How to Get Cheap Car Insurance

By Brad Huntington

In addition to being required by most states, a vast majority of people cannot afford to not have auto insurance. If your car were totaled tomorrow, would you be able to pay off your existing loan (if you have an outstanding loan balance) and replace your automobile?

For most people, this would be a crippling blow. Just because you need auto insurance, doesn't mean you have to pay an arm and a leg for it. The main goal is to pay the lowest premiums possible for the coverage you desire. But be careful! If you get a rate quote that is too good to be true, then it probably is. Make sure that any car insurance company that you select has good ratings as you want to make sure that they will be there when you actually need them.

Most insurance companies look at several factors when determining the premiums that you will pay. Among them are gender (men usually pay more), age (younger people usually pay more), marital status (single people usually pay more), vehicle classification (sports cars can have higher insurance rates than family sedans) and distances driven (the more you drive, the higher likelihood of an accident and the higher your rates). Below is a list of several things that you can do to help alleviate the sting of writing those premium checks to your auto insurance company.

• Shop Insurance Rates - Not all insurance companies are created equal. If you shop around, you'll find that their quotes aren't equal either. As a general rule of thumb, it is a good idea to get quotes from at least three insurance companies before you sign up for a policy. In 2004, Progressive Insurance conducted a study of more than 100,000 consumers in the United States. Their findings were that the rates for the exact same coverage can vary by more than $500 for a six month coverage period.



• Ask About Discounts - Make sure you get all of the discounts on your auto insurance policy as you are allowed. For example, if you have multiple policies with the same insurance company (i.e., car insurance and homeowners insurance), you are normally entitled to a discount. You can also oftentimes get discounts if you have completed defensive driving classes, are a member of a particular association (your college, a professional organization or even your employer), are a good student or have been a good (loyal) customer for longer than a year. The bottom line, ask your insurance agent for all the discounts that you might be entitled to.




• Raise your Deductible - When you get in an accident, you must normally first pay some set deductible before the insurance company kicks in and covers the rest. The higher your deductible, the less the insurance company will have to pay if you get into an accident. By raising your deductible, you can lower your annual insurance premiums.




• Improve Your Credit Score - While you may not see the correlation here, insurance companies like to insure people with good credit. If you have credit problems, your automobile insurance premiums are likely higher than someone with good credit. If you are getting ready to shop for a new policy, it might be a good idea to first have your credit report pulled to see if there are any ways that you can improve your credit score before applying.




• Drive Safely - Perhaps one of the easiest things for most people to do to lower than car insurance is to simply get in the habit of driving safely. If you have a lot of speeding tickets and accidents, you are going to pay more for insurance than someone who has no tickets or accidents. You'll find that insurance companies are quick to raise your annual premiums when you get nabbed for speeding or are the cause of a traffic accident.

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