Shop Around

Many people are paying over the odds every year on their car insurance, simply by sticking with the same company. Your current insurer may be giving you a good rate, but they may also be taking advantage of your loyalty by increasing premiums. Searching around for different quotes will give you a better picture of what your current insurer is charging and do forget you are never tied down to a company, looking elsewhere will cause no harm. The best thing to do when shopping around for new quotes is to visit a comparison website; these are kind of like insurance shopping malls with every insurer in one place. By inputting a few necessary details (age, state, type of car, etc) you will be supplied with dozens of quotes from different insurers – many of which will offer lower rates than your current provider.

Many insurers will also offer to beat any like-for-like quotes, use this to your advantage when shopping around, especially over the phone – it can lead to excellent savings.

Taking Out Other Policies

Many modern insurance companies specialize in various different types of cover, for instance, pet, fire, home and health insurance. They will be keen to reward anyone that chooses to take out another form of cover alongside the car insurance; these rewards are generally provided in the form of discounts. Savings achieved can be as high as 30%, which on a $1500 quote amounts to $450 in savings, pretty significant!

Good Driver Discount

You will be surprised at how much being a good and careful driver can save you on your car insurance. Policy providers will look upon good drivers as a “safe option” – in other words – not likely to cost them any money in payouts. Because of this they will offer reduced rates. In most states, a “good driver” will be someone that has held a license for over three years and had no more than one violation during that time.

Profession Discount

Many people are unaware that profession can land them with a hefty saving on their car insurance. Discounts are given to various professional groups, such as: Scientists, engineers, doctors and members of armed forces. Include your profession on a comparison website and watch the watch the dollar’s fall off quotes!
 

If there's any good news in this it's the fact that you can indeed clean up your record. No matter what you've done in the past it's always possible to rectify and do better in the future.  That means if you start driving safely and responsibly today, in a matter of just a couple of years you can have a clean driving record and better insurance rates. That said, let's talk about insurance pricing if you have bad record.

Accidents and Minor Violations

Chances are that a minor accident and a minor violation or two are not going to cause your insurance to go up by all that much; maybe $25 or so every six months. But accumulated accidents and major violations are another story.

Beginning with the accidents, remember that every time you have an accident claim you are costing your insurance company. If the cost of your claims exceeds the amount of money you pay in premiums your insurance company will raise your rates to recoup their losses. It's for this very reason that many people choose to pay for minor accidents out of their own pockets.

As an example, suppose you backed into a car across the street while leaving your driveway. Your bumper may only cause a couple of hundred dollars damage to the door of the other vehicle, but it might be better for you simply to pay that bill in cash rather than file an insurance claim. Doctors are one group of people that know this principle well as evidenced by the fact that they are among the most likely to have car accidents yet also the most likely pay for them out of pocket.

Major Violations

When it comes to major violations such as speeding tickets, leaving an accident scene, or DWI, you're likely to see much more drastic insurance rate increases. For especially egregious offenses you could quite possibly be thrown into a high risk pool which could potentially raise your insurance rates by 50% or more. If this is the case you will stay in the high risk pool until your record is clean.

If you already have a clean record you aren't concerned with looking for cheap car insurance for bad drivers. The best thing you can do to keep it cheap is avoid tickets and crashes; the two things most likely to increase your price. You should also be careful to make sure that all of your payments are made on time. When you miss a payment it goes against your credit score and that can also increase your rates.
 

So the first step in buying car insurance is to work out what coverage you really need.  These days, most companies will give you a policy that’s absolutely tailor-made for you.  All you have to do is ask.  If the company you insure with now doesn’t want to do that, it’s time to shop around. 

There was a time when there were only a handful of big insurance companies and they all offered more or less the same product at the same rate, but the industry is no longer like that.  Today there are hundreds of small insurance companies and insurance brokers, many of them operating exclusively online and thus avoiding many of the overheads that their clients would otherwise be paying for through their premiums.

