Typically, what are considered low car insurance rates?

The average cost of car insurance is $112 per month. Anything less than that would be considered low car insurance rates. Other drivers may consider premiums that cost less than what other drivers are paying for the same vehicle in the same state as low auto insurance rates. You can compare insurance quotes from local companies with our free ZIP code search below to see if you have low car insurance rates compared to your neighbors.

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Tonya Sisler has a Bachelor’s Degree from the University of South Carolina in Journalism and has worked for 15+ years in management. She has also completed a proofreading certification and is currently a professional writer.

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Brad Larson has been in the insurance industry for more than a dozen years. He started out as a claims adjuster for a national carrier. He has since switched to the agency side of the business. Brad is licensed in all P&C lines.

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Reviewed by Brad Larsen
Licensed Auto Insurance Agent

UPDATED: Jun 4, 2021

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Ever-increasing auto insurance rates drive many policyholders to seek a magic solution that will provide cheap car insurance rates. Unfortunately, cheap car insurance is not the same as a good deal on sufficient car insurance coverage. Any insurance company that offers lower rates than competitors for the same coverage is providing low car insurance rates. Many factors play a role in the auto insurance rates offered to drivers. Perception plays a significant role for drivers when seeking low car insurance rates. Receive a FREE car insurance comparison by using our ZIP code search tool!

What Low Rates Are Not

Insurance shoppers waste a great deal of time and effort trying to find an extremely low-cost auto insurance premium. Certain insurance providers use various methods to create quotes that appear to offer low rates. Closer evaluation by the savvy insurance shopper reveals that there are certain attributes that are unacceptable in the composition of an auto insurance policy.

Every state has a legal requirement for the driver to carry at least some liability insurance. A quote that offers liability coverage equal to the state-required minimum will not provide sufficient liability insurance following a loss. Most insurance companies suggest at least $100,000 in liability coverage per claim.

Many vehicles have sufficient value to require comprehensive and collision insurance components on the policy. Some quotes will be returned without this coverage, but the savvy shopper will recognize this tactic. A liability-only policy is not comparable to a full-coverage policy.

Drivers must be objective about the amount that is affordable following a significant loss. Most drivers carry a $500 deductible, but some quotes will be returned with a $1000 deductible to lower the premium.

High deductibles can cause financial hardship. Insurance companies require accurate information from the potential policyholder.

A different home address might offer lower rates, but the insurance company will cancel the policy if the truth is revealed. Obtaining insurance from another carrier will be virtually impossible following a cancellation for providing fraudulent information.

Offering a low rate for the first six months of the policy is a common marketing tactic. Wise insurance shoppers will recognize this attempt to win new customers. The introductory rates will return to market levels at the end of the introductory period.

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What Affects Auto Insurance Rates

Insurance companies use certain factors to calculate the annual premiums paid that are charged to each policyholder. Some facts cannot be adjusted because of the risk calculations that are utilized in the actuarial tables. Drivers must be aware that certain facts will require time and a change in habits to improve the insurance rates paid to the insurance company.

A clean driving record is more helpful than any other factor in lowering the insurance rates. Insurance companies consider the presence of moving violations and accidents in the risk rating for each driver. A teen driver will not find low-cost insurance. An experienced driver with a DUI in the past three years will pay high rates because of the violation. Drunk driving can do real damage on a car insurance premium.

Some drivers attempt to find another insurance company after a significant claim. Common databases are kept so that all insurers can review the previous claim records of a potential customer. Anyone with a record of multiple claims will pay higher rates to any insurance company. Some insurance companies will refuse to underwrite drivers with previous claims.

Densely populated areas and high-crime areas experience higher rates of loss. Drivers in these areas pay higher insurance rates than those in rural areas. Insurance companies use actual repair statistics from previous accidents to calculate the cost of repairing each make and model. Expensive vehicles are more costly to insure. Many factors are taken into consideration to determine the rates that are charged to policyholders. Some of these factors cannot be changed.

What Low Rates Include

Wise auto insurance shoppers will realize that sufficient coverage is more important than saving a few dollars each month. Evaluation of the quotes will reveal which auto insurance company is offering the best rate with all of these attributes present in the policy. Insurance companies encourage safe-driving habits and risk-lowering habits by offering certain discounts. The savvy shopper will be relentless in the pursuit of every possible discount. Additional training, theft deterrents and personal interests can win discounts from the right insurance company.

A $1000 deductible might lower the insurance rate, but the driver must be able to afford this amount of money without hardship. Low insurance rates must not be the only objective in finding affordable car insurance. Wise drivers will set aside an amount of cash equal to the auto insurance deductible in a savings account.

Shopping for great auto insurance rates include quotes that have equal payout amounts and deductibles.

Attempts to compare quotes that are not similar will result in a poor final choice. Multiple rounds of contact with each insurance company will be required to find the best possible combination of coverage, deductibles and discounts. Auto insurance policies must offer enough liability coverage to mitigate the risk of loss following an accident. Life-long financial hardship can result if the liability component is insufficient for the driver’s situation.

Low Rates are Available

Drivers who feel as though all auto insurance rates offered are too high should contact a friend of family member living in a major metropolitan area. People in New York City and Los Angeles pay significantly more for annual auto insurance rates than other places in the country. High auto insurance rates cause many city dwellers to use mass transportation and not even own a car. One discussion with a city dweller makes most people feel better about their car insurance rates.

A significant negative mark on the driving record will affect the auto insurance rates until sufficient time passes for the violation to be removed from the driving record. All auto insurance shoppers are wise to compare quotes and seek the applicable discounts. Reducing coverage is not the wise way to find affordable rates for sufficient auto insurance coverage. Get started not by putting in your ZIP code and receive a FREE car insurance comparison!

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