Car insurance premiums vary from one company to another for the same coverage because different insurance companies give different weight to various factors. Premiums are based on numerous aspects such as you and your driving habits, and your car and where you drive it.
When you compare car insurance quotes, make sure your quotes are based on accurate information about your age, marital status, miles driven and driving record, says Todd Drake, vice president of marketing for Arrowhead General Insurance Agency.
There are a variety of ways you can qualify for lower car insurance premiums, but Julia Feldman, assistant vice president of personal lines coverage at The Hartford says, "The best thing you can do is be a really safe driver." That will help you avoid accidents and costly claims, and typically will qualify you for a good driver discount.
10 ways to get cheap car insurance rates
1. Drive carefully. Car insurance companies raise rates for drivers who have accidents and accumulate traffic tickets. How far they look back at your record depends on the rules established by state insurance commissions. Many car insurance companies such as MetLife, State Farm, Travelers and Allstate offer you a discount if you don't make any claims for a certain period of time. If you think you're a safe driver, you can sign up for a usage-based insurance program such as Progressive's Snapshot or The Hartford's TrueLane program. Feldman says you can get a discount of up to 10 percent for signing up. Then if you demonstrate safe driving habits, you're eligible for discounts up to 25 percent on certain elements of your insurance when you renew the policy.
2. Compare the total price. "The total price includes the insurance premium and the fees you may incur by making payments instead of a single payment or being late on a payment," says Drake. "Paying your monthly installment with a recurring debit from your credit card or checking account will work to smooth out billing and avoid unnecessary cancellations and late fees."
3. Check for a renewal discount. Drake says not all insurance companies offer a discount for renewing your policy, so he recommends searching for a company that does in order to help offset any increase in your premiums.
4. Bundle your insurance. Most insurance companies offer a discount of 5 to 10 percent when you have your auto insurance and homeowners, condo or renters insurance with the same company. The Hartford offers a discount of up to 10 percent on your car insurance and up to 20 percent on your home insurance premiums.
5. Check for car insurance discounts. Many employers and professional or alumni groups partner up with carriers who offercar insurance discounts, so if you're a member of AARP or AAA or any other group you should find out if they offer car insurance discounts with any particular company. You can also get a discount for being a homeowner or, if you're a student, for having good grades.
6. Take a driving class. "Consider a defensive driving course for you and the drivers on your policy," says Feldman. "You may be eligible for a discount for taking the course and improved driving skills may lead to fewer accidents in the future, helping to keep your auto insurance premiums down." The Hartford offers a discount for each driver of up to 5 percent when they take an approved defensive driving course, she says.
7. Choose the right car. Car insurance companies evaluate cars to compare the likelihood of damage in case of an accident, the cost of repairs and the value of the car in case it's stolen, so consult a car insurance agent before you choose which car to buy. Car insurance companies also consider the claims histories of vehicle models when setting insurance rates. Cars that are cheap to insure generally cost less to repair or replace than other vehicles and tend to be owned by safe drivers.You can also get a discount for buying an environmentally-friendlier car. Feldman says The Hartford offers a 5 percent discount to drivers of electric cars and hybrid cars.
8. Raise your deductible. If you have enough cash in your emergency fund, the quickest way to lower your car insurance premiums is to raise your deductible to $500 or more. You can save as much as 10 to 20 percent on your premiums, but remember that you'll need to pay that deductible on each claim, not just once.
9. Insure cars together. Insuring multiple private passenger cars on one policy can reduce your premium, says Feldman.
10. Buy a car with safety features.. While you may get a discount for things like an anti-theft device, air bags and anti-lock brakes, you'll also get the peace of mind that you're safer in your car and you'll reduce the chances of a serious accident. Consider technology features in your vehicle that may help improve your safety and reduce claims. In a study by The Hartford Center for Mature Market Excellence and the MIT AgeLab, Feldman says the company found that mature drivers who had at least one of the top 10 technologies identified by a panel of experts felt more confident as they drove than those who didn't have any. Some of those technologies include alerts for drowsy drivers, lane departure warnings, blind spot warnings, smart headlights and reverse monitoring systems.
While safe driving and lower car insurance quotes go hand-in-hand, you should also be careful when choosing a car insurance company.
"While it's important to make sure you're not paying more than you need to on your car insurance," says Feldman, "you should consider the quality of the coverage and the carrier that stands behind the coverage in addition to the price when you shop for car insurance."