If you want a fair price for car insurance, you’ll have to do research because the rates will vary. You’ll pay more for a basic policy in Louisiana, Michigan, and Florida due to unique insurance schemes, like no-fault insurance and larger populations. If you buy an auto insurance policy in Maine, you’ll get the cheapest rates in the country.
Every auto insurance company has different rates. To determine if you are getting a fair deal, you must learn how they set their prices.
The Insurance Breakdown for Monthly Rates
Before you contact any auto insurance company, do some research because this is the best way to gauge the price of a policy. In the insurance world, every insurer will set a price based on key parameters. These parameters will either increase or decrease your bottom line.
Driving History
If you have an excellent driving record, you’ll get a good price on a premium. You won’t get a fair deal if you’ve recently broken the law or had a traffic accident.
Driving Habits
Generally, if you insure a work vehicle or a primary automobile, your insurance rates will be higher. If you get a policy for a vehicle that you rarely drive, your rates will be lower.
Location
In some cities, the rates are higher due to the higher risks of theft and vandalism. If you park on the street, you’re more likely to have your car damaged than if you park in a garage. If you live in an urban area and need a fair policy, contact a local auto insurance company, and explore your options. You could score a discount if you buy a security system for your vehicle.
Age
If you’re a mature driver, you’ll get a fair deal on a policy. In terms of teen drivers, the rates will be higher but fair. An insurer will always set higher rates for teens because they’re inexperienced drivers and, statistically, have a higher incidence of risky driving.
Gender
Male drivers will usually pay more for an insurance policy. Female drivers will pay less because, statistically speaking, they are less likely to get into serious accidents.
The Vehicle
If you own an expensive automobile, it will have high insurance rates. In addition, depending on its features, certain variables could raise your monthly insurance costs. The rates will rise if your vehicle has the following:
- High repair costs
- A large engine
- A poor safety record
In order to get a fair deal on a policy for a higher-priced automobile, you may have to equip it with a high-quality safety system. In terms of liability insurance, you’ll have high rates if your vehicle can inflict considerable damage to another automobile.
Credit
If a policy doesn’t seem fair, review your credit-based insurance score. It can help you predict your chances of filing a claim and the cost of the claim.
How to Ensure a Fair Price for Auto Insurance
If you already have an auto insurance policy, you could make it better. Use these strategies if you need a fair deal.
Don’t Insure a High-Risk Vehicle
Sports cars and luxury cars have high premiums because they’re more likely to be stolen or vandalized. If you want fair and affordable rates, buy one of these automobiles:
- Subaru Outback
- Volkswagen Beetle
- GMC Acadia
- Subaru Forester
- Subaru Legacy
- Buick Encore
- Chevy Equinox
- Tesla Model X
- Tesla Model S
- BMW 3 Series
Optimize Your Credit Score
A low credit score can impact your insurance rates. If your score needs improvement, you won’t be labeled as an unsafe driver. However, you will have a higher premium.
To get a fair rate in this situation, you’ll need to fix your credit score by:
- Paying your bills on time
- Addressing all past-due accounts
- Paying off all revolving balances
Get a Bundled Insurance Policy
If your current insurance policy only covers your car, you’re probably not getting the best deal. You’ll save cash if you sign up for a bundle. Your insurance company should offer a package that bundles a home and auto policy together.
Don’t Overpay for Coverage on an Older Vehicle
If you own a new automobile and an older one, you should never insure the older car for more than it’s worth. This value will drop over time, so you may need to adjust the amount insured or find a company that does this automatically each year.
Get Rid of Unnecessary Policy Options
Thoroughly review your insurance policy, and eliminate some of the optional features. For example, you may not need options like rental coverage, no-deductible windshield repair, and roadside assistance.
Review Your Entire Policy Often
If your auto insurance policy auto-renews, always review it a day before the renewal date. Your situation could have changed, so you may need to update or remove certain features. This is a smart way to get a fair price on a policy.
Important Statistics
An average insurance policy in the United States costs about $876 a year, which is roughly $73 a month. However, this is just a baseline for a standard policy. In the next section, you’ll learn more about insurance rates and how you can get a fair price.
The Average Cost by Company
If you need a fair price for minimum coverage, here are a few companies to consider:
- USAA charges $447 for a policy
- Geico charges $780 for a policy
- Progressive charges $789 for a policy
- Farmers charges $1,107 for a policy
- Nationwide charges $931 for a policy
These companies also have an option for full coverage. If you add it, your rates will increase by up to 174%
The Average Rate Following an Accident
Typically, your insurance rates could rise by up to 42% or more following an accident. These statistics will give you more insights:
- Metlife rates will increase by 70%.
- Geico’s rates will increase by 58%.
- American Family’s rates will increase by 53%.
- Farm Bureau’s rates will increase by 33%.
- State Farm’s rates will increase by 24%.
The Average Rate Following a DUI
One DUI charge can increase your rates by up to 72%. This calculates to about $1,823 a year.
If you have multiple DUI charges, you may have problems finding a fair deal on a policy. In this situation, you’ll need to compare quotes from various insurance providers. Each insurer will assess your record differently, so this is a practical way to save money on a policy if you were arrested.
Get a Fair Deal for Good Credit
Most insurance companies will provide a substantial discount for good credit. If you protect your credit score, you could get a:
- 49% discount from USAA
- 39% discount from Geico
- 44% discount from Farm Bureau Mutual
- 37% discount from Nationwide
- 64% discount from State Farm
In many cases, you can use an online comparison tool to see how your personal factors work out with different insurance companies. Because different companies highlight diverse statistics, the best company for you may be different than the best company for someone else.
