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Why is it so hard to find cheap car insurance?

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Things to Remember...

  • Most states require you to hold some form of auto insurance policy for your car in the event of an accident, theft or another disaster that befalls your vehicle. In general, you are not buying insurance for your car; you are buying it for everyone else’s car
  • Without auto insurance, states’ income tax revenues would suffer, because car crashes would remove people from the labor pool
  • Hospital bills are often around $1,000 per passenger, but could be significantly greater, while vehicle repairs may range from $500 to $2,000, per vehicle

Auto insurance can be one of the more annoying elements of modern life. It is required by law in most states; as a result, it often feels like another bill that you’d rather not pay.

Insurance companies make tons of money, and you’re left out to dry. Why is inexpensive, affordable auto insurance so hard to find?

Our glimpse at the costs and motivations of auto insurance companies answers the question of why it’s so expensive. An analysis of the average insurance price-checking process answers the question of why finding inexpensive insurance is so difficult.

Keep reading to learn more about the complicated world of auto insurance. Being informed is the best way to ensure you are getting the best rate!

Use our FREE online tool above to start finding affordable car insurance!

Why look for auto insurance at all?

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Most states require you to hold some form of auto insurance policy for your car in the event of an accident, theft or another disaster that befalls your vehicle. In general, you are not buying insurance for your car; you are buying it for everyone else’s car.

This is why most state governments mandate that you pay insurance companies a hefty portion each year.

Car insurance is mandatory across the United States for three reasons:

  • A car is a big-ticket item that tends to cost a lot to repair or replace
  • Cars are very dangerous and can cause significant property damage or personal injury to drivers and innocent bystanders
  • Nearly everyone owns a car and uses it on a daily basis

Automobile accidents are among the leading causes of death and disability in the United States, and auto insurance laws lessen the strain on society.

Without auto insurance, states’ income tax revenues would suffer, because car crashes would remove people from the labor pool.

Fewer revenues mean less state-provided services such as education, police, road maintenance and more. While it may feel like you are being asked to pay for something you’ll never need, it is actually for a better cause.

Why is it so Expensive?

It is easy to lay the blame for expensive auto insurance on greedy corporate executives who only want to steal your money, but the truth is that cars often cause a significant amount of damage. A new car typically costs around $20,000; used cars typically value around $10,000.

Hospital bills are often around $1,000 per passenger, but could be significantly greater, while vehicle repairs may range from $500 to $2,000, per vehicle.

Compensation for an insurance agent to work on your vehicle typically runs a few hundred dollars per person involved, and if you live in a tort state, there are court costs to consider as well.

If someone gets into an accident that effectively totals his or her car, that person may be on the hook for around $30,000, all told. Consider that the average auto insurance premium is about $1000-$1500 per year, this means that if you get into an accident once every 20-30 years, your insurance will pay for itself.

Car issues are expensive, and auto insurance is expensive because it is the only thing that can help to mitigate those expenses.

Of course, not all insurance is expensive. Recent advances in insurance analysis indicate that there are certain types of high-risk individuals that tend to get in more crashes than others.

Auto Insurance Costs

By staggering their costs according to statistically-significant probabilities, insurance companies can offer low-risk drivers inexpensive insurance policies and offset the cost by charging the higher-risk drivers more money for the same service.

Each insurance company calculates risk differently and finding inexpensive auto insurance often amounts to finding the insurance company that sees you as the lowest risk possible.

You can do this efficiently by using our easy comparison tool to choose the best insurance policy for you. Low costs indicate that a company sees you as a low-risk driver who will likely never have to make an insurance claim.

This still technically means that you’re paying for nothing, but at least you’re paying less for a state-mandated nothing than you might otherwise have to do.

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Inexpensive Auto Insurance

If you don’t end up comparing insurance the easy way, it will be very hard for you to find an inexpensive insurance company. This is because insurance companies don’t all have the same prices for everyone.

The average insurance website is a mess of sales pitches, caveats and forms. If you can find the forms that you need to fill out, you may spend about 15-30 minutes providing all your information.

This includes your address, demographic info (age, gender, etc.), car make and model, workplace, average time spent driving, car title, driving record and more.

If you call an agent on the phone, it may take even longer, as the agent will be trying to get your sale with every breath.

Comparing Auto Insurance and Savings

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Once you fill in your information, you will have to further navigate all the options you might want on your policy. Some websites let you mix and match after you’ve provided your information, but some force you to go through all that for each policy you choose.

This means that any given company may take several hours to understand their pricing structure. If you’re trying to compare prices, you may have to spend several hours on all the insurance sites you’re interested in, amounting to an entire weekend sitting at the computer or on the phone with an agent.

Insurance companies closely guard their algorithms for determining your auto insurance costs. Because this may ultimately save you money, it’s best not to complain too much.

Instead, you need to answer the question: How do I easily find inexpensive auto insurance?

It’s simple! Just use our FREE insurance comparison tool! Take a few minutes to enter your information once, and we will submit that information to all the insurance sites in your area for every type of policy you’d like to look at.

FREE Auto Insurance Comparison

Compare quotes from the top auto insurance companies and save!

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