As with anything else, before you set out to buy car insurance, you should spend a little time learning about how it works.

Find out the Facts

To get the best deal in car insurance, you need to understand how insurance companies calculate the premium they charge you.  Although there may be variations between companies, the major factors are more or less the same and will generally include the following criteria:

• the state and local area you live in.
• your age and marital status and possibly your employment status.
• your driving history, especially accidents any convictions.
• the make, model and value of the car you want to insure.

Why is the state you live in important?  That’s because the requirements for insurance vary from state to state.  While all states require some sort of insurance, this is usually pretty basic and it is up to the car owner to choose whatever additional coverage he requires.  Of course each of those add-on extras will incur an additional premium.  This is why it is important that you first decide exactly what cover you need before you set out to buy insurance.  Depending on your circumstances and other factors such as the age of your car, you may be better off taking out only the minimum coverage required by your state.

If your car is more than about five years old, its replacement value may be so low that it’s not worth paying for comprehensive insurance.  So look very carefully at how much comprehensive insurance will cost you over the next few years and ask yourself if it would be more cost-effective to carry the risk of writing it off yourself.

Choose Carefully

Most insurance companies will charge similar rates for the most basic insurance, but it’s when you start adding on extra coverage that the difference between companies becomes important.

These days the internet has made it very easy to shop around and compare the various policies on offer.  There are a number of excellent websites which will make the comparison for you.  All you have to do is enter your details and the details of the vehicle you want to insure and the site will present you with a number of different options and the cost of each of them.

Of course it’s important that you don’t simply take this information at face value.  It’s essential that you check any proposed premium very carefully to make sure that it is giving you the coverage that you need – and also that you’re not paying for coverage you don’t need.

Another factor that is important is not choosing your insurance company but choosing your car.  Next time you are buying a car, first check out which makes and models are the cheapest to insure.  Just having the right brand of car may cut your insurance premium by up to a half, and you may be surprised by which cars attract the lowest premiums.

Demand your Discounts

There are a number of things you can do to minimize the premium, even once you’ve decided on a company.  Some of them are:

• pay the full premium up front instead of monthly; in this way you avoid paying the cost of providing credit.
• if you drive only very low mileage – usually below 7,500 miles per year – you will qualify for a discount with many insurance providers.
• if you’ve taken a safe driving course within the past three years, insurers in many states may give you a 10% discount.
• if you are insuring more than one vehicle, you’ll get a huge discount, so think about transferring family cars into one name.
• make sure you get a quote from the company which insures your house; having more than one insurance policy with a company will always earn you a healthy discount.
• if you belong to any kind of group – a union or professional association, a sports club or even a group of employees in a company – insurance companies may be prepared to give you a generous group discount if a large number of people insure together.
• some companies may even give discounts for evidence of stability, such as being a straight "A" student or having been in one job for many years.

What’s important about all these discounts is that you will probably need to ask for them, so don’t be shy; many insurance companies will not offer these discounts without prompting.

Another factor that will affect the insurance premium you pay is the level of anti-theft devices your car has.  If it has sophisticated protection either factory-built or retrofitted, the insurance company may agree to lower the premium because of this.  The same applies to safety equipment: if your vehicle is fitted with automatic seat belts and up-to-date airbags, this may also attract a discount.  Before you speak to an insurance company you should think about the principle of insurance:  it’s all about risk and anything that you can do to demonstrate that you or your vehicle carry a low risk will help to keep your premium down.

Of course it goes without saying that insurance companies will give you a lower premium if you have an unblemished driving record.  So be sure to mention if you’ve never had an accident or if you’ve never been ticketed for a driving violation.  All of these things are positive factors when it comes to assessing the level of risk you present as a driver.

Be Persistent

Even if you have a bad credit rating, a poor driving record and a history of insurance claims, don’t give up.  All insurance companies have their own refinements of the risk assessment process and, although you’re going to pay a higher premium because of your risk factors, some companies may assess them differently.  So even if you’re aware of being a poor insurance risk, it is still worth shopping around for the companies which will give you the best rates.
 

