You’re looking to get lower car insurance quotes. You’re not sure if you want to start buying car insurance online. You want to know how to decrease your monthly insurance policy. You’ve just received your drivers permit.
Whether you’re a new driver or you’ve been with your insurance company for years, this guide to buying car insurance can save you money, time, and pressure.
The Basics of Buying Car Insurance
Insurance is never something you necessarily want to use. No one wants their car to be damaged or be in an accident. But insurance helps when you need it and is often legally required.
Before talking about how to find the best car insurance companies for you, let’s review some basic terms and thoughts that influence your monthly car insurance bill, also called a premium.
The Different Types of Car Insurance
Your type of car insurance causes changes in your monthly premium.
- Collision Insurance: Covers the cost of damage to your car up to current bluebook value (the current value of your car).
- Liability insurance: Covers costs of other people’s damages that you caused if you are responsible for the accident—bodily injury included.
- Uninsured or underinsured insurance: Covers your losses if you’re hit by someone with no insurance or someone with not enough insurance to cover the costs.
- Comprehensive insurance: Pays for damages that occur to your car that aren’t even collision related (theft, vandalism, fire, and natural disasters).
- Personal Injury Protection (PIP): Covers medical expenses if you’re injured and can sometimes pay for lost wages if your injuries prevent you from working.
Liability is usually the cheapest option for monthly premiums. But if you just got a new car and don’t want to pay out of pocket for potential damages, comprehensive or full will increase your monthly premium.
Deductible
Your deductible is the amount of money you pay out of pocket when you are in an accident or collision before your insurance pays for anything.
A basic principle — the higher your deductible, the lower your monthly insurance.
If you have money saved for emergencies, then maybe a higher deductible and a lower monthly payment is best. If you don’t have money saved for your deductible, then a higher premium would probably be better.
Location
Where you live influences how much your car insurance costs. If you live in a city, you are more likely to have break-ins and fender benders. So if you live in a city, you can expect a higher monthly premium than if you live in a rural area.
Also, certain states require more minimum insurance coverage than others. In California, your coverage must include minimum liability of $15000 for injury or death to one person. But in New Hampshire, you only need car insurance if you have been convicted of certain violations.
Car
Your type of car will influence your insurance premium. Late-model BMWs, Mercedes, and Audis cost more to insure than a Honda Minivan.
If you own an older vehicle that is not worth much, minimum liability coverage might be best. A fifteen-year-old jalopy might not deserve full coverage.
Looking for the Best Car Insurance Companies for You
When shopping for your best car insurance, you have several avenues — online, captive agents, independent agents, and specialty agencies.
Buying Car Insurance Online:
Buying car insurance online or over the phone, also called direct auto insurance, can often be useful if you are familiar with the online system and if you don’t care for individual attention. It is less helpful if you want more explanation from an individual person.
These companies are often large and include Progressive and Geico Car Insurance.
Buying Car Insurance from a Captive Agent
When buying car insurance from a captive agent, you need to know that they represent only a single company. So you will not be able to compare multiple car insurance agencies through them. They are also often paid based on commission.
But if you want an individual to guide you through the options and you like your relationship with a single company, this might be a good fit for you.
Car insurance companies who use captive agents include AllState, Farmers, and State Farm.
Buying Car Insurance from an Independent Agent
When buying car insurance from an independent agent, you will receive good individual care and be presented with multiple car insurance companies.
They are not restricted to one company like captive agents. But you might still find yourself being pressured into a higher premium purchase.
These include companies like Travelers insurance and are often smaller regional companies.
Buying Car Insurance from Specialty Agencies
You might be having trouble buying car insurance. Specialty agencies often work with you if you had recent accidents, DUIs, tickets or lapses in coverage. If you have a less than good driving history, this will be your best option.
How to Get Car Insurance for the First Time
Now, for those just receiving their license. Simply put, car insurance is expensive if you’re just now receiving your license and learning to drive.
You are more likely to have an accident than those over 25. You are more of a risk to the company. But there are a few things to keep in mind when looking for car insurance.
Discounts/thoughts that are useful for teens and young adults:
- Good student discount — depending on your GPA, you may be eligible for this.
- Safety and Security features on the car — alarms and side airbags — might decrease cost.
- Homeowners’ or renters’ insurance under the same policy as your car insurance can reduce rates further.
- Being on your parents’ insurance policy might save you 10-25% because of the multi-line discount.
- If you pay the full amount up front for the contract cycle, there is often a discount.
Further Questions
There are many other factors influencing the best car insurance — your credit score, your marital status, your homeowner status, and school status to name just a few.
So if you have further questions about buying car insurance, receiving a discount on car insurance, buying car insurance for the first time, or getting the best car insurance, Semel Risk Consultants is an excellent place to answer these questions. It is local to both Reno and Las Vegas, Nevada.
