Basing Car Insurance Decisions Off Rates Alone? Think Again

No matter what you’re buying, price is always a major factor. However, don’t choose a car insurance policy based on the rate alone. While it’s not easy to let go of each extra dollar spent, it’s worthwhile to spend a bit more if the coverage is in fact much better. But first, let’s look at a few things you can do to see some premium savings.

car accident


  1. You should declare your marital status. This is largely based on the results of an analysis released by the Consumer Federation of America, which pointed out that a lot of companies provided lower quotes to married drivers than to single, separated and divorced drivers. Also, it turned out that young widowed women were charged premiums that were about 14 percent higher than those charged for married women.
  2. Build up your credit card history. If you have a good credit standing, you’re likely to get lower premiums. So make sure you check the information on file and report any inaccuracies. Also, it’s a good idea to go for national bank credit cards instead of choosing a store-specific card, no matter how much you love to shop. That’s because bankcards carry more weight with insurers, adding to your credibility rather than store-bought cards.
  3. Install safety features. According to the US News, you can ask for a lower rate on your insurance If you have safety and anti-theft features such as an alarm system or anti-lock brakes.


Basically, the idea is to reduce the risk involved. If you’ve got an excellent credit history, can drive carefully and generally don’t seem prone to accidents, then there’s a good chance that you’ll enjoy a lower auto insurance premium.


What’s a Good Deal?

You may be obsessed with trying to find the best deal, but what exactly does a good deal include? Read up on a little background from the Wall Street Journal to let you know what essential factors—like program inclusions—you should consider other than temptingly low rates:

  1. Liability coverage. In case you get into an accident and end up being at fault, this coverage will help you pay for any liabilities to the injured party.
  2. Bodily injury liability. Again, this one assumes that you’re in the wrong so it takes care of any medical expenses necessary to treat the injured party.
  3. Property damage liability. This coverage goes into paying for any damages to the car of the person that you accidentally hit.
  4. Uninsured and underinsured. If you happen to be hit by someone who doesn’t have enough coverage—if at all—then this is the coverage to help pay for your expenses.
  5. If you aren’t in the wrong, then you can file a claim for collision coverage.
  6. This is the kind of coverage you need if you become a victim of car theft or if your car is damaged in any way through a non-crash related event.


Other Handy Tips to Know

If you’re still determined to score the best deal around, then here are a few tips you should always keep in mind:


  1. Ask around. Find out about the insurance premiums everyone you know and trust has consulted with, is using or has used in the past. Then ask them to reach out to others in their own networks as well. You might not know someone directly, but never discount the possibility that they might.
  2. Use a comparison tool. A lot of comparison and online shopping portals are available for your use. CoverHound is great for comparing car insurance quotes, for one, generating a list of reputable insurers for you to mull over. Lists are always a good starting point.
  3. Trade it for your privacy. In August of last year, the New York Times published an article that introduced an interesting idea from auto insurance companies. You could take advantage of an annual discount that could run into the hundreds. However, you would have to give up your privacy in exchange. How? You’ll let them keep track of you for every second you’re behind the wheel. If you’re up for that kind of trade-off, then you’ll find it easy to get a great deal.
  4. Consider add-ons. If and when you’ve finally settled on an insurance provider, make sure you ask about any add-ons available to you. Some companies don’t often offer them openly but will gladly give it to you once you’ve asked after it.
  5. Rental coverage. If you often find yourself driving a rental—for those days when your car is in the machine shop or when you’re in another state and you didn’t bother to bring along your ride—then why not get rental coverage? You could easily stack this on top of your existing policy.



In the end, while rate matters, it’s not the only important factor at play. When choosing an insurance policy, make sure you don’t just head straight for the cheapest rate. Take the time to go over the policy inclusions. See which company provides you with better coverage for less. That’s the kind of deal you’ll be happy to drive home with.



About the Author

Financial professional and online entrepreneur, