Comparing car insurance: What to know
When comparing car insurance rates, it helps to know how insurance companies arrive at the quotes they give to you. Along with the type and amount of coverage that you choose, your auto insurance rates depend primarily on a number of personal factors including your driving record, your age, your credit history, your vehicle, and the risk level of your area. Insurance companies’ weighting of these attributes is reflected in your premium. For example, having a limited driving history or a poor credit score can raise your rates dramatically.
This unbiased guide — written by The Zebra’s insurance experts — outlines the factors that comprise car insurance premiums and provides tips to help you compare quotes and find the right car insurance policy.
Why insurance comparison shopping is important
While drivers pay an average of $1,529 per year for auto insurance, your individual rate may be significantly more or less. Auto insurance companies use varying methods to underwrite policies. This means that the auto insurance rate you are quoted might not match your quote from a competing company. However, you can expect that your individual driver profile is one of the primary factors used to determine how much you’ll pay. Complicating matters even further, car insurance quotes can fluctuate depending on trends in the wider insurance market. Because of the many variables at play, the best way to find car insurance is to compare auto insurance rates from a number of companies.
While shopping around can lead to affordable car insurance for all drivers, this is especially important for those with a poor credit history or who lack a clean driving record. Rates for such drivers are already higher on average, even for the minimum coverage required by your state.
How to compare car insurance policies
Now that you understand what contributes to your car insurance premium, let’s talk about how to shop for car insurance. First off, you need to decide on what’s most important to you in a policy. Is affordability top of your list? Are you dead set on having a responsive and courteous customer service team? Do you prefer having the highest level of coverage to keep you and your assets protected?
Ideally, you will find a policy from a company that can provide all of the above. To do that, follow these steps for comparing car insurance policies.
1. Gather some personal information
Unless you want to spend a significant amount of time talking to an insurance agent, you’ll need to make sure to have certain pieces of information ready when you begin your car insurance shopping process.
What you need to start a policy
- Personal information of anyone on the policy, including date of birth, driver’s license number, and address (if different from your own)
- Driving history of all drivers on the policy
- Insurance history of all drivers on the policy
- Vehicle information of all vehicles on the policy including VIN
- Payment: If you’re getting a policy for the first time, the insurance company will likely require a down payment before the policy is bound (accepted)
2. Get quotes
This used to be the most tedious part of the insurance buying process. It required customers to contact an agent or multiple companies in order to get enough quotes to make a comparison. Nowadays, auto insurance comparison sites – like The Zebra – make this quick and easy. Input your information to get a number of quotes from top insurers.
Compare the policies not only by price, but also by the level of coverage they provide. A cheap policy that doesn’t provide sufficient coverage isn’t often worth considering. Narrow in on a few carriers who offer affordable policies with the coverage options that meet your needs. For more on how to find out how much car insurance you need, consult our informative guide.
3. Compare car insurance company reputation
With quotes in hand, now is the time to dig into which individual carrier will provide the best overall policy and customer experience. To begin, consult customer ratings from trusted sources such as J.D. Power and The Zebra customer survey. You can also use the National Association of Insurance Commissioner’s (NAIC)[1] website to look up a company’s complaint trends. Reviews from third-party sites and the Better Business Bureau can also give you a good idea of what to expect as a customer of these companies.
Once you have an idea of overall customer satisfaction, revisit your short-list to decide on the carrier – and policy – that is best. The level of customer service you can expect could very well be what tips the scales in favor of one company over another.
Is it bad to get multiple insurance quotes?
Insurers in most states use credit as a rating factor, but getting car insurance quotes has no impact on your credit score. When putting together your quotes, car insurance companies only run a soft pull on your credit, which does not have any effect on your credit. Therefore, getting quotes from many different insurance companies is highly encouraged in order to get the best rate.
While you might want to finish shopping for car insurance coverage as quickly as possible, it’s essential to do your due diligence and find the right company. At the end of the day, car insurance is designed to protect you and your assets. If you were to be injured or have your car totaled in an accident, your insurer’s customer service and claims satisfaction would be vital.
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What are the best car insurance comparison sites?
In your search for auto insurance, you may choose to use an online insurance comparison site to avoid the tedious task of going through the quoting process of many different companies. Much like The Zebra’s comparison tool, these sites request your personal information to generate your quotes and help you shop for your next policy. However, not every comparison site keeps your data secure — and in many cases, lead generation sites will sell your data to insurance companies, who will contact you relentlessly in pursuit of your business.
If you want to avoid spam emails, texts and phone calls, it’s in your best interest to find out how your information is handled before submitting your contact info for online car insurance quotes. A site that generates real insurance quotes without selling your information is the best way to get affordable insurance without sacrificing your sanity. Unfortunately, most of the quote comparison sites online use a lead-gen model, so exercise caution before offering up any personal information.
Lead-generation sites
Some insurance quote sites make money by selling your information as leads. This can result in an increase in spam and unwanted contact from numerous sources. Below is a list of known lead generation sites:
- ValuePenguin
- InsuranceQuotes
- NetQuote
- EverQuote
Other insurance comparison sites
Other popular insurance comparison sites include Nerdwallet, Compare.com, Insurify and Gabi. Be careful in your search, however, as some sites claim to have no-spam policies, but partner with lead generation sites for insurance quotes.
The Zebra has a pledge to not sell your information to spammers. In fact, we don’t ask for your phone number when you get a quote, unlike many comparison sites, and offer personalized quotes from more than 100 insurance providers. The Zebra also operates an in-house insurance agency to guide consumers through the process of obtaining coverage from only the best car insurance companies.
Compare car insurance rates by age and insurance company
As drivers get older, their car insurance rates typically change as well. This has to do with how insurance companies assign risk to drivers of varying ages. For example, young drivers are considered a greater risk to insure than drivers in their 40s, 50s or 60s.
Teen drivers
If you have teenage dependents — or if you’re a teen driver yourself — you know insurance is expensive. In many cases, adding a teen to your car insurance plan can nearly double your premium. Insurance professionals often suggest increasing the amounts of your liability coverage limits or seeking out an umbrella policy to safeguard against any unforeseen issues[2].
Of the most popular car insurance companies in the U.S., Travelers, American Family and USAA are the most affordable insurance companies for teen drivers.
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