How Do I Get the Best Deal on Car Insurance?

Car insurance costs can be significant, but there are many things that drivers can do to reduce these costs. This includes doing research and comparing policy costs between companies, eschewing "extra" coverage options, taking defensive driving courses, improving credit scores, reconsidering the purchase of flashy, expensive vehicles, and maintaining a clean driving record.

For many people, car ownership and driving is not a luxury: it's an absolute necessity. Not all areas have good public transportation, and in many cases driving is necessary for being able to shop, commute to work, and getting your kids to school, sports practice, and other activities.

Cars can be expensive though, not only to buy, but also to maintain. In addition, you will also have to pay for car insurance. Getting the best deal is important to many consumers, and there are multiple factors that you should take into consideration when choosing a policy.

Take Your Time

When you go shopping for a new car, friends, family and consumer advocates all tell you the same thing: Automobiles are expensive, so don't be rushed, take your time, ask questions and do a lot of research. Your decision isn't just about money, but your health and safety. The same holds true for car insurance. A bad insurance policy, even if the premiums are cheap, poses dangers to yourself and your family.

The first danger is to your health: If you don't have the level of coverage necessary to take care of you or a family member who has been injured in a crash, you may not be able to afford appropriate medical and nursing care, which could include physical therapy and rehabilitation. Failure to get this kind of care in a timely fashion could limit recovery, possibly leading to lifelong disability or chronic pain.

The second danger is to your finances. In addition to the risk of disability that could prevent you, or a family member, from working, there is also the possibility that you may be held liable for an accident that happens in your automobile. If this happens, and your insurance does not provide adequate coverage, you may be the target of a lawsuit that could have a significant impact on your ability to purchase a home, keep the home you have, enjoy the lifestyle that you've worked for, or enjoy a comfortable retirement.

At the same time, it is important to not overspend on car insurance. That's why you want to compare policies closely and make a considered decision. If you have a clean driving record and have taken certain common-sense precautions, there is a good chance that you will be able to get an affordable premium that offers appropriate coverage and good customer service.

What Kind of Coverage do You Need?

As with most types of insurance, auto insurance coverage can vary significantly between policies. A good insurance agent can work with you to figure out what your needs are and can steer you toward policies that suit your circumstances while also fitting into your budget.

Many insurance experts agree that it is vitally important that you have sufficient bodily injury liability coverage. This protects you, or any authorized drivers of your vehicle, from lawsuits resulting from causing someone bodily injury with your vehicle. It is often suggested that this is one type of coverage that you don't skimp on, as a significant judgment against you could be financially ruinous if it exceeds your coverage cap.

Other types of coverage include collision, which pays for repairs to your vehicle regardless of whether you were at fault for an accident, uninsured motorist coverage, which compensates you for damages caused by an uninsured motorist who is at fault in an accident, as well as comprehensive coverage, which covers damages caused by things other than accidents, such as weather incidents, collisions with animals, or theft.

Figure Out What You Don't Need

Some insurance policies cost more because they include additional services that you might not need. These might include emergency roadside assistance or rental car reimbursement. As some consumer advocates of pointed out, you may already have emergency roadside assistance available to you through your credit card company. If you do, or you belong to an auto club, such as AAA, you may be able to reduce the cost of your insurance premiums by declining roadside assistance. The same holds true for rental car reimbursement: You may not need a rental car if something happens to your primary vehicle, or your household may already have another car that you can use if your automobile is in the shop.

Customer Service

One factor that is often overlooked when purchasing insurance is that of customer service. Time is money, and a cheap policy that forces you to spend hours on the phone or tracking down paperwork could end up costing you more than you thought you'd save with a budget option.

Research customer service ratings for insurance companies, as well as your agent, before making a final decision. You may also want to check out what kinds of automated services an insurer provides. For example, some insurers, such as Geico or Allstate offer mobile phone apps to customers that allow you to manage your account and check claim statuses right from a phone or tablet.

Understand Factors in Insurance Costs

Car insurance premium costs can vary significantly between individuals. This is because the underwriting process takes multiple factors into consideration when determining the likelihood of claims and how much they will cost the insurer.

Fortunately, many of these factors are under the control of the policyholder. This means that if you are willing to change behaviors or habits, you have a good chance of being offered lower insurance premiums:

Age: Younger drivers usually have higher premiums, as do drivers over 65. Both groups are seen as having greater risks of an accident.

Driving history: Insurers take into consideration both how long you have been driving, as well as your history of accidents or violations. If you've been driving for a long time, and have a record of safe driving, you're likely to see a reduction in your rates. Accidents and violations, however, can cause your rates to creep up, even if you've had your license for decades.

Education: Some insurers offer college graduates lower rates, though some states are starting to restrict this policy.

Credit score: Good credit scores can lead to lower insurance rates. Be sure to check your scores at TransUnion, Experian, and Equifax regularly to keep your premiums down.

Safe driving course completion: Taking classes in safe driving skills can, in some cases, reduce your premiums.

Driving frequency: The more you drive, there's a greater risk of an accident. If you drive infrequently, let your agent know. You may be able to get a different policy for those who don't get behind the wheel too often.

Type of car, car features: The make and model of your car can have some bearing on insurance rates. Safety features, such as backup cameras, can sometimes lower your rates, but not always. This is because high-tech features cost money to maintain and repair.

Coverage lapses: Try to avoid letting your car insurance lapse, even if you won't be driving for a while. You can sometimes pause your insurance coverage if you know you won't be driving. Gaps in coverage can make insurers nervous, as they may assume irresponsibility. This can lead to high premiums or even rejected applications for coverage.

Consider Bundling Insurance Policies

Another strategy for reducing insurance costs is to bundle all your insurance policies with one company. This approach doesn't always work, and your agent can let you know if it doesn't, but you can sometimes enjoy significant savings by having your health, life, homeowners and car insurance with one company.

Another advantage of bundling is streamlining customer service and claims at one time. This can be particularly helpful if you are dealing with a major incident that requires claims on more than one insurance policy.

Final Word

Insurance of any type can be a challenge to purchase and use. It can also be a significant expense. Learning more about how car insurance costs work, as well as making sound decisions about the car you drive and your own driving behavior, can significantly improve your chances of getting an affordable policy that gives you the coverage you need.

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Christian has been writing about long hold times and customer service call center experiences since 2010. He's been featured in Bloomberg, the Wall Street Journal and the Boston Globe.

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