Searching through numerous quotes for car insurance for young drivers often makes something immediately apparent. Much of the time, insurance premiums can cost more than the car being insured. Insurance companies love nothing more than an experienced driver with many years of clean driving, both in terms of their license and their insurance. However, sometimes this is simply not possible, especially in the case of younger car owners. While it can be difficult to find cost-effective cover, there are a number of ways of reducing premiums.

Be Modest When Selecting the First Car

Younger drivers dream of driving sports cars or high end executive models. However, this is rarely a good idea. Most drivers advise those who have recently passed to drive a smaller car for the first year to allow them to get to grips with driving alone. Aside from the technical aspects, insurance companies will often not even insure more powerful cars until the driver has more of a history. Those that will often charge extremely high prices, so it is prudent to set expectations for a first car at the lower end.

Tailor the Level Of Cover

By following the first tip, many young drivers will have cars of relatively low values. If this is the case, then the amount paid to cover the car may be higher than makes sense, as replacing the car may often work out cheaper. All insurance needs to cover the driver against damage to other vehicles, but certain policies do not require specific cover on their own car.

Pay Up Front

Most insurance quotes are worked out on an annual basis and it is almost certainly best to pay the full amount up front. This is particularly true of younger drivers as premiums are higher and the charges for paying monthly are often calculated as a percentage. While it is not always possible to pay a lump sum, the savings can be immense. If it is impossible, then consider paying anything more than a month at a time, such as quarterly or every six months. While neither option is ideal, both offer better value than monthly payments.

Consider Additional Training

Every driver must pass their basic test and no insurer will offer cover to someone who hasn’t done so. This means that most publicized prices are based on passing only the main driving test. However, it is possible to undertake additional courses, in the form of defensive or safe driving tests. Passing these tests provides verifiable proof that the driver is more competent than average, regardless of their age, and generally leads to reduced premiums.

Finding reasonably priced car insurance for young drivers can be an extremely difficult task. They have so much working against them in the eyes of the insurance companies that costs can often be prohibitive. However, a little extra effort or planning can often result in excellent savings. With premiums being as high as they are, every little helps when it comes to reducing them.
 

The Coverage You Need

The cheapest car insurance across the board is that which only covers the minimum amounts required by your state. For example, New York requires drivers to carry minimum coverage’s for bodily injury, property damage, and uninsured/underinsured motorists (UM). Since every driver in the state must carry it just about every insurance company will charge the same for it. But it doesn't cover you against damage to your own vehicle; only the damage you cause someone else.

If you're driving an older car on which you owe no money, this minimum insurance policy might be a good option for you. With little or no investment to protect, minimum liability is the epitome of cheap car insurance. If you still have an outstanding loan you won't be able to go this route without violating the terms of your loan agreement.

Down Payment Options

It goes without saying that if you can pay for your entire insurance policy up front you will pay the lowest total cost over its term. But that's obviously not an option for everyone. Therefore, you might be looking for an insurance policy with no down payment required. These aren't as easy to find as those with low down payment requirements, but they are out there. Typically a no down payment policy requires monthly payments which will be due beginning in the first full month after you get your policy.

Understand that when you purchase insurance this way the insurance company is also charging you a finance charge for the privilege of paying monthly. Also be aware that these types of payment plans usually only apply to minimum liability policies. It's going to be difficult to find an insurance company providing you collision, comprehensive, and glass coverage with no money down. It's too great a risk on their part.

Cancellation for Missed Payments

Depending on your state, you may be subject to very stiff regulations regarding cancellation for missed payments. Using New York again, they are a state showing very little mercy. Your policy will be canceled, in most cases, at midnight on your due date if payment is not received by then. You'll then have 10 days to surrender your plates and registration, or prove that you have other insurance in force.

