Because everyone is required by law to carry auto insurance, it is a subject that gets a lot of attention with consumers. When a service becomes a point of legal litigation, ways to save money are even more important. If you have to carry car insurance, it’s preferable that it be inexpensive auto insurance. However, if you haven’t taken the time to understand what that means, you can actually end up paying way too much.
What is Cheap Car Insurance?
This would seem like a simple question to answer. However, the definition of cheap inexpensive auto insurance varies a great deal from state to state and even area to area. One of the most accessible resources to determine what rates are considered low cost in your area is the Insurance Information Institute. This agency tracks the different factors to account for the highs and lows in the auto insurance market. According to the III, the most expensive area to live in for auto insurance costs is Washington DC with an average rate of over $1,100. The cheapest state is North Dakota, with most residents paying around $500 for basic coverage. So, when comparing, your locale really makes a difference. Rates that would be considered less than average and very affordable in expensive areas would be astronomical in states that have the lowest average. Knowing what is normal in your particular area is the best way to determine what is a good price for your auto insurance. Countrywide, the average is around $800.
What About Minimum Requirements?
Besides the average cost of insurance in your area, a little research will turn up what the minimum coverage requirements are for your state. Many websites that issue inexpensive car insurance quotes also list what these requirements are. You can also find these on the website of your particular state’s regulatory agency. To make it even easier, just Google your state’s name along with the phrase, “car insurance requirements”. Most states require a minimum amount of liability insurance. This allows for a payment to victims if you are at fault in an auto accident. Some states also build in coverage for your own care and damages, as well as damage to affected properties. This is the basic coverage for most states and varies mostly in the dollar amount that is required to be included on each policy. After the liability amount, some states add minimums for personal injury and even uninsured driver coverage. For the most inexpensive auto insurance, stick to the minimums if it works for your particular situation.
What About Additional Coverage?
Most people are well aware that there can be many benefits to having more than the minimal coverage required in your state. In fact, if your car or truck is still under a bank loan, state law may allow the bank to require comprehensive coverage as well, in order to protect their investment. Again, depending on where you live, the price fluctuates widely. Another quick look at the III reveals that the collision and comprehensive numbers reflect the same statistics as the liability rates. Washington DC is the highest and North Dakota the lowest. Each state is listed and rated per their average rates. You can even see a breakdown that separates the rates for liability, collision and comprehensive types of coverage. This can give you a good idea of what you can expect for your overall annual cost and work towards more inexpensive auto insurance for your situation.
Way to Save
Once you understand what the statistics mean for you personally, you can work to reduce the rates that you pay for your own auto insurance. There are several ways to shave cost off of your policy, some of which are more well known than others.
- Check your credit. Most people are unaware that your credit report can make a difference in what you pay for auto insurance. Companies often have policies in place that allow them to use your credit report to assess your risk as a driver. Ask before purchasing a policy if this is the case, especially if your credit is poor. If you have a personal relationship with your agent, you can ask them to remove that factor from your file and they may be able to override it based upon your history with the company.
- Install safety features. Insurance companies use an overall picture of risk to coverage to decide what to charge you for a policy. Adding safety features to your car can lower that risk factor and cut your bill. After market anti-theft devices work. Where you live also matters. While it isn’t always possible to move to a safer area, you can implement lifestyle choices such as keeping your car in the garage when parked. This can reduce your risk and your rates.
- Use public transportation. The less time you spend on the highways and freeways traveling and commuting, the less of a chance you have of being involved in any accident, either your fault or another driver’s. To prove this in order to get inexpensive auto insurance, you may need to show your mileage records or other similar proof.
- Limit the impact of a DUI. One of the worst things to have on your record is an impaired driving citation. This gravely hurts your chances of getting cheap car insurance. However, it’s important to know what you can do to limit the consequences. First, make sure it was a one time occurrence. Having a documented record of repeated abuse reflects much more poorly than a one time event. You can also participate in a defensive driving or safety course to get credit for better insurance rates. It also pays to shop around, as different companies use different time limits for DUI. It can vary between 3 and 10 years depending on your insurer’s policies.
Getting inexpensive auto insurance isn’t necessarily hard. However, there are dozens of things to take into account, from the average rate in your area, to the particular lifestyle choices that your company is using to determine your rate. Understanding these facts can help you take the steps to lower your costs, while maintaining sufficient coverage for your needs. Regularly check and see if there is a lower priced policy or if your lifestyle has changed enough to earn you additional discounts.