In 2018, the average cost of a car insurance policy was around $1056 per year. Of course, some people spend less than this on their car insurance, while others pay much more. If you need car insurance, you might feel some confusion as you begin shopping for it. How can you find the best car insurance price? How can you find the best car insurance discounts and savings? What should you look for when buying a policy? If you have questions like these, continue reading this guide to learn more about car insurance prices, discounts, and savings.
Insurance Companies Base Car Insurance Price on Risk Levels
If you want to buy car insurance, you might not understand how insurance companies calculate the rates they charge. If you have questions about this, you should understand that risk is the main factor that affects rates.
Risk is something an insurance company assumes when offering a person car insurance. They have the risk that the person might cause an accident, which leads the insurance company to pay the claim.
Because of this, insurance companies evaluate many factors about a person before offering a quote for car insurance coverage. Here are some of the factors they analyze before providing a quote:
Age
A person’s age affects their risk level. In most cases, younger drivers have the highest risks of any age group, primarily because of their inexperience behind the wheel of a car.
Older drivers might also be in a higher-risk category, as older people might also have a higher chance of filing claims on their policies.
Gender
Next, your gender affects your risk level. Male drivers tend to pay higher rates because they have a higher chance of filing a claim.
Location
Where a person lives also plays a role in risk levels. If you live in a safe area, you might pay lower rates than a person who lives in an area with a high crime rate.
Type of Car
Your vehicle affects your risk levels, too. As a result, insurance companies need to know your vehicle’s age, make, and model before offering a quote.
Insurance Coverage Types
The type of insurance coverage you request also affects your risk level. You will pay lower rates for less coverage.
You Can Control Some Risk Levels
When buying car insurance coverage, you should know that you have some control over your risk levels. While you can’t change your age or gender, you can control other factors.
For example, you can control where you live. Choosing to live in a safe community offers many benefits, including saving money on your car insurance.
You can also control how much you drive. If you don’t drive a lot, you might be in a lower-risk category than a person who puts a lot of miles on their car each month.
You can also control the type of car you own and the coverages you want on it. If you want to save money on auto insurance, choose a car with excellent safety ratings or an older vehicle.
You Might Want to Ask About Car Insurance Discounts
The next thing to know is that you can take advantage of some car insurance savings by qualifying for available auto insurance discounts. Almost all car insurance companies offer discounts, and you can ask about these.
Here are some examples of some discounts you might be eligible to get:
Low-Mileage Discount
As mentioned, many insurance companies charge lower rates for people who drive less. If you don’t drive a lot, ask the agent about their low-mileage discount.
Bundling Discount
If you combine your auto insurance with other insurance types, the company might offer a bundling discount. You can also get this if you insure more than one vehicle on the same policy.
Good Driver Discount
Some insurance companies provide discounts to good drivers. A good driver is a person who has not received any tickets or filed any claims within the past three years or so.
You can also look for other ways to lower your car insurance. If you can find discounts, you will pay less for your insurance coverage.
You Can Ask About Coverage Options
The next thing to consider is your car insurance options. What types of coverages do you need? Are there any you can live without?
The insurance company you purchase your coverage from will base the rates on the coverage types you ask for when you call. You can save money by choosing fewer coverage types.
For example, having liability coverage on your car is the most basic form of car insurance you can buy. Liability coverage protects other people, but it also protects you.
If you cause a collision that damages someone else’s car, your liability coverage pays the claim. Your liability coverage also prevents the injured person from suing you. If someone sues you, they can take your assets.
When you have a loan on your car or own a valuable vehicle outright, you might want more than liability-only coverage. In this case, you might want to add collision and comprehensive insurance to your plan.
Adding these coverage types will increase your premiums, as they provide coverage for your car if you cause an accident that damages it.
Performing a Car Insurance Comparison Might Help
The last thing to know is that you can perform a car insurance comparison to see the differences in rates. When doing this, you must contact several auto insurance companies.
When you contact them, ask them for quotes. The key thing to know is that you should ask for the same car insurance coverage from every company you call, so you can compare the quotes more easily.
Learn More About Buying the Best Car Insurance
If you want to pay the best car insurance price, you might need to call around to ask for quotes. Comparing quotes is the best way to see the differences in costs and savings.
If you have questions about buying car insurance, contact us to learn more about your options.