That means for a cheap car insurance policy with no down payment, you're likely to have 8 to 10 deadlines to meet every year. If you can at all afford quarterly payments or payment in full, you'll greatly reduce the likelihood of a cancellation.

Did you know that the average cost of car insurance varies from one state to the next? It's true — even among identical policies with the same company. For example, your brother in New Mexico might pay $800 annually for his policy while you pay $700 for the same policy, with the same company, in Kentucky. Some of the price difference relates to population density, weather, and certain age and sex demographics. But the largest contributing factors to price differences at the state level are regulations and taxes.

According to statistics from 2008, the highest average cost of car insurance in the United States was not actually found in a state; it was found in the District of Colombia. Following Washington DC were Louisiana, New Jersey, Florida, and New York. All of the top five have peculiar circumstances associated with them that cause high insurance rates. Beginning with Washington DC, car insurance is costly their because of a very high population density, a higher rate of accidents per capita, and a higher rate of car theft.

The following chart is based on the latest data from the National Association of Insurance Commissioners on 2006-2008 premiums.

State 2008 Average Expenditure 2008 Rank 2007 Average Expenditure 2007 Rank 2006 Average Expenditure 2006 Rank Alabama  $667 32 $684 31 $684 34 Alaska $904 12 $923 13 $955 11 Arizona $858 14 $873 14 $913 14 Arkansas $653 38 $660 36 $684 34 California $776 20 $809 19 $843 16 Colorado $729 23 $738 24 $785 23 Connecticut $950 9 $964 10 $981 10 Delaware $1,007 6 $1,012 7 $1,024 8 D.C. $1,126 1 $1,140 1 $1,164 1 Florida $1,055 4 $1,043 5 $1,069 5 Georgia $765 21 $782 21 $788 22 Hawaii $816 18 $837 16 $853 15 Idaho $562 47 $564 47 $577 46 Illinois $720 27 $723 26 $740 27 Indiana $612 42 $618 42 $631 41 Iowa $519 50 $518 50 $536 48 Kansas $576 46 $568 46 $579 45 Kentucky $699 29 $720 29 $739 28 Louisiana $1,105 2 $1,096 3 $1,094 3 Maine $600 43 $611 43 $634 40 Maryland $922 10 $933 11 $949 12 Massachusetts $903 13 $981 9 $1,042 6 Michigan $907 11 $928 12 $925 13 Minnesota $698 30 $721 28 $753 25 Mississippi $654 36 $680 32 $746 26 Missouri $657 35 $658 37 $673 35 Montana $667 31 $666 33 $661 36 Nebraska $547 48 $554 48 $584 44 Nevada $970 8 $1,000 8 $1,006 9 New Hampshire $727 25 $750 23 $793 21 New Jersey $1,081 3 $1,104 2 $1,152 2 New Mexico $728 24 $730 25 $737 29 New York $1,044 5 $1,047 4 $1,083 4 North Carolina $595 44 $591 44 $596 42 North Dakota $503 51 $512 51 $530 49 Ohio $617 41 $628 41 $654 38 Oklahoma $663 33 $646 39 $659 37 Oregon $727 26 $723 27 $726 30 Pennsylvania $817 17 $820 17 $832 18 Rhode Island $986 7 $1,017 6 $1,038 7 South Carolina $751 22 $762 22 $756 24 South Dakota $520 49 $534 49 $554 47 Tennessee $641 39 $649 38 $654 38 Texas $854 15 $808 20 $820 20 Utah $709 28 $697 30 $702 31 Vermont $653 37 $662 34 $687 32 Virginia $663 345 $661 35 $685 33 Washington $840 16 $841 15 $839 17 West Virginia $808 19 $819 18 $827 19 Wisconsin $581 45 $582 45 $590 43 Wyoming $632 40 $631 40 $639 39 United States $789 NA $795 NA $817 NA

At first glance it would seem as though Louisiana should not be so expensive due to their demographics. But you have to remember how many vehicles were lost as a result of Hurricane Katrina in 2005. Three years later insurance companies were still paying out claims; claims that will take them years into the future to recover from. As a result, everyone's rates went up to help mitigate some of the losses.

