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Car insurance comparison: How it works

You may be leaving hundreds, even thousands, of dollars on the table if you don’t regularly compare insurance companies and rates. Many factors affect your car insurance rates, and if any of them have changed – you’ve moved, bought a different car, had a ticket – it’s possible that the cheapest policy will come from a different insurer.

The younger you are, the more likely you are to save by making a car insurance comparison. On a full-coverage policy, a driver under age 25 saves more than $1,100 a year on average by shopping around, according to a CarInsurance.com study.

You can phone several insurance agents, or you can go to each insurer’s website to seek a car insurance quote. Or you can turn to one of several online quote comparison sites, like CarInsurance.com, where you can get apples-to-apples quotes delivered online in a few minutes. 

Whether you’re buying online with us, directly from an insurance carrier, or on the phone dealing with an agent, these are the steps:

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Grab your current auto policy.

Your deductible and liability limits greatly affect your rates, and you can’t make an accurate price comparison unless you get a quote for identical coverage, which is easier to do if you have your current policy on hand to refer to.  Also, you may be asked who your current insurer is and the ending date of your current policy.

If you simply want to find the cheapest policy possible when comparison shopping, you would look for liability coverage only, and in the smallest amount your state will accept. (Legally required minimum liability coverage amounts vary from state to state.)   Bear in mind that some states require so little coverage that an accident might leave any other assets you have, such as a home or savings, vulnerable to lawsuits.

If you’ve moved or are a new driver, you can get an idea of what people in your area are paying by visiting CarInsurance.com’s "Nosy Neighbor" tool and comparing rates by ZIP code.

Gather your facts.

Insurers will verify your personal data if you decide to buy a policy, but getting an accurate comparison-shopping quote means you should be as complete and thorough as possible. Omitting an accident or ticket as you shop doesn’t mean the insurer won’t find out, and it will make your quote much less reliable. 

Here’s what they’ll ask about:

  • The dates and circumstances of any accidents or speeding tickets in the last five years. Narrow it down to the correct year; the age of an accident or citation matters.
  • You should have a general idea of your credit score and the number of miles you drive in a year.
  • You'll also need to answer questions about your education, your job, your home and your marital status. Each of these is considered a risk factor and affects how much you pay.

If you are ready to buy you’ll need:

  • The driver’s license numbers for you and all other drivers listed on the policy.
  • The vehicle identification number (VIN) for all cars you want to insure.
Decide what coverage features you're willing to change.

Once you’ve input your information and seen your comparison-shopping quotes, you can either buy a policy or experiment with changes that can improve your protection or save you more money. You can change the information used to calculate your quote by clicking on each of the tabs, seeing how your rate would change if you:

  • add or drop a driver
  • change jobs or schools and now drive fewer miles
  • raise or lower your liability limits
  • add or drop towing and labor or rental reimbursement coverage
  • raise your deductibles on your comprehensive and collision coverages
  • drop full coverage altogether

Before you sign, think.

When you’re ready to buy, conduct some due diligence on the insurer who’s offered you the lowest rate. Often more than 100 insurers do business in a state, but it’s likely you’ve heard of only a handful. That doesn’t mean you shouldn’t buy, but it does mean you should confirm the company’s financial strength.

The stronger the insurance company, the more likely it is to be around to pay your claim in a timely manner and deal with any customer service issues that might arise.

Lastly, look for any pitfalls in the company’s payment plans. Some add large fees for monthly payments, or for those who choose not to allow direct withdrawal from a checking account.

Read more: How do I know the auto insurance you offer is reliable?

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