Getting the best rate on car insurance can be a complicated game. There are so many different aspects to consider to figure out the best deal for your car insurance. If you haven’t looked into your car insurance before, here are some simple things to look at that could potentially save you thousands (almost sounds like a GEICO commercial, right?).
Figuring Out Your Needs
The first thing you need to do is figure out what type of insurance you really need and can afford. There are three basic levels of insurance: liability, collision, and comprehensive.
With liability insurance, you are only insured against damages you cause for others. This is the basic type of insurance that is mandated by many states and local governments. The next level up is collision. This includes everything that liability has, plus it includes coverage for your own car if you’re in an accident. This will pay for your car to get repaired in the event of an accident, which is helpful.
Finally, there is comprehensive insurance. This covers everything (for the most part). If your car is stolen, if a tree falls on it, even if someone keys your car in the parking lot, this type of insurance will cover you. This is the most expensive option, but it does provide the most coverage.
Now that you know the types, you need to think about what you can afford and what is worth it for your car. If your car is older, the value of it may not be worth paying the premiums on your car insurance. A good rule of thumb is that your annual insurance premiums per year should always be less than 5x the value of your car. So, if you pay $1,000 per year, your car should be worth more than $5,000. Otherwise, it just isn’t worth it.
Once you’ve figured out your appropriate coverage, you need to shop around to find the best rate. It used to be that you had to call a variety of insurance companies, but now there are price comparison websites which offer straightforward rate comparisons.
You can also check out a variety of insurance company’s websites, and get free quotes to see who is the best rate. However, if you think you have a complicated situation, it still may be best to call an agent.
Finally, you need to continue to follow up with your insurance company over time. For example, if you have multiple policies (like homeowners), you could save money by having your policies at one company. Or, if you move or other changes happen, you could be entitled to rate decreases. Make it a habit to check in with your insurance company once a year to make sure that you are still getting the best insurance premium possible for your situation. It’s a very competitive market, so it may make sense to switch if your company isn’t keeping pace.