In terms of New Jersey and New York, regulation and taxes are killing them. Even though state governments claim they don't tax insurance policies, the fact is they do. Any "surcharge" or "fee" charged by the state government is a tax, regardless of what that state wants to call it. Furthermore, both states have a tort system based on the "no-fault" model. No-fault insurance automatically lends itself to higher premiums because insurance companies have no hope of avoiding payments — even if an accident is someone else's fault.

Finally, Florida is also fairly high due to population densities in Miami, Daytona, Tampa, and Orlando. While there is a lot of wide-open space in that state, these four cities account for the greatest concentration of residents. Furthermore, accident and theft rates in the Miami area affect all the state's drivers. And while we’re at it, don't forget the number of seniors that retire to Florida in their older years. All of these things add up to make Florida a state with a fairly high accident rate.

There are certainly a lot of other things that go into determining how much you pay for car insurance. But the average cost of car insurance by state clearly demonstrates there are some trends that affect every driver, regardless of where he or she lives. Like it or not, there are just some states where the annual cost of living is disproportionately high. Hopefully you don't live in one of them.

However, not all car insurance companies are equal and the reason for low prices may not always just be a good deal. Sometimes costs are cut in important areas, either in terms of cover or service. All drivers can look out for certain potential issues when choosing their cover.

•    Is the insurer reputable? Some smaller insurers take advantage of the exposure granted by price comparison sites to get their deals in front of large numbers of potential customers. However, their lack of experience can count against them – the low premiums may not be sustainable. There are certainly deals to be found with previously unknown insurers, but it is well worth finding out more about them before signing a contract. This can be done in numerous ways, but one of the most reliable is the state’s department of insurance website. Every state has one and usually lists complaint rates for every registered company in the form of the number of complaints received for every thousand claims.

•    Does the insurer work with reputable workshops? Even larger insurers can occasionally work with workshops that drivers would not personally choose. A good insurer will acknowledge that the work undertaken reflects on them as well as the shop itself, and will not look to cut costs extensively. However, for the most peace of mind, it is best to enquire as to which workshop is used, or whether there is a choice. Further background checks can then be done on the insurer’s partners.

•    Can the company offer further discounts? As would be expected, discounts make up a large part of finding the cheapest quote, but there are many types to consider. Drivers should consider whether their discounted rate is for new customers only or whether it will continue in the future. Drivers should also enquire as to whether the insurance company covers other things. By combining home insurance with car insurance, drivers could save even further off both policies.

•    How does the insurer operate? Large insurers’ work 24/7, offering support and assistance every hour of the day. Some smaller companies simply do not have the resources to do so. Both can be liable to slow claims processes either again due to resources, or due to their own policies. As part of the background checks on an insurer, it can pay to look into genuine testimonials from customers to get a feel for how the company treats its customers when the contract has been signed.

Car insurance companies are as diverse as the drivers that use them. Those looking for a new policy should not simply rely on reputation or select the first name that comes up on a comparison site. A little time spent carrying out some independent assessment can lead to greater savings and a good relationship for a long time to come.
 

Clean Driving History

One of the best ways to keep your car insurance premiums at a low level is to keep your driving history and claims record clean. Insurers base their premiums on the relative risk they perceive you to be to them. If you make claims for accidents or have a history of traffic and driving violations, particularly DUIs, then you will be considered as a high risk driver and your vehicle insurance costs will be correspondingly high.

By increasing the amount of your deductible (the amount of money you are prepared to pay yourself in the event of an accident or other incident) you can significantly reduce your annual car insurance premium. Cheap car insurance is achievable the higher the amount of the deductible that you are prepared to pay for. Do remember when setting the level of the deductible that it applies per claim and not per year.

