle from repair/replacement costs after an accident.

While leased or financed cars do require that you opt into Comp and Collision coverage, if you own your car outright and don’t think it’s worth much, you can save on your insurance premiums by going only with liability coverage.

Just be aware that without comp and collision coverage, you won’t receive anything if your car is totaled.

5. Opt For Higher Deductibles

When you get a car insurance quote, you’ll have what’s called a “deductible” that you’ll have to pay before your coverage kicks in. The more expensive that you make your deductible, the more your monthly premiums will go down.

If you’re a safe driver and you feel that the chances of you getting into an accident are low, you could save a tremendous amount on your car insurance policy by going for a high deductible and low premiums plan.

Closing Out Our How to Shop for Car Insurance and Save Guide

How to shop for car insurance is a question that’s not answered by just typing in your favorite insurance brand into your web browser, getting a quote and paying.

If you do that, you’re not shopping as much as you’re buying. You’re probably also overpaying.

To save the most money and to ensure that your coverage will protect you in an accident, follow our tips above, take your time finding the right deal, and if you need more relevant financial advice, read more of the informative content on our blog!

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