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How to Choose the Best Car Insurance

The best auto insurance for you offers the coverage you need for a price you can afford. Sometimes getting the cheapest car insurance is a matter of tapping into exclusive discounts, switching providers after your term is done or bundling with your other policies, such as homeowners, renters or pets. 

Take a look at these tips to help you choose the right auto insurance based on your needs.

Determine the amount of coverage you need

If you already have health, life, and disability insurance, your state’s required minimum coverage could do for you, mainly if it covers an amount equal to the value of your assets. But that probably will not be enough coverage if you have an accident that causes damage to other people. The best practice here is to get liability coverage for property damage and bodily injuries for at least $100,000 or the highest amount you can afford.

Consider your state’s minimum requirements

Before choosing a car insurance policy, you should check your state’s car insurance requirements. The minimum requirements for car insurance are on a state-by-state basis. Some examples of minimum requirements are liability coverage for property damage and bodily injury or death, as well as uninsured and underinsured motorist coverage. 

Look for discounts

To attract more customers, auto insurance companies offer discounts for a variety of reasons. Some examples include discounts for students who get good grades, good drivers, multi-vehicles, homeowners and car insurance with the same company, and even paying your bill online.

Compare quotes

You can get car insurance quotes online or from an agent; either way, you need to answer the questions thoroughly. Insurance companies use the information you provide to determine how risky would be to insure you and give you an estimate of how much would cost your premium based on it. A best practice is to get quotes from at least 3 different providers. Make sure that the coverage is comparable since the cheapest quote might be leaving something important out..

How much you drive

Longer commutes or driving around a lot might flag you as higher risk for insurance companies and translate into a more expensive premium. Most online quotes tools will ask for the number of miles that will take you to go from your home to your work, so having this information could help you save money. 

You can get more tips and tricks in our guide for car insurance buyers.

Factors that affect your auto insurance cost

State’s minimum requirements

Every state has a minimum amount of car insurance coverage that drivers are required to carry. The more coverage that’s required, the more expensive your insurance premium is. But even if you’re paying a higher rate, you can still take advantage of discounts that can help lower the cost.

Financial situation

When you file a car insurance claim, you’re required to pay a deductible before the insurance company reimburses you for the loss. Your deductible is an out-of-pocket cost, and the lower your deductible is, the higher your insurance premium is.

Vehicle

The vehicle you drive has a big impact on your car insurance rate. Certain makes and models, like SUVs and luxury cars, are much more expensive to insure than sedans. The age and mileage of your car will also affect your rate. Typically, newer cars with low mileage cost more to insure than older cars.

Driving record

Before you can buy car insurance, the company reviews your driving record to determine your past claims history and recent violations. If you have filed insurance claims in the past or have accidents or speeding tickets on your record, you can expect to pay more for your car insurance.

How much coverage you need

The more car insurance coverage you need, the more money you’ll pay. If you choose to raise your policy limits above the standard amount, your rate will increase. You’ll also pay a higher car insurance premium if you add endorsements to your policy. 

Credit score

Your credit score is one of the biggest factors that goes into your car insurance rate. A driver with a poor credit score will pay significantly more for their insurance than a driver with a good credit score. 

Location

Car insurance prices vary by region. According to the Insurance Information Institute, Louisiana, Michigan and Florida have the highest rates, whereas North Dakota, Maine and Iowa have the lowest rates. The risk of severe weather, the number of uninsured drivers, and the type of state contribute to the cost of insurance in a given state.

Marital Status

Surprisingly, your marital status has an impact on your car insurance premium. Married people tend to pay less for insurance than single people. Additionally, married couples often qualify for a discount if they insure two vehicles on the same policy. 

Gender

Gender is another thing that impacts your car insurance rate. Men typically pay less for their insurance than women. However, there are currently seven states that do not consider gender when calculating car insurance rates. Those states include California, Hawaii, Massachusetts, Montana, North Carolina, Pennsylvania, and Michigan.

Claims history

For an insurance company, it’s much riskier to insure a driver with a history of claims. That’s why drivers who have filed insurance claims in the past pay more for their insurance. Not only do claims-free drivers pay less, but they usually qualify for a discount because of it.

Discounts 

Most insurance companies offer discounts, and if you qualify for one, it can lower your rate. Some examples of common discounts are policy bundling, having safety features in your car, taking a defensive driving course, being a good student, being claims-free, and paying your annual premium in full.