It isn’t always easy to know whether you’re getting a good deal.
Let’s say you need to buy a new television, and you buy one at what seems like a great price – only to find it at an even lower price the next week. Clearly, you didn’t get the great deal you thought you did. Or maybe you buy an inexpensive television – the cheapest available – and it breaks a few months later. Once again, your supposedly great deal wasn’t so great after all.
Car insurance is similar, but it can be even more complicated – and the stakes can be much higher. You need to know for sure that you’re really getting a good deal.
You can’t know that you’re getting a good deal on something without shopping around. This is true for everything, but it’s especially true for car insurance.
Although people sometimes talk about average auto insurance rates, the reality is that auto insurance rates are very personalized. Asking how much an auto insurance premium should be is kind of like asking how long a piece of string is. The answer is that it depends.
Auto insurance rates depend on a number of factors, possibly including:
- Your age, gender and marital status
- Where you live
- Your driving history, including tickets, crashes and DUIs
- Your credit score
- How much and why you drive (e.g., commute or pleasure)
- The type of car you drive
- Other drivers on your policy
All these factors mean that your auto insurance premiums probably won’t be the same as your neighbor’s, much less someone who lives in a different city or state.
As a result, you can’t just get a quote and compare it to some sort of average you find online. Although these numbers might be helpful in giving you a basic idea of how much you might pay, you need more personalized numbers to figure out whether you’re actually getting a good deal.
Auto insurance companies tend to look at the same factors, more or less, when determining rates, but they may weigh these factors differently. That’s why the rate that one insurer offers might be totally different from the rate another insurer offers.
Don’t just assume you’re getting a good deal. Be sure of it by getting quotes and comparing your options.
Look into Discounts
Smart shoppers tend to use coupons or buy things when they’re on sale. You can’t really do that with auto insurance, but you can look for discounts. There are a lot of different discounts available, and you might be surprised by some of the discounts you qualify for.
Common discounts reward safe drivers or good students with lower auto insurance premiums. And if your rates are higher than you want, you might be able to get a discount for taking a driving course to refresh your skills.
Other discounts have more to do with the car you drive than with you. For example, if you drive a car with key safety features – like automatic emergency braking – you may qualify for a discount. You might also get a discount for installing an anti-theft device.
There may be other discounts, too. Even if you think you’re already getting a good deal on car insurance, you should look into what discounts are available and see if you qualify for anything. Doing so might turn a good deal into a great deal.
Get the Right Coverage
Let’s say you find a 75% off clearance sale on a shirt you absolutely love – but it’s three sizes too small for you. The shirt might be a great deal for the right person, but it would be a pretty lousy deal for you.
You don’t want to waste money on a shirt that doesn’t fit you. Likewise, you don’t want to waste money on car insurance that doesn’t fit your needs.
Every state establishes laws for the minimum amount of car insurance that drivers are required to carry. This usually includes minimum limits for bodily injury and property damage liability coverage, but it may include some other types of coverage as well.
The key is to remember that this is the MINIMUM amount of insurance you need. It’s a starting point – it’s not necessarily the end point. Depending on your needs, you may need higher limits and/or additional coverage types.
Or maybe not. You don’t want to waste money on coverage you don’t need. But you do need to consider your options and pick the ones that meet your needs. Otherwise, you might find yourself in a really bad situation – as in, your car is wrecked, you’re seriously injured, and you don’t have any coverage for it.
No matter how cheap your premium is, if it doesn’t give you the coverage you need, it’s probably not a good deal.
Here are some common insurance coverage types to consider:
- Comprehensive and Collision: Together, these two coverage types provide protection for your car in a number of situations, including crashes, animal collisions, storm damage, theft and vandalism.
- Uninsured/Underinsured Motorist: If an uninsured or underinsured driver injures you, these coverage types can help cover the resulting costs. Some states require uninsured motorist coverage or at least require insurance companies to offer it to you.
- Gig Work Coverage: If you use your car for commercial purposes, including gig work, a regular personal insurance policy might not provide the right coverage.
Consider All Your Options
Most people aren’t insurance experts. That’s completely understandable. Unfortunately, it also means that some people may not know about the options that could get them a better deal on insurance.
If you’re facing a larger premium than you’d like, there may be some ways to get a better deal. Here are a couple of options to consider, depending on your needs:
- Named Driver Exclusion – When you apply for car insurance, you’ll be asked to provide information on every driver in your household. This is important. Leaving out drivers could mean you don’t have the coverage you need, and if anything goes wrong, that omission can come back to bite you. But what if a driver in your household has a bad driving record? That person’s rates will likely rise as a result – and everyone else in your household might see higher rates, as well.
To avoid this problem, you might consider using a named driver exclusion to exclude the high-risk driver from your policy. This can bring everyone else’s rates down – which is good – but keep in mind that the excluded driver will need to purchase a separate policy in order to get coverage.
If you’re not sure whether a named driver exclusion would help or hurt you, try getting quotes both ways – with one policy that includes the high-risk driver and then with two separate policies. Then you can determine which one provides a better deal.
- Usage-Based Insurance – Letting your car insurer monitor you may seem strange, but it can also be mutually beneficial.
If you don’t drive much, usage-based insurance can ensure that you’re only paying for the coverage you need. These arrangements can also be useful if you need to prove that you’re now driving safely – perhaps after a traffic incident or two. By using usage-based insurance and letting your insurer monitor your driving habits, you might qualify for some significant discounts. It’s just one more way to get a good deal on auto insurance.
Maybe you already did all your due diligence to be sure you were getting a great deal on car insurance – but that was years ago. If you haven’t shopped around for auto insurance recently, you might be missing out on a great deal.
Ready to see what great deals are waiting for you? Get a quote today.