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UPDATED: Mar 13, 2020
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It seems you can’t turn on a TV, listen to a radio, or visit a website today without seeing some kind of an ad for low cost car insurance. While there are some legitimate good deals available out there, it’s advisable to check the fine print on these ads.
The fine print can include a lot of information about deductibles, eligibility requirements and other issues that might keep you from actually qualifying for the rate advertised. If it seems to good to be true, that might be because it is!
Follow this link to see the lowest rates on auto insurance without too much fine print, type your ZIP into the box to use our FREE rate finder tool!
Fine print can sometimes be confusing, with lots of legal terms and concepts that you may be unfamiliar with. Taking the time to type these terms into a search engine to get a definition will be well worth the effort, as it will help you to understand exactly what is being offered and for how much.
Companies are required by law to put exclusions to their great rates and offers somewhere that you can see it. So that’s why the fine print exists.
Fine Print to be Wary Of
There are a few things in particular in the fine print that you should look out for. One major concern, according to an article on the LiveMint website, is the level of coverage quoted.
If insurance does not provide the level of coverage you need, it’s not a bargain at any price, so you need to read the fine print and make sure that the price quoted is not strictly for a level of coverage below what you need.
Another fine print concern is the deductible. Sometimes a policy can have great coverage at an affordable price, but the reason is that the deductible is hundreds or even thousands of dollars more than you would expect to pay. A deductible should be set at the amount that you could afford to pay out of pocket if an accident happens. If the fine print reveals that the policy has a deductible that you couldn’t afford to pay, that policy is not really a bargain for you.
Eligibility is an issue that sometimes reveals itself in the fine print. When an insurance company shows a great rate or even talks about the possibility of offering a great rate, they are talking about a best-case scenario. That best-case scenario is a driver with no accidents or moving violations who fits into a low-risk demographic and has multiple discounts with the company. The fine print will sometimes reveal how close you are to fitting that profile and getting that deal.
The Best Ways to Find Low Cost Insurance
Because of all the variables involved, there is no really viable way to compare auto insurance without getting an individual quote. An individual quote will show you what your rate would be based on all of the influencing factors, including your driving record, age, marital status, type of car, level of coverage, and discounts you might qualify for.
To obtain a quote, you can call insurance companies; either randomly or by recommendation or you can visit insurance company websites. You could also go to an insurance comparison site that compares several insurance quotes side-by-side. While there are many effective comparison sites available, you should be wary of the ones that seem to push a particular insurance company as they might be giving preferential treatment to a sponsor.
How Your Car Type Affects Your Auto Insurance
The two aspects of insurance that might be affected directly by the car you drive are the rate and the level of coverage. The rate is affected by the value of the car and its safety features. The level of insurance is affected by how much you value the car and whether or not it is financed.
Cars that are more expensive cost more to replace cause insurance companies to charge higher premiums to offset their potential cost.
As DMV.org points out, newer cars also represent a higher risk (and higher premium) because they are both more expensive and more likely to be stolen. Cars designed for safety are less likely to be involved in serious or fatal accidents, so they are less likely to cost an insurance company a lot of money and this translates to lower premiums.
The type of car you own can help determine the level of coverage you need. If you have a rare collector’s car or other automobile that you are absolutely in love with, you are going to insure it in every way at the highest possible level. If you are financing your automobile, the loan company will probably dictate how much coverage you need, and they will probably require more than you would ordinarily purchase.
Auto Insurance Coverage Levels
For most people, the bare minimum of coverage they need is liability insurance. This type of insurance insures that if you cause an accident, injuries to other people and/or damage to their property will be paid for by the insurance. Most states require liability coverage.
Collision insurance would cover damage to your own vehicle in the event of an accident, regardless of who was at fault. The insurance would cover repair or replacement of the vehicle.
Most auto loan finance companies require collision insurance to protect their investment.
Comprehensive insurance covers the damage or loss of a car due to several occurrences other than accidents with other vehicles. Comprehensive will usually cover fire, flood, theft, and vandalism. Sometimes comprehensive insurance will also be required by an auto finance company so that they can be assured of getting their money if something other than an accident takes your car out of service.
Uninsured or underinsured motorist coverage is designed to cover medical expenses, lost wages, and other expenses related to an accident when the driver at fault has no insurance or doesn’t have enough insurance. Personal Injury Protection (PIP) insurance and Medical Payments coverage both provide insurance for injuries to you or your passengers, regardless of who is at fault.
Auto Insurance Discounts You May Qualify For
If you do not qualify for some type of auto insurance discount, you are probably not trying hard enough. Many of these discounts are based on your relationship with the insurance company.
For instance, an insurance company might offer you discounts for insuring multiple cars or for having several different types of insurance with them. Insurance companies might also give you discounts for staying with them a long time or for referring new customers.
According to an article on Edmunds.com, you might also qualify for a discount if you work in what the insurance industry considers a low-risk occupation, such as engineering or teaching. You might also qualify for discounts if you take a safe driving course or have a high grade point average in school. There is a variety of other discounts available and every insurance company is different, so it’s best to ask your company which discounts they offer to see if you qualify.
Other Factors That Will Raise Your Insurance Premium
Many things could cause your auto insurance premium to be higher than you would like. The first and most controllable factor is your driving record. If you get in a lot of accidents or get a lot of speeding tickets, your premiums will be high—there is no way around it. The amount of driving you do can also affect your premium—more driving means a higher premium.
Some of the factors that increase your auto insurance premium that you can’t control would include age and location. Young drivers tend to get in more accidents than other drivers and represent a higher risk, so they pay more. In addition, there are differences in accident risk based on which state you live in, and the insurance companies offset that risk by charging higher premiums to drivers in the more dangerous states.
Variance in Premiums Between States
There does not always seem to be rhyme or reason to why certain states have higher insurance rates than others do, but there are a few factors that affect a state’s insurance rates. According to an article on CBSNews.com, the most expensive state for car insurance is Louisiana. Its high rates can be attributed to a large number of uninsured drivers, how few insurers are competing for business, and the fact that damage from natural disasters has driven up the number of claims.
Other states with relatively high average insurance premiums include Oklahoma and Michigan. The cheapest insurance premiums in the country can be found in Maine, Iowa, and Wisconsin, which all have average premiums below $1,000 per year. Of course, there is considerable variance in individual premium costs based on the usual factors.
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