You can hardly watch TV for half an hour without seeing competing ads for auto insurance. Every company suggests that they have the cheapest rates and best coverage. You know that every commercial cannot be right, and may think it is just too hard to compare insurance rates and find out which insurer will have the best coverage for you.
Every state requires a proof of financial responsibility in order to operate a vehicle. For most of us, that proof is, simply, car insurance. Your monthly premium will depend upon how you insurer rates several factors. Your driving record and age are big factors, as well as the location where you park your car and drive. They also consider how you use your car, if you drive a lot, and if you use your car for business. Of course, the type of car you drive matters too. Some cars tend to be involved in accidents with higher claims, and some cars also tend to be stolen more often.
Last, auto insurers will allow some discounts for things like approved defensive driving courses, anti-theft and safety devices, and also combining multiple policies with one company. A car and home insurance discount is a popular example of a multiple policy discount. Young drivers, who automatically belong to a high risk group, do not have a driving history to establish a safe driver discount on their own. However, they can mitigate their high rates by keeping their grades up and taking an approved course.
Recently, companies have started to use credit reports to calculate rates. They keep statistics which show that people with higher credit scores tend to make lower auto insurance claims, and that is how they justify the use of credit scores. To most of us it might seem like the two things are unrelated, but the large insurers made a case for this, and they are allowed to do this.
Since so many factors go into calculating your final premiums, it would take a long time to call around and find out the best rates. Yet a comparison can save you money, and I personally saved over $50 a month when I bought a late model car by switching my policy from one company to another!
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