Turns out, there are 6 major factors in how much you’ll pay for insurance. These things are pretty broad topics, with lots of things to think about in each one, but today I’d just give a brief overview of each one. Each one is important, however some are more so than others, and many of them you can control to get the and great savings and cheapest car insurance you want.
How Cheap Car Insurance works: what You’re covered for
Of course, this makes sense. How much you pay for your insurance depends on what you’ve got coverage for. There are many different types of insurance, and each one covers a specific aspect of your car (or you, or the jerk that you just rear ended because he slammed on the brakes). First, there’s liability insurance, which covers the guy you’ve just hit. Next, there’s personal injury protection, which covers your medical expenses and the expenses of anyone in your car who was injured. Third, there’s comprehensive insurance, which covers anything that happens to your car that isn’t collision based; this involves things like vandalism or theft. Fourth, there’s collision insurance, which takes care of your car if you’ve been in an accident. Add those to things like insurance against uninsured motorists, car rentals, and emergency road services, and it can be a big bill.
Take a look at exactly what you’re covered for. It may turn out that you are over insured for things, and the way to get the cheapest car insurance is to pare down a little. You need to look very carefully at how valuable things like collision insurance are, because they may not be as valuable as they seem. Collision insurance, especially on older cars, is probably not going to give a very good return on your monthly investment , because the value of your car will most likely exceed the cost of repairs. If you get into an accident, chances are very good this will happen, and your return will be the estimated value of the car before the accident, not the price you paid for the car.
What, how often and how far
Believe it or not, what you drive has a huge effect on your bill. Getting the cheapest car insurance can depend on what car you drive, as well. On the whole, cars with a higher safety rating and a low incidence of occupant injury are cheaper to insure, no matter what their cost. In fact, cars with the highest incidence of theft, such as certain Honda Civics, can cost as much to insure as a high end Mazda RX8.
What you pay also has a bearing on your driving habits. Typically, the more miles you drive in a year, the more it will cost, the less likely the cheapest car insurance can be found- even if you’re a safe driver. Consider allowing your insurance company to track your driving habits. This can be done via services like OnStar, and can give insurance companies a better idea of what your driving habits are, which can lead to a reduction in your premiums.
Where and Who you are
Here’s a quick question: who is more likely to get into an accident? The suburban driver, who commutes to the city every day in his car, or the rural farmer, who drives to town to do errands? The answer is easy to guess: all other things being equal, the suburban driver is far more likely to be in an accident, through sheer probability. There are simply more people on the road for him to hit or get hit by. Also, drivers who live in densely populated areas suffer more vandalism and theft than in rural communities. Therefore, the cheapest car insurance is easier to get if you’re in a rural area than in the suburbs.
Who you are has a big impact as well on getting cheap car insurance. Obviously, your driving record is a big part of that. If you’ve had an accident within the last three years, chances are good you are still paying for it. Over time, however, your rates will go down. Almost as important to the insurance companies is your age, gender, and whether you’re married. If you’re a 18 year old single male, chances are good you are paying heavily for your insurance; you’re far more likely to be in an accident, and thus have to pay up. If you’re a student with good grades, it’s also pretty likely you’ll get a discount on your insurance.
Keep these things in mind when searching for the cheapest car insurance; they are the key factors in an insurance company’s calculations.