Comparison shopping for auto insurance is one of the most effective ways to get the best auto insurance deals. You should shop around every few years, even if you’re happy with your insurer.
Many people don’t know that trick, or don’t feel it’s worth their time. Still, auto insurance companies raise their rates often, even for very safe drivers.
It may seem like your policy price increases a few dollars every at every renewal, but after a few years those dollars add up.
Other auto insurance companies will offer you a lower rate to attract your business. So, it is certainly worth your time to shop around for car insurance best deals. But first, you should check with your current insurer to be sure you’re getting the best rate possible.
Beyond comparison shopping, there are other ways to make sure you’re getting the best auto insurance deals. Today, we’ll cover:
We promise this guide is unbiased and written by licensed insurance agents. We know your first step towards saving money on auto insurance is to contact your current insurer and ask for a better price.
How to Get the Best Auto Insurance Deals for Your Unique Situation
Every auto insurance customer has a unique need. Some customers are family breadwinners who commute long distances, some have multiple autos or multiple insurance needs, some drive very little.
First, Gather Some Information
To get the best auto insurance deals for your unique situation, start by figuring out how much you drive (miles per year,) and how much you pay for insurance. Find your auto insurance policy declarations page to see which coverages you currently buy.
Then gather some information from your household, you will need:
Call Your Current Insurer and Explain that You’re Looking for the Best Deals on Auto Insurance
If you’re a safe driver who pays their bills on time, your insurance company might be reluctant to lose your business. Give them an opportunity to do better before you start comparison shopping for auto insurance.
Here are some common ways auto insurers will reduce your price to keep their customers:
They may “discover” new discounts that weren’t applied to your policy. These could include:
- Professional discounts, common for nurses, teachers, physicians, first responders and so on
- Safe driving discounts, especially if “points are falling off” your license in certain states
- Good student discounts
- Discounts for home and auto insurance bundles that weren’t applied
Furthermore, there are all sorts of other discounts an insurer can dream up after taking a rate hike! So, the only way to get the best value on car insurance is to be proactive and make the call. They’re counting on you to accept a rate hike without complaint, but they’ll scramble to keep your business if a safe driver threatens to leave.
Other Ways Your Insurer May Help You Get the Best Value on Car Insurance
Your favorite insurance agent can help you “find” coverages you didn’t really need in your policy. For instance, if you own seven vehicles, you probably don’t need rental car coverage on any of them, because you have other rides handy.
If a young adult in your family has recently moved out, or buys car insurance for themselves, that could be another money-saving point. Young, inexperienced drivers are extremely expensive to insure, especially when they drive newer, faster, more costly cars. Your agent may shuffle around the primary driver on various vehicles to get you a better price.
Let’s use a little story to illustrate that point.
How an Agent Can Massage the Details to Get You the Best Auto Insurance Deals
Let’s imagine an adorable family of three. Shannon and Shane — mom and dad — are in their forties, and they have a 17-year-old son, Liam. He is, by the way, a great kid. He gets awesome grades and earns a discount on his auto insurance for them.
Mom drives a brand new $100,000 Cadillac Escalade. She buys full coverage on that vehicle. Dad drives an older Toyota Tundra that’s paid off. He only keeps liability coverage on it. Liam buys a used Ford Mustang with his parents’ help, and he needs full coverage, too.
Assign Young Drivers to Safe, Inexpensive Vehicles
Some auto insurance companies will assign a specific driver to each car in the household. From the insurer’s point of view, a youngster in a sports car is a huge risk! It would make sense for Liam to be the primary driver on the old truck policy. Talk to your agent to see if that makes a difference on your premium.
Exclude Dangerous Drivers
Another way your insurer can help you get the best auto insurance deals is to exclude dangerous drivers from your more expensive policies.
Imagine our Liam is a bit of a stinker. At 17, he’s already had DUIs and speeding tickets. In that case, his parents probably aren’t helping him get into a Mustang. And Mom should keep him out of that Escalade. She can even exclude him on the policy. Of course, that means he can never, ever drive it. Because if he wrecks it, insurance will not cover it.
But that’s another way you can be proactive and make sure you get the best auto insurance deals: exclude dangerous drivers from the most expensive policies.
Now, if none of those things apply, you can still find good prices on auto insurance coverage. Let’s talk about full coverage versus minimum requirements and think about which auto insurance coverage is right for you.
Full Coverage vs. Minimum Liability Requirements
Every auto owner needs some auto insurance coverage. The type you need, and the amount of coverage you have, vary a lot from state to state and driver to driver.
