Auto Insurance: What to Consider Before Choosing One

Auto insurance is required by law in California and should only be purchased after doing adequate research. Many factors affect the type of insurance that is right for any given individual. If you are financing a vehicle you will need full coverage, otherwise the types of coverage are more flexible.

It can be time consuming narrowing down the best auto insurance policies, but comparing different insurance companies is essential to finding the best policy for your situation.

The following tips will help you research auto insurance policies:

  • Driving Record
    All insurance companies have access to the same driving record information, yet they each set different rates based on your driving record. That’s why it’s important to keep your driving record as clean and updated as possible. Your insurance rates may skyrocket if you have caused an accident or are convicted of driving under the influence of alcohol. A DUI can even lead to the cancellation of your insurance policy. Speeding tickets and reckless driving can also have an adverse effect on how much you pay.

    Your driving record is an indication to the insurance whether or not you are a high risk driver. Insurance companies favor drivers with clean driving records because it’s an indication of lower risk. Driving violations can have a serious impact on insurance rates depending on the seriousness of the violations and how many appear on your driving record. Marks can stay on your record and keep rates high for up to three years. The wide variance in insurance rates is partly due to how each company measures risk.

  • Your Stats
    Age, gender and type of vehicle you own factor into your auto insurance rates. People under 25 statistically have a higher risk of getting into an accident, so rates are higher for young people. The fewest accidents occur between the ages of 50 and 65, which is when you’ll likely pay lower rates.

    Since men get into more accidents than women, men are likely to pay higher rates than women who are the same age and drive the same type of car. Usually more expensive new cars cost more to insure than cheaper used cars. Most states no longer allow insurance companies to consider your credit score as a factor. Your rates will also be affected by the amount of miles you drive per year.

  • Comparing Plans
    Insurance companies are competitive which is why it’s essential to compare plans online. Each insurance website may take several minutes to provide information, but it’s worth the time since savings can be dramatic. With a clean driving record, shopping for a good deal on auto insurance should be easy. Avoid putting more than one name on a vehicle, which will raise the premium. Different providers place different rates on areas based on neighborhood crime rates.

    Another consideration is what happens if you do get into an accident. Which policy will provide the best coverage? You pay the deductible, then the insurance company covers the rest. Ask yourself how much property damage liability you need.

    There are actually hundreds of factors that determine how your insurance rate will be calculated, depending on the company, your age, location, vehicle and driving record. If your make and model has been the subject of many accidents in your geographic area, it could increase your insurance rates due to higher risk. Claims history of a certain type of vehicle can affect insurance rate quotes. The reverse is also true: if your make and model has a history of safety, it can help you get lower rates.

    The reason it pays to shop around for insurance is that research shows that for any given individual, rates can vary by thousands of dollars per year, depending on the provider. Since there are hundreds of companies to choose from, it’s best to compare as many prices as possible.

  • Alternatives to Driving
    Driving less will help drive your auto insurance rate lower. Choosing less sporty car models to drive also helps. Most people do have access to some form of transportation in their communities, whether it involves buses, trains or carpools. Even reducing your driving one or two days per week can help lower your insurance rate.

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