How to shop for car insurance to get the best deal

Megan DeMatteo

Aug 14, 2019, 23:05 IST

How to shop for car insurance to get the best deal

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Learning how to shop for car insurance can help you get a better deal.

Nearly one third of Americans think they're paying too much for car insurance. The best way to find a better policy is to learn how to shop for car insurance and compare your options.
You'll want to compare both big national insurers, like Allstate, Geico, and State Farm, and smaller local insurance providers.
Look beyond just the monthly premium at the plan's deductible and compare quotes line by line to see what's actually covered.
Get a quote from Allstate today to see if you can save on car insurance »

According to a 2017 NerdWallet survey, 28% of drivers think they are paying too much for car insurance.

This percentage is even higher among Americans making between $50,000 and $75,000 per year, at 37%.

Consider the implications of this: A third of drivers are dissatisfied, yet most continue to renew their policies without taking the time to shop for alternative options. Car insurance companies know this, and they are known for raising rates at the time of policy renewal, which usually happens every six months or every year.

If your auto insurance renewal is approaching - or if you're buying car insurance for the first time - get ahead of the game by shopping for a better quote. Here's how.

How to shop for car insurance

1. Find out your state's minimum coverage requirements

The four main types of coverage are bodily injury liability, property damage liability, personal injury protection, and uninsured/underinsured motorist protection. Many states only require bodily injury and property damage liability, and these requirements can change depending on the age and value of the car. Do your research ahead of time by looking up minimum insurance requirements at your state's motor vehicle administration.

2. Compare at least three different policies

The best way to make sure you haven't overlooked any red flags or essential questions is to comparison-shop policies by getting quotes from at least three different auto insurance companies. Though it does take a little extra time, doing so could save you hundreds of dollars every year. In this case, your time is well worth it.

Comparison shopping is the best practice for a few reasons. For starters, it prevents you from assuming that one company in particular is the cheapest. Also, one company might be more forthcoming than another when it comes to a particular feature of their policy. This will help you build a list of questions you should be asking all of your potential insurers.

Be sure to check both national and local companies, too. You'd be surprised how many regional insurers have better customer satisfaction than the big wigs.

To comparison shop for the best car insurance, here's what you do:

First, make a list of a few national auto insurance companies. You can find them by simply Googling "auto insurance" and scrolling through the list that comes up. Then, do the same for auto insurance in your area. To do this, simply add your city and state to your Google search.

A quick search for auto insurance companies in Maryland yields companies like Maryland Auto Insurance, Goad Insurance Company, and Woodhome Insurance. Open a new tab for each company you'd like to investigate, aiming for about three to five.

Next, you'll need to get a quote for your specific situation. You can either fill out an online form to have a quote generated, or simply call the customer service line. You'll need your vehicle's VIN number, and the year, make, and model of your car.

You'll also need to provide some details about how you use your car so the insurance company can make an honest assessment of your risk. This will include your daily commute (in miles), your zip code, where the car is stored (in a garage or on the street), and the number of accidents you've had in recent years. You'll also need to put in your age and gender, since some states consider these factors.

Compare the quotes line-by-line and find a policy that works for you. Obviously, you'll want to find a plan that fits your budget - so premium payment is likely the first thing you'll consider.

But you'll also want to take into account the deductible, i.e. the price you'll pay if you file a claim, along with coverage areas. Some plans cover damage from uninsured motorists, and others don't. You'll want to find a plan that covers all of your state's minimum coverage requirements, plus any requirements that are important to you.

Though a lower premium is nice, you often get what you pay for. After you get quotes from each of the companies you speak to, ask them to send your quotes to you via email. If possible, print out every quote and compare the coverage line-by-line. This will give you a true idea of what the costs will be in the event of an accident.

Most policies with lower premiums have higher deductibles, and if you are a safe driver who doesn't use your car in many high-traffic areas, a high-deductible policy might be best for you. But know that you will pay for your claims one way or another. It is up to you to decide if you want to spread out the risk through higher premiums or save money every month in anticipation of a high deductible.

3. It's tempting, but don't lie

When faced with rising premiums, you might be tempted to "fudge" your numbers to get a lower rate. You're not alone. At least 10% of all drivers have either intentionally underestimated mileage, left a driver off their policy, provided a different zip code in a more desirable area than the one the car is actually stored in, or claimed their car was for pleasure instead of commuting.

While you might enjoy lower premiums if you take this route, all of these lies will come to the surface if you file a claim. In this case, you could be on the hook for the entire cost of damages because your policy would be rendered inapplicable, since the price you were paying was not for the truth of your situation. That's why it's best to avoid playing the odds and be totally truthful when you shop.

4. Ask for discounts

If you are interested in a discount, it's best to be upfront - yet polite - by asking about promotions explicitly. Be prepared to ask what kind of discounts they offer for customers. Common discounts include:

Deals for members of professional organizations (be sure to name yours)
Special bundle prices for joining your auto insurance policy with other policies, like homeowner's or renter's insurance
Multi-car discounts
Special quotes for paying your six-month or annual premium in one payment
Incentives to go paperless
Good driving record discounts
On-time payment discounts that could save you in the long run

After you've gone through these steps, you can relax knowing you did your due diligence to ensure you're paying the best rate for your personal car insurance.

Remember - be thorough in your search, starting with national companies but also looking into local companies to compare rates. You'll be happy you did. On average, consumers who shop around can save as much as 47% in premium costs, or as much as $847 per year. Even if you only save a fraction of this, a $200 savings is money that can be well spent (or saved) elsewhere.

Find out if Allstate can save you money on car insurance with a free quote »

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