Every driver should have auto insurance regardless of how much they drive. It protects you from financial liability in case you get into a car accident. And depending on your state’s legal requirements, you can attract hefty fines and risk a license suspension if you drive without one.
Finding affordable auto insurance can be challenging. However, shopping around is an easy way to find the cheapest rates available in the market.
When shopping around for auto insurance, you request quotes from several insurers. Experts suggest that comparing at least three car insurance quotes each year could save you hundreds of dollars. A car insurance quote is an approximation of how much you will pay for your premiums.
They are free, and you can get them online or through an independent insurance agent. When you get a quote, it’s always easy to miss out on the important details and focus on the price alone.
This is why you need to understand how an insurance quote works before you get started. We’ve rounded up some of the most important things that you need to know about an insurance quote to help you get a policy that’s right for your needs.
Factors That Affect a Car Insurance Quote
Insurers calculate your premium rates depending on a wide range of factors. The less risky your rating factors are, the less you will pay for your policy. While not all companies use the same variables to calculate your quote, some are common factors used to determine the bottom line of your premiums. These include.
Your Driving Record
Being a good driver can earn you better insurance rates. Insurers usually check your driving history to predict your future driving trends. A history of traffic rule violations and several tickets represent a higher risk and will therefore land you higher insurance rates.
Drivers with more years behind the wheel are less likely to be in an accident and file for a claim or reimbursement. This is why younger drivers below the age of 25 tend to pay higher rates. Teens specifically pay the highest rates because they are more likely to be in an accident than older drivers.
Insurance rates decrease after 25 if you have a good driving record and increase again once you hit 60. At 60, you are more likely to cause accidents due to poor eyesight and slower reflexes.
If you live in areas with record-high theft, vandalism, or accident rates, you are likely to pay more for auto insurance. In general, city drivers pay more for insurance than drivers who live in the suburbs.
The more you drive, the more you’ll pay for insurance. This is because you are more likely to get into an accident when you put a lot of miles in your car each year.
A deductible refers to the amount you pay out of pocket to cover an insured expense. It’s a way in which you and your insurer share the risk. You can lower your insurance rates by increasing your deductible.
Your Coverage Limit
The coverage limit is the highest dollar amount your insurer will pay after filing for a claim. It’s one of the most important concepts of an insurance policy. The higher your coverage limit, the more you’ll pay for insurance.
Important Information That You Need to Get an Auto Insurance Quote
When you request a quote, an insurer will typically ask for basic information that you already have at hand, such as your date of birth, marital status, gender, and address. You may also be required to give more extensive information, such as the vehicle’s model, make, and identification number.
You may also be required to submit the names of drivers you want to cover in your policy and your current coverage and limit (if you already have a car insurance policy). The insurance company may also dig out your past insurance claims, driving record, and credit history to determine if you are a high or low-risk client.
How Do You Compare Auto Insurance Quotes?
There’s more to look at than just the cost when you’re comparing different quotes. These include.
Insurance policies with lower deductibles have higher premiums and vice versa. This means that if you want to pay less for your premiums, you should look for quotes with a high deductible. However, you should make sure that you can cover the deductible in an emergency without running into financial difficulties.
There are many types of discounts that you can take advantage of to help lower your premium rates. These include safe driver discounts, bundling discounts, good student discounts, among others. Make sure that the discount offered can reduce your premium rates by a significant percentage.
Minimum Coverage Requirements
When you’re comparing quotes, make sure to check if they qualify for your state’s required minimum coverage.
The Bottom Line
There are many factors to look into when comparing insurance quotes besides the overall cost. These include deductibles, discounts, minimum coverage requirements, and coverage limits.
You should carefully scrutinize each policy to ensure that it gives you adequate coverage based on your personal needs and that it meets the minimum coverage required by your state laws.
Most importantly, make sure that you provide the same information to all insurers to make accurate comparisons.