Shop Around for Your Car Insurance

It should go without saying that shopping around for car insurance is a great way to get cheap car insurance. Instead of automatically renewing your vehicle insurance policy with the same provider every year, use online insurance comparison websites to obtain comparative quotations. Remember to make sure that you’re comparing like with like and to read the small print and any disclaimers.

Getting Lower Premiums

1.Insurers will usually offer lower premiums if you can restrict your annual mileage. To lower your annual mileage figure, consider using public transport or a car-sharing scheme. Using your car a bit less will not only help to reduce pollution and traffic congestion on the highways but it will also enable you to get cheap car insurance. Win, win!

2.Make sure that your vehicle is fitted with security devices and that its alarm is functioning. These types of security features not only help to protect your vehicle from theft but also enable you to get cheap car insurance.

3.If you run more than one vehicle in your family, shop around for multiple vehicle policies that usually offer substantial discounts if you insure all your vehicles with the same provider. Cheap car insurance for your entire fleet!

4.When it’s time to buy a new car or trade in your old one, consider carefully the type of vehicle that you are going to buy in order to get a cheap car insurance deal. What you drive greatly affects your car insurance premium. High performance, sporty cars attract higher insurance premiums than do more ordinary, modest models. Unless your pockets are deep, you may need to revise your motoring aspirations!

Consider carefully too how much cover you actually need. Obviously you are required by state law to carry a certain minimum liability insurance coverage for your vehicle but do you really need collision or comprehensive cover? If your car is old, the extra you will need to pay for this additional coverage may not be worth it. Consider opting out of the medical expenses portion of car insurance if your health insurance coverage is sufficiently adequate because you may in effect be paying twice for the same cover.

Cheap car insurance really is easily achievable if you shop around and do your homework.
 

Step 1. Know your State and Personal Requirements State law varies around the union and different states have different minimum liability coverage requirements. Anything over and above those minimum requirements is effectively an optional extra that you don’t necessarily have to pay for. But you need to bear in mind the area in which you live. If you live in a relatively high-risk area for vehicle crime, then you may want to consider taking out a comprehensive car insurance policy that will cover you for vehicle theft or an act of vandalism. If your car is leased then you will likely be required to take out collision coverage insurance in addition to basic liability insurance. This will cover you in the event of an “at fault” accident. Calculate your own personal annual mileage too, because lower car insurance premiums are often available for relatively low annual mileage figures.

Step 2. Shop Around Don’t be tempted to renew your annual car insurance every year with your existing provider. Whilst this may seem to be the simplest option, you may be paying over the odds for add-ons or coverage that you really don’t need. Read the small print of your policy carefully to determine if this is the case. Make a note of the coverage that you actually need and ask your insurance provider to review your quotation. Using the same details, use an online car insurance comparison website to obtain several quotations from different insurance companies. Always make sure that you are comparing like with like and don’t be automatically tempted to go for the cheapest quote. Using an online comparison website is a quick and easy way to shop around for cheap car insurance.

Step 3. Increase your Deductible The deductible is the amount of money that you are expected to fork out yourself in the event of an accident with collision or comprehensive car insurance. The higher the deductible you are prepared to foot yourself, the lower the risk to the insurance company and so the lower your vehicle insurance premium will be. It’s a matter of weighing up the pros and cons of a greater financial risk to yourself versus a lower annual car insurance premium. Remember that the deductible applies per accident, not per year.

Step 4. Pay in Full If you can afford to do so, it is usually worth your while to pay for your annual car insurance in one hit. Many insurance companies offer terms so that you can spread the cost throughout the year of your premium, but in the long run you will end up paying more for this credit facility than if you were to pay the whole lot in one lump sum.

Step 5. Stay Clean! Keeping a clean driving history with no traffic violations, no accidents and hence no claims is the best way to ensure that you get the cheapest car insurance possible. A driver with a history of accidents or violations is seen as a high risk to insurers and they will charge you accordingly.