How can you get the best deal on auto insurance?

Answer 1

The auto insurance rates (which translate into premiums) in most states are regulated by the state insurance regulator. As part of that process, the regulator requires or allows certain categories of discounts for various driver and vehicle characteristics. These include "good driver" discounts, "multi-car" discounts, discounts related to driver education courses, and others.

The cost of insurance also depends upon the extent of the coverage that you purchase. For example, most states require liability insurance, but you do have a choice as to how much to buy. Lower liability limits run the risk of being exhausted more easily, but they are less expensive. If you do not have many assets that are available for an injured third-party to seize in the event of a collision that is your fault, you may be willing to take a calculated risk to buy lower limits in return for a lower premium. If you have many assets, you may choose to buy greater liability limits to protect them, and to pay a higher insurance premium. Likewise, if you have an older car, you may decide to forgo physical damage coverage such as collision and comprehensive and pay necessary repairs yourself. By so doing, you would not have to pay the premium for that sort of coverage.

Insurers compete with each other on rates and service. A low rate (premium) may be worth less to an insured if there is very poor customer service, so don't be focused entirely on cost.

Check with colleagues on experience that they have had with various insurers. Interview agents and get quotes, and get a feel for whether they will be there to help in the event of a claim. Most people do not understand the workings of insurance, so it is important to have an agent to whom you can go for advice and to be an advocate in the event of a claim.