Car Insurance Quotes: One of the best ways to find cheap car insurance quotes online is to shop around and compare quotes. You can use NerdWallet’s online car insurance comparison tool to find quotes from multiple companies in minutes.
If you have questions about car insurance quotes, it’s best to get the answers before you start shopping. Here’s everything you need to know, from what auto insurance quotes are to how to get the cheapest one possible.
What are auto insurance quotes for car insurance?
A car insurance quote is an estimate of how much you’ll pay for a policy. Insurers each use their own unique formula to calculate a car insurance quote, so even if you provide the same information to Geico, Progressive, or any other company, no two quotes will be the same. The more auto insurance quotes you get, the better chance you’ll have of finding the cheapest car insurance company for you.
What goes into a car insurance quote?
Several factors affect your auto insurance quote, and they differ from company to company. For instance, one insurance company might raise your rates by 10% for living in a high-crime area, while a different insurer might charge only 5% more. Both companies are looking at the amount of crime in your neighborhood, but they calculate your insurance risk differently.
Factors that affect a car insurance quote include:
Personal characteristics like your age, gender, marital status, and education level will affect your quote. This is because insurers use statistics about certain demographics to predict how likely a person is to crash. For instance, teen drivers generally have higher insurance rates because they’re more likely to get in a car accident than almost any other age group.
The coverage you choose can make a difference in your car insurance rate. Unsurprisingly, the more coverage you need, the higher your quote will be. In fact, NerdWallet’s research found that on average, “full coverage” car insurance costs more than double the minimum coverage.
Your driving record, such as a history of accidents, speeding tickets, and DUIs, will raise your car insurance rates. But the same is true if you don’t have a driving record yet. To get the cheapest quote possible, you’d need a longer driving history with no recent traffic violations.
Details about your vehicle, including your car, make and model, and whether it has features like a GPS system or safety equipment, all affect your car insurance quote. Why? Luxury vehicles and cars with expensive features cost more to repair after an accident. They’re also more likely to be stolen, making them a liability for insurers.
Location plays an important part in how much your coverage costs. The amount of coverage required to legally drive a car varies by state. As such, average rates for similar policies vary greatly. Other details about your location play a role in your insurance cost, too. Population density, crime, and crash rates around your neighborhood are all factors insurers consider.
Your credit-based insurance score — which is similar but not the same as your credit score — can affect the cost of your auto insurance. According to the Insurance Information Institute, drivers with low insurance scores are more likely to file claims, which could be costly for an insurer. Further, insurance companies may assume there is a correlation between how well a person manages their finances and how well they drive and maintain a vehicle. If you live in California, Hawaii, Massachusetts, or Michigan, however, you’re in luck. Insurers there are not legally allowed to factor in credit scores when calculating your car insurance quote.
Your car insurance history plays a key factor in determining your auto insurance quote, including:
Whether your car insurance has lapsed. Drivers who have had an insurance lapse, even if they don’t own a car, may be classified as high-risk. Non-owner auto insurance can help customers avoid a gap in coverage.
Insurance claims. Generally, a recent at-fault accident will raise car insurance rates by 50% or more for a full coverage policy. Look for policies with accident forgiveness to help prevent a sharp increase.
How long you’ve been at your last insurer. Many companies offer a loyalty discount. But sticking with the same company without shopping around also has drawbacks. Some insurers use data algorithms to determine whether a loyal customer will compare rates with other companies. If they don’t think you’ll shop around, they may raise your rates. This practice is called price optimization. This is why being with the same company for years doesn’t guarantee you the lowest rate. The only way to know you have the best deal for you is to shop around at least once a year.
Your previous insurance company. According to research from the Consumer Federation of America, if your last insurer was a nonstandard company that insures high-risk drivers, your new insurer may give you a higher quote.
Questions you’ve asked an insurance agent, even if you didn’t file a claim. Raising insurance rates based only on an inquiry is banned in some states, but not all.
How to get car insurance quotes
There are several ways you can get free auto insurance quotes:
Online or over the phone.
Captive insurance agents.
Independent insurance agents and brokers.
Before you start making phone calls, though, remember these pro tips:
Look into car insurance companies’ complaint records and customer satisfaction. Auto insurance reviews are a good place to start.
Get at least three car insurance quotes online or from an agent so you can evaluate whether you’re getting a good price for the coverage you want.
Understand coverage limits. When comparing quotes, check that each policy has comparable liability limits and deductibles.