What is Liability?
Nearly every state requires that drivers carry a certain amount of liability coverage. Liability means legally-enforceable financial responsibility.
For instance, if you accidentally back into another car in a grocery store parking lot, you are liable to pay for the damage you cause. People and property are valuable, and liability coverage exists to pay for damage you might cause to other people or their belongings.
The minimum liability coverage you need depends on your state laws, so check with your DMV to learn the state minimums. In some states, it’s called PLPD.
And remember, with the increasing costs of autos, parts, labor and medical care, you might feel more comfortable buying as much liability coverage as you can afford. This is especially true if you have assets at stake — like a home —that you could lose if someone sues you after an accident.
What is Included in Full Coverage Auto Insurance?
Full coverage auto insurance policies always include liability coverage, plus more. These policies help pay for damage or losses that can happen to your vehicle. Common auto insurance coverages include:
- Collision: this pays to repair your vehicle after a collision with anything, cars, fences, structures, etc.
- Comprehensive: this pays for other types of damage, not caused by a collision, like a fire, theft, or a falling tree.
Do You Need Full Coverage Auto Insurance?
If you have liens on your vehicle — if you make a car payment or took out a title lien — the lienholder will require that you have full coverage insurance. That makes sense, because if this vehicle gets stolen or “totaled,” they will lose a lot of money. In short, if you make a car payment, you probably need full coverage.
But if you own your vehicle outright, and make no payments, you can save a ton of money by buying only the minimum auto insurance required by your state. Of course, you’re accepting the risk that if the vehicle is damaged, you’ll be paying for repairs yourself.
Another way to save on car insurance is to address your deductibles.
Auto Insurance Deductibles in a Nutshell
Deductibles are amounts of money you agree to pay before insurance takes effect. For instance, if you agree to a $1,000 deductible, then after a wreck, the first $1,000 of repairs are your responsibility. You can save money on auto insurance by increasing your deductible, just be sure you’re comfortable with the amount.
In other words, don’t choose a $5,000 deductible if you don’t keep at least $5,000 in the bank at all times. And, know that lienholders may require you to have a lower deductible, like $500 or $1,000, those are common amounts in the industry.
Then there are bells and whistles that can be removed from your policy if you don’t need them or cannot afford them for a short while.
Other Coverages You May Not Need
As we mentioned above, if you have many vehicles in the family, you may not need rental car coverage. But if you only have one vehicle and need it to commute or care for the family, rental car coverage is a good idea.
Roadside assistance is another coverage that makes sense for some consumers, but not everyone. If you have several vehicles, a big social network or are mechanically inclined, you might not need this coverage. But many drivers feel better knowing they have access to tow trucks, locksmiths and the like.
Mechanical breakdown coverage can be valuable, but very expensive. And if your car is still under a manufacturer’s warranty, you probably don’t need it.
Now that you’ve identified the coverages you need, and gathered your VIN numbers and driver info, it’s time to discuss comparison shopping for auto insurance.
Technology has made it really simple for consumers to shop for the best value in car insurance. Just do an internet search for some phrases that apply to your unique situation, and let the quotes roll in. Expect to field a handful of phone calls from agents looking to earn your business and have your current policy handy.
What Should I Search for Online? Why?
Be as specific as possible when searching for the best auto insurance deals online. Try descriptive searches, like:
- Cheap auto insurance in [your state]
- Cheapest car insurance for homeowners
- Auto insurance deals for safe drivers
- Cheap auto insurance for drivers with tickets
- Cheapest auto insurance for young drivers
This way, you’ll get results for companies that are seeking your type of business. Every insurer has specific types of customers they prefer. In the business, we call this “risk appetite.”
Of course, they all prefer safe drivers. But some companies specialize in young, inexperienced drivers. Others prefer established adults who want multiple lines of insurance, like life insurance, motorcycle insurance, boat insurance and so on.
Remember that you might save on some or all of your insurance policies if you bundle them with one provider. However, it can be difficult to extract one policy or change companies if you are dissatisfied later.
One Common Mistake to Avoid When Shopping for Auto Insurance Online
Finally, let’s address the biggest mistake people make when looking for the best auto insurance deals: misrepresentation.
Know that all insurance companies share information through databases. If you have an unsafe driving record or a DUI, be upfront about it! An insurance company might not have an appetite for your unique risk, but they may have a subdivision or partner willing to work with you.
You’ll save time by not applying at companies who don’t want your business, and you’ll save money by presenting your information to the companies who do.