Mathew B. Sims is Editor-in-Chief and has authored, edited, and contributed to several books. He has been working in the insurance industry ensuring content is accurate for consumers who are searching for the best policies and rates. He has also been featured on sites like UpJourney.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. He reviews content, ensuring that exis...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Apr 21, 2020

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It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We partner with top insurance providers. This doesn’t influence our content. Our opinions are our own.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

Things to Remember...

  • There are several ways you can control premiums and save money on insurance
  • Understanding how insurance companies determine your rates is the first step to saving
  • Research to find out exactly what kind of coverage you need for adequate protection

Auto insurance companies around the country create their premium rates according to certain criteria.

There are a few easy ways to ensure you have the best auto insurance deal you can find.

The main trick is doing your research and fully understanding the ins and outs of auto insurance.

Once you identify how insurance companies view you, there are ways you can control premium rates and ultimately save some money.

A majority of the criteria insurance companies use to create premium rates can be influenced by some simple decisions you can make. For quick, FREE quotes on auto insurance, click here to enter your ZIP code into the box now!

How Car Insurance Is Calculated

Every auto insurance company bases their rates on a few non-negotiable characteristics such as age and gender.

If you happen to be a male younger than 26, you can guarantee you will have some of the highest rates on the market.

Research has proven over the years that teenagers and young males are some of the highest-risk drivers on the road.

Insurance companies insure and set rates according to how dangerous they view you, so if you happen to fall within a demographic they deem as risky, you will have higher rates.

In addition to age and gender, the area that you live in will also impact your premium rates. If you happen to live in an urban or metropolitan area where theft and vandalism are high, your rates will reflect that fact.

Finally, your driving record will also greatly impact your premium rates. Unlike age, gender, or location, you do have some control over your driving history.

Drivers with little to no moving violations and no accidents on their record will have the lowest rates.

Practice safe driving techniques, keep your license clean, and you will find your premium rates for auto insurance much lower than the average person.

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Deductibles and Discounts

Understanding how deductibles work is a great way to make sure you have the lowest premium possible. The key is finding out about how much you can afford for out-of-pocket repairs.

A deductible is what you pay for repairs in the case of an accident. After you meet your deductible, the insurance company will cover the rest of the repairs and damages.

Deductible amounts are the easiest way to lower premium rates for one simple reason: the higher your deductible is, the lower your premium rates are.

Insurance companies are primarily concerned with risk. If you agree to pay a higher out-of-pocket cost in the event of repairs, it will cost the insurance company less, so your premium will go down.

Remember, your deductible should always be based on how much you can afford to pay for repairs.

You must have a complete understanding of your personal economic situation to reap fully the benefits of manipulating your deductible rates.

Another method that is closely tied to deductibles is policy discounts. Every auto insurance company will offer a smattering of discounts, from multi-vehicle discounts to safe driver discounts.

Sometimes, the only way to find every discount available to you is to ask an agent. If you have existing insurance, contact your local agent and ask about the various discounts they offer.

A great blog that gives a ton of information about saving money on auto insurance and many other things is Money Smart Life.

Free Auto Insurance Comparison

Enter your ZIP code below to view companies that have cheap auto insurance rates.

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Type of Vehicle

Another way to guarantee a low premium is to obtain a low-risk vehicle. If you have already purchased a vehicle that happens to fall into the higher risk category, you are out of luck.

However, if you have the option of finding a new vehicle or you are in the process of purchasing a new vehicle, check with your insurance provider first about how much the vehicle will cost to insure.

Some common factors that can make a vehicle costly to insure are the size and speed capabilities.

Most of the time, sports cars cost far more to insure. In addition, larger SUVs can sometimes be quite expensive to insure.

Typically, the cheapest cars to insure are minivans, smaller SUVs, and some trucks. The size of the engine also contributes to a car’s riskiness.

Edmunds has released a variety of articles listing the most expensive and least expensive cars to insure.

Edmunds has a comprehensive database regarding many vehicles, so if you are looking to purchase a new or used vehicle, find out how much the vehicle would cost to insure before buying it.

Types of Coverage

 

Every state in the United States requires a minimum level of liability insurance, but most car insurance customers can purchase additional types of coverage like comprehensive and collision.

Understanding the various types of coverage, and considering your situation and type of vehicle, is the first step in finding the perfect fit of coverage and cost.

Most new vehicles, especially when financed, are required to have collision and comprehensive coverage. However, if you purchased the vehicle outright, deciding on coverage is solely up to you.

Comprehensive and collision coverage is based on the market value of your vehicle.

For further information about what should go into purchasing new auto insurance, the Insurance Information Institute is a fantastic resource.

Purchasing auto insurance can be a headache. However, if you understand the ins and outs of how insurance premiums are calculated, you can find low rates.

Insurance companies use factors that are outside of your control, but manipulating the factors that you can control is the first step to finding better rates.

Just enter your ZIP code into the FREE box found on this page to receive cheap quotes now!