A car insurance quote provides an estimate of how much you’ll pay for a policy. It also itemizes costs and coverage limits. By reviewing quotes regularly, you can optimize your cost without sacrificing coverage.
To get a precise quote, you’ll need to provide detailed personal information. Some factors that affect premiums include: your driving record, vehicle type, annual mileage and your credit history.
Driving record
When comparing car insurance quotes, it is important to look at apples-to-apples coverages. Compare each policy’s deductible, limits and coverages to ensure that you are getting the right amount of protection at a price you can afford. You can request a quote directly from a carrier or use a website that aggregates multiple insurers’ quotes and displays them side by side for easy comparison.
Car insurance quotes are based on a variety of factors, including the driver’s record and personal information. A quote may also include optional coverages such as rental car reimbursement and roadside assistance. In addition, a quote will usually indicate the minimum financial responsibility limits required by state law and any additional coverages that the driver selects.
It is important to remember that even a minor accident can result in expensive medical bills and vehicle repairs. This is why it is crucial to have an affordable car insurance premium, regardless of your driving record. The good news is that it is possible to save money on car insurance by changing your habits and taking preventive measures.
Some steps you can take to lower your rates are:
Vehicle type
The vehicle type you choose to insure plays a major role in your car insurance quote. Different vehicles cost differently to insure due to their repair costs, theft rates and safety features. For example, sports cars typically come with higher rates than family sedans. In addition to liability coverage, most insurers also offer optional add-ons such as gap insurance, rental car reimbursement and roadside assistance.
When requesting quotes, be sure to include the make and model year of your vehicle and its VIN number (check the driver’s side dashboard for this information). You may also need to provide personal information for anyone else who drives the vehicle, including their name and Social Security number.
Once you’ve received your quotes, evaluate each policy to determine which one best fits your needs and budget. Compare apples-to-apples by ensuring that each quote includes the same coverage limits and deductibles. Additionally, check to see whether each provider offers the same coverage options, customer satisfaction and claims handling ratings. If you have any questions, talk to a licensed agent who can help you select the right policy for your unique situation.
Vehicle age
In most states, car insurance premiums start to fall at around age 25, reflecting the fact that drivers in their mid-20s have more driving experience and maturity than those just getting their licence. However, individual circumstances may mean that you have to wait longer to see cheaper premiums, especially if you have had multiple accidents or points on your licence.
Statistical data shows that younger people have higher rates of accident and injury, which is why insurers typically charge more for teenagers and new drivers. Drivers under 20 are the most likely to file claims, with over 9.5% submitting them in 2020 according to the Association of British Insurers (ABI). Middle-aged drivers tend to have lower claims frequencies and value than those aged over 60, so they can expect to pay less for their car insurance premium.
However, every company has its own set of factors that influence the price of a policy, so it is essential to compare quotes from a number of different providers before choosing the best one for you. For example, some carriers may have lower or higher rates for men or women, and your driving record and vehicle type also impact your premium. Some states also prohibit age as a rating factor, such as Massachusetts, Hawaii, and Michigan. Aside from these variables, the make and model of your vehicle, your coverage levels, your geographic location, and your credit score are also important factors in determining how much you will pay for your car insurance premium.
Mileage
Car insurance quotes often take mileage into consideration, but it’s not the only factor that affects your rate. Your credit score, age, and driving history also play a role in your premium. Nevertheless, the annual mileage is an important factor, as low-mileage drivers can save hundreds of dollars in car insurance premiums. Insurance companies check mileage in various ways, including using a device that plugs into the vehicle’s diagnostic port or an app that tracks driving behavior.
Some insurers use a mix of traditional and pay-per-mile discounts to calculate a quote. For example, Nationwide’s SmartMiles program allows drivers to save money by lowering their premium for driving less. This program also rewards drivers for good driving habits, such as braking smoothly and keeping speeds below the national average.
Other companies that offer pay-per-mile plans include Noblr and Mile Auto. Noblr offers real-time driving feedback and a personalized driving score, while Mile Auto uses a monthly reminder to snap a photo of the driver’s odometer reading. These photos are automatically transmitted to the company, which then verifies and authenticates them. These companies claim to save customers 30-40% compared to traditional car insurance. However, if you aren’t comfortable with your driving habits being tracked, pay-per-mile may not be the right choice for you. Moreover, it’s a good idea to shop around because rates can vary by thousands of dollars a year.
Credit history
The credit history of a driver is a key factor when calculating car insurance rates. It is believed that drivers with better credit histories file fewer claims, which saves insurers money. However, every insurance company has its own method of determining a customer’s risk and setting premiums. This is why it’s important to get multiple quotes from different companies. Each will weigh your credit differently and assign you to a particular risk category. Some state legislators have also debated whether or not insurers should use credit information in their underwriting and rating processes.
Insurance companies can check your credit when you apply for coverage, set rates and renew policies. They may also pull your credit as part of the quoting process to tailor their quotes. However, this type of inquiry is called a soft inquiry and doesn’t affect your credit score.
Insurance providers are legally allowed to consider the following factors in calculating premiums and denying initial applications: sex, marital status, race, creed, national origin, religion, occupation, income, home ownership, education, gender identity and sexual orientation. However, some insurance companies offer no-credit-check car insurance programs based on usage or telematics. These programs are typically more expensive than traditional policies, but they can be a good option for drivers with poor credit scores. Taking steps to improve your credit history can help you qualify for these programs in the future.
Policy length
Many auto insurance policies offer policy lengths of six or 12 months. When you receive a quote, it will often tell you the cost of the policy for that term and will include any applicable discounts. A 12-month policy usually costs more than a six month policy, but it can be a good option if you value stability and don’t anticipate any changes in your driving record or insurance needs. In contrast, a six month policy can provide more flexibility if you want to be able to review your rate frequently and take advantage of potential discounts. Bankrate’s insurance editorial team compares the pros and cons of each option to help you choose the right one for your budget.
