Insurance may not be the most thrilling aspect of owning a vehicle, but it is crucial. Your insurance policy is meant to shield you from financial disaster in the event of an accident or injury, and most states mandate insurance coverage if you wish to register a vehicle. We advise comparing policies not only when purchasing a car but also periodically to ensure you’re always receiving the best price available.
Through a survey conducted with over 40,000 insurance holders, We have pinpointed the companies that provide top-notch service alongside the most competitive monthly rates. To secure the best rates on car insurance, it’s beneficial to understand the elements that insurers consider when determining your monthly premiums. These Shop Auto Insurance factors include:
Driver profile: Characteristics such as age, driving experience, and driving record—like past accidents or traffic offenses—can all affect premium costs, as insurers may classify you as a higher risk. The inclusion of a young driver can also increase the price of your policy.
Car type: Generally, the more costly a vehicle is, the higher the insurance premium, as expensive cars incur greater repair and replacement costs. Additionally, high-performance vehicles tend to have elevated insurance premiums due to the added risks that come with owning a faster car.
Credit history: Experian, a credit reporting agency, indicates that most states permit insurers to take a customer’s credit score into account when setting rates. Insurers argue that credit history accurately predicts the probability that they’ll need to pay out on insurance claims. However, in California, Hawaii, Maryland, Massachusetts, Michigan, Oregon, and Utah, this practice is restricted or forbidden. In other states, boosting your credit score might lead to better rates.
External conditions: Local weather conditions, traffic situations, and other aspects that elevate the likelihood of claims can drive up premiums. For instance, if severe weather events in your area have led to numerous insurance claims in the past—such as significant hurricanes and flooding—your insurer may petition your state’s Shop Auto Insurance regulator to increase rates across the board to reflect their heightened risk exposure. Customers residing in areas with more frequent accidents may also see higher costs.
Loyalty Doesn’t Pay
Many people mistakenly believe insurers reward long-term customers. A recent national survey commissioned by us revealed that you could save money by occasionally searching for better rates. Thirty percent of those surveyed indicated they had switched insurers within the last five years, and among those, 70 percent cited obtaining a lower price on their annual premium as the primary reason for their switch.
“Price optimization” might also be a reason to look for a new insurance provider every few years. Currently, nearly half of U.S. states have banned this contentious practice, which allows insurers to increase rates without justification related to the risk of liability. Essentially, if an insurer determines you are unlikely to change to another provider, they may raise your rates simply because they can, costing you more.
Factor In Life Changes
If you get married, add a young driver, change your vehicle, or your commute distance shifts—as was the case for many during the pandemic—check with your insurer to see how these changes may affect your costs or savings. It’s wise to compare rates from other companies to find the best offer. Don’t forget to request an adjustment to your coverage to reflect your car’s depreciation; insurers may not automatically do this without your prompting.
To find a comprehensive list of insurers not readily apparent through a simple internet search, refer to our Shop Auto Insurance ratings.
Pick a Top-Rated Insurer
While obtaining a lower premium is important, the cost isn’t the only consideration. Look for a provider that, in addition to having competitive premiums, delivers prompt and fair claim settlements, excellent customer service beyond claims, helps you thoroughly review your policy, and actively provides guidance and advice.
We evaluate insurers based on feedback from members regarding their premium costs, claims processing ease, quality of non-claims-related customer service, thoroughness in policy reviews, clarity of coverage, and proactive assistance. To develop our ratings, we surveyed 40,566 auto insurance policyholders nationwide in early 2024 about their experiences with the car insurance companies they used, including whether they had switched insurers or filed a claim between 2020 and 2024.
Don’t Cut Corners on Liability Coverage
Many states mandate that drivers maintain a minimum level of insurance, but if your budget allows, it’s wise to enhance your coverage beyond these basic requirements. Insufficient liability coverage could leave you responsible for paying thousands of dollars if you’re deemed liable for injuries or fatalities resulting from an accident.
Liability insurance: This will cover bodily injuries and property damage inflicted on others in an accident. Experts advise securing more than the legal minimum limit, even if you don’t possess significant assets. Depending on your state’s laws, part of your wages could be subject to garnishment in a ruling against you. A recommended protective coverage level is $100,000 per individual, $300,000 per accident, and $100,000 for property damage.
Douglas Heller, an insurance expert at the Consumer Federation of America (CFA), suggests considering an umbrella liability policy since it expands coverage for both your vehicle and home and provides additional protections. These types of policies are intended to safeguard assets like your home and retirement accounts, typically increasing per-person liability coverage to $300,000.
