Auto insurance rate for the same kind of coverage can differ considerably, from company to company and from owner to owner. Primarily factors causing this variation could be:
Varying claims experience. Auto insurance covers all accidents (largely potential ones), which may happen in the future. Companies often use information about the individual’s past claims experience. Since each company has had different claims experiences with the groups of people they insure, the rates charged for customers by different companies vary.
Varying costs of doing business. The costs incurred in doing business and how much is paid to sell policies will vary from one company to another, resulting in different prices being charged to consumers.
In simple terms, auto insurance companies price policies to cover the amount they'll need to cover:
There are four basic strategies for getting a lower rate:
You may not change the way you live just to save some money on car insurance. Nobody would. But there are some small things you could do to save yourself big money.
Drive less and drive more safely. Insurance companies always offer incentives in the form of huge discounts to drivers with a clean driving record. Drivers with no points in the last three years qualify for much lower car insurance rates. There's good reason for this. For every speeding ticket you get within one year, your chances of being at fault in a motor vehicle rise drastically. So resist the urge to speed.
The less you drive the less you pay, too. If you have parked that car in the garage or if you carpool or use public transport to and from work, your rate will go down. The lower the mileage and the lower your premium.
Teenage drivers: One factor that will definitely influence your premiums is the presence of teen-aged drivers in your home. There are different rates available for every member of the household now.
If you have children who drive, it will be harder to qualify for a safe driver insurance plan. But teenage drivers who are good students having earned a straight B in their semesters, or who drive older model cars, may earn you an auto insurance discount. And college going kids who attend school more than 100 miles away from home (without a car) might too.
What you drive: can have burn a huge hole in your pocket or fetch you big savings. High profile cars (the Honda civic, sporty cars and the BMWs) will earn higher premiums than low profile and conservative sedans and station wagons. New and expensive cars mean higher collision and comprehensive premiums. Driving an older model can lower your car insurance premium by quite a bit.
Install safety equipment: With vandalism and thefts on the rise, an easier way to earn a discount auto insurance rate is to install safety devices on your car. Air bags, automatic seatbelts, and anti-lock breaks will all improve your rate on medical and un/under-insured motorist coverage. Car alarms and locator devices can also reduce the cost of comprehensive coverage. Many insurance providers will offer you a discount if you provide proof of having some sort of anti-theft device installed. Check your insurance policy for these discounts.
Shopping around, talking to friends and relatives browsing the web and meeting several car insurance companies might be the best way to save on car insurance. Note that quotes you get for the same cover may vary from one lender to another, and gathering at least 3 to 4 before you make your decision can save a good amount. Shopping for the cheapest auto insurance online is great way to get multiple quotes without a lot of hassle or commitment. Often one easy application can fetch you a number of quotes. And even if you don't decide to go with any of them, you'll have some benchmarks to use for comparison-shopping.
Do not over insure or under insure your vehicle. Choosing the right amount of coverage in the right areas will both save you money and protect you better.
Raising deductibles, increasing liability limits, and eliminating obsolete policies will make your car insurance dollar stretch further. Changing your coverage amounts isn't the only way to save money on your policy. Insure your automobile with the same company that provides your family with other types of coverage. This can earn you lower premiums. And some companies will offer a lower rate if you pay your premium electronically. Shop, shop and shop around for the best rate.
There are the different costs of doing business in both cases. If you buy through a local independent agent/broker, the price includes the commission paid to the agent/broker for selling the policy. If you buy from a company that sells directly, the price is reflective of the costs of building, staffing, and maintaining the sales centers as well as the marketing costs. Comparison-shopping is the only way in which you will know how low your rate is. So get quotes both from the company and the independent agent to compare. An agent/broker may provide the lowest price for some consumers while the prices available on the phone or Internet may be lower for others. Regardless of which product you buy, you will probably always receive unparalleled 24/7 in-person and online service.