CarInsurance.com recently completed research on auto insurance costs, identifying the cheapest auto insurance for various driver profiles and coverage levels. The analysis finds that drivers can save up to $1,127, on average, by comparison shopping.
When comparing rates, CarInsurance.com experts note the following differences between highest and lowest costs for the same policy:
· 153% difference ($497 annually) for state minimum liability coverage
· 138% difference ($1,127 annually) for full coverage auto insurance
“Comparison shopping is one of the most effective ways to save on your car insurance,” explains Michelle Megna, editorial director of CarInsurance.com. “That’s because no two companies charge identical amounts for the same policy.”
Megna recommends comparing car insurance quotes to find the lowest rates at least once a year -- but certainly at times when your rates are most likely to change dramatically:
· Purchasing a car
· Putting cars on a multi-car insurance policy
· Adding or removing a driver from a policy
· Marriage or divorce
· Moving
· Adding a teen driver
· Buying a house
· DUI or major violation
· Accident
· Change in credit score
The research results provide rankings relevant to drivers with clean records, as well as those with special circumstances, such as having bad credit, recent accidents or moving violations.
I had a chance to interview Penny Gusner, consumer analyst, to learn more.
How often should people comparison shop for insurance?I recommend people shop at each renewal period, which is typically every six months, but if that isn’t possible that at least once a year. Other times to shop around are when people need to make changes to their policy, such as adding a car or driver, taking off a driver, adding a teen driver to the policy or changes to the coverage limits or deductibles. Also, comparison shop if there are major life events that have taken place, such as getting married, getting divorced, buying a house, experiencing a dramatic change in your credit score – your rates could change based on these items.
What factors affect insurance costs?Factors that affect car insurance costs vary by what state laws allow and companies internal guidelines, but the common risk factors include:
· Geographical location
· Age
· Gender
· Marital status
· Years of driving experience
· Driving record
· Claims history
· Credit history
· Previous insurance coverage
· Vehicle type
· Vehicle use
· Miles driven annually
· Chosen coverages and deductibles
Why do costs vary so widely between insurers?Comparison shopping for auto insurance is so important because premium rates vary so widely. The reason for the different rates is that each insurer weighs the rating factors differently. That is why various car insurance companies can come up with different premiums for the same person. Insurers look into their own internal claims data as part of this process as well. For instance, one provider may have fewer claims for your model vehicle, and in turn, offer a lower rate than another auto insurer. Basically, one insurer may find you, your vehicle and other rating factors as posing less of a risk, so will offer you a lower rate than one that finds you to be a higher risk. Also, rates are based on what the insurance companies file with the state, and if you have a black mark on your record, it may affect you more with one than another, for instance one company may surcharge (raise your rates) by 10% for a traffic infraction while another will do it by 15%.
What are some ways that people can make sure they're getting the lowest rates?Insurance companies don’t share their internal calculations for rates with the general public so the best way to find out what insurance company is cheapest for you and your specific rating factors is to get quotes from multiple companies and find the best fit. Comparison shopping is really the only way to make sure you’re getting the lowest rates. I’m an expert in the field and it’s what I do at every renewal, compare rate quotes and make sure I’m getting the best deal for the needs of my family.
Tips on how to maximize savings are included in the full report: https://www.carinsurance.com/cheapest-car-insurance.aspx
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