Low-limit coverage: Heller notes that while umbrella policies and policies with higher liability limits offer superior protection, they can be challenging for lower-income drivers to afford. Presently, only three states—California, Hawaii, and New Jersey—provide specialized insurance options for drivers with lower incomes. Heller points out that carrying low-limit liability coverage is preferable to having no Shop Auto Insurance at all, or choosing not to drive, which may limit individuals’ economic prospects.
Uninsured motorist coverage: In numerous states, this coverage is not required, but it is advisable to have. The Insurance Information Institute reports that 14 percent of drivers lack car insurance, a figure that has remained consistent for over two decades, making uninsured motorist coverage a sensible investment, even if it’s not mandated. Typically affordable, this coverage pays medical expenses for you and your passengers following an accident caused by an uninsured, at-fault driver.
Why opt for uninsured motorist coverage in a no-fault state where your insurer covers costs regardless of fault? Because it can reimburse lost wages after an accident. Additionally, uninsured motorist insurance protects you and your family as pedestrians and in cases of hit-and-run incidents. (According to the National Highway Traffic Safety Administration, pedestrian fatalities have been climbing in the U.S. since 2010. In 2022, the latest year for which data is available, 7,522 pedestrians lost their lives and over 67,000 were injured in motor vehicle accidents.) Heller emphasizes the importance of ensuring you have at least as much coverage for yourself as you would for others involved in a collision.
Underinsured coverage: More drivers are choosing to carry only the state-mandated minimum liability coverages to save money. Underinsured coverage safeguards you if you get into an accident with someone who lacks enough insurance to cover your injury and property damage costs.
Seek Savings on Other Coverages
Collision insurance, which covers damage from collisions, and comprehensive insurance, which protects against vehicle theft and damage from things like storms, are two types of coverage you might reduce to cut your premium. You might also be able to eliminate other coverages for additional savings.
Adjust your deductible. Increasing your comprehensive and collision deductibles from $500 to $1,000 can reduce your premium by an average of 11 percent, according to Hunter at the CFA. Just ensure you can manage to pay the higher out-of-pocket expense if you are unfortunate enough to experience an accident.
Older vehicles don’t need extensive coverage. Think about dropping collision and comprehensive coverage when your annual premiums reach or surpass 10 percent of your car’s market value. Otherwise, you may end up spending more over time than you would gain from repairing or replacing your damaged, stolen, or totaled vehicle. (If your vehicle is appreciating and classified as a classic, and you don’t typically use it for commuting or errands, consider securing a classic car policy. This type of insurance values your car based on its collectability and other aspects.)
Eliminate rental reimbursement coverage. If you have access to another vehicle during repairs, you don’t need this coverage. You can also skip roadside assistance coverage if you possess an auto-club membership that offers a better deal, or if roadside assistance is included in your car’s warranty.
Examine personal injury protection and medical payments coverage. If you already have solid health insurance, you don’t need it through your auto policy. Retain the Shop Auto Insurance coverage if you lack health insurance or if your regular passengers may not be well covered.
Actively seek out discounts. Potential discounts may include savings for bundling home, auto, and umbrella policies with the same provider, completing a safe-driving course, or informing your insurance provider about your safety features.
Follow These Steps to Increase Your Savings
Maintain a clean record for both your credit and driving. Both factors influence your insurance premium costs. To secure the best rates, aim for a minimum of three years of safe driving. Generally, your insurance costs will be lower if your credit score is high.
Select your vehicle carefully. Insurance premiums can differ greatly depending on the model. When evaluating different models, request premium quotes from your insurer for each vehicle you’re considering. Typically, luxury and high-performance vehicles are more expensive to insure compared to standard models.
Designate the appropriate driver for each vehicle. Consult your insurance agent regarding who should be the main driver for every car in your household. Matching drivers to cars based on their driving records and the value of the vehicles could result in savings. For example, assigning a lower-value car to the driver with the longest commute may be less expensive than assigning them a higher-value car. (However, this might require some discussions among family members.)
Enroll in a driving behavior monitoring program. Some insurers provide discounts if you permit them to track your driving habits through a smartphone app or a device connected to your car’s diagnostic port. While this could lead to significant savings, you must be comfortable with a degree of privacy loss, as your insurer will monitor your movements similarly to how some smartphone applications do. Before enrolling, check with your insurer about what data will contribute to the discount, whether negative driving behaviors could raise your rate, and the ways the collected information might be used.
Shop Auto Insurance
Shop Auto Insurance
