How to Get the Cheapest Car Insurance Rate

Nobody wants to overpay for their car insurance and we all want to know whether or not we’re getting a good deal. In this post we’re going to discuss what to look for and possible pitfalls to avoid. Here is how to get the cheapest car insurance rate.

Accurate information

One of the first things you need to verify is that the insurance company providing your quotes has accurate information. Let’s say you’re married with 2 kids and one of them still lives with you. You’ll want to make sure only 3 household members are listed on the quote since one of your kids has moved out. Many times insurance companies will pull data that is no longer accurate. You don’t want to be adding an extra driver to your policy if they are no longer a household member. This goes for vehicles as well.

Discounts

There are a ton of discounts to look out for and vary by insurance company. Here’s a checklist to run through to make sure you’re taking advantage of all discounts available to you to get the cheapest car insurance rates.

  1. Good Student: 3.0 GPA, full-time student and under 25 years old.
  2. Married
  3. Low Mileage: Typically under 7,500 miles per year. Varies by carrier.
  4. Defensive Driving Course
  5. Multi-Car Discount
  6. Anti-theft
  7. Anti-lock brakes
  8. New Car
  9. Length of Ownership: The longer you’ve owned the vehicle the larger the discount.
  10. Safe Driver: May require monitoring device to track driving habits for a limited amount of time. We discuss in detail here.
  11. Usage based: Similar to Safe Driver but some companies offer it as a permanent monitoring device. Your rate is constantly adjusted based on miles and driving habits.
  12. Student Away at School: Under 25 years old, no car with them. Read more.
  13. Military
  14. Homeowner
  15. Multi-policy: Bundling home, motorcycle, boat, life insurance and other policies with one company.
  16. Early Shopper: Get quotes 7+ days before effective date.
  17. Paperless Billing
  18. Automatic EFT Billing
  19. Paid in Full

Coverage

You want to be careful here. Cutting coverage to save money can get you into financial trouble. Here are some considerations.

Roadside Assistance

Do you already have a AAA membership? If so, you’re doubling up on coverage and spending more than you need to. You could also choose to not have this coverage and cover the cost on your own. Most roadside calls cost under $100.

Rental Car

If your car is in an accident and in the repair shop for a week you are going to need transportation. However, if you have an extra car or a AAA membership you may want to remove this coverage from your policy. If not, we recommend purchasing this coverage on your policy because rental car costs can get expensive.

Deductibles

Raising your Comprehensive and Collision Deductibles can offer significant savings. It is important that you have an emergency fund adequate enough to cover your deductible. Otherwise, you risk getting yourself into financial trouble.

Liability Limits

Let’s say you have the following liability coverage limits on your policy:

Bodily Injury Liability: $25,000 per person / $50,000 Occurrence

Property Damage Liability: $25,000

You’re in an accident in which you’re at-fault. The vehicle you hit is worth $45,000 and the driver was the only person in that car. The vehicle was determined to be totaled. The impact injured her shoulder from the seat belt. Her knee and ankle were injured as well and she was taken by ambulance to the hospital. Her emergency room visit, surgery, rehab and time off work costs $40,000.

Damages: Bodily Injury $40,000 + Property Damage $45,000 = $85,000

Policy Limits: Bodily Injury $25,000 + Property Damage $25,000 = $50,000

You are now personally on the hook for $35,000.

You could have purchased a policy with better limits that would have covered the full cost of damages. That policy costs $12 more per month or $144/year.

Even if you drive for the next 80 years the extra insurance cost is only $11,520. That’s about a third of the cost of this single claim. So, increasing your Liability limits is a smart insurance decision.

Insider tip: Most insurance companies will give you a lower rate based on previous policy Liability limits. For example, let’s say you’re switching from Progressive to Safeco. Safeco may give you an extra 15% discount for not having less than $100,000 / $300,000 Liability Limits while you were with Progressive. This is another reason why you don’t really save money by having lower Liability Limits.

Where to get the cheapest car insurance

There are 3 main ways to get quotes:

  1. Call several insurance companies to get rates.
  2. Online company
  3. Independent Agent

Call several companies

You can do this but keep in mind it will be very time consuming to work with each company. You’ll likely spend a couple days sending information back and forth. It can also be difficult to compare the actual coverages included in these policies with all the insurance jargon.

Online company

They can shop a lot of different carriers and likely show you low rates however you may end up with not so great coverage. Many times the rates are estimates and may not be accurate. It’s also likely they’ll sell your information and you’ll be getting a lot of spam emails and telemarketing.

Independent Agent

A single source that can help you compare price and coverage from lots of insurance companies. Find one with good ratings or someone a family member or friend can recommend. We’d be flattered if you chose us!

Related Articles

Car Insurance Tracking Devices. Should I?

How Credit Score Affects Insurance Rates

First Time Homebuyer’s Guide to Insurance 

Student Away at School Discount 

 

Click Here to Compare Quotes

Would You Like Us To Review Your Policies?

Request Your Proposal Here

Are you ready to save time, aggravation, and money? The team at Peak Insurance Group is here and ready to make the process as painless as possible. We look forward to meeting you!

Call Email Policy Service Payments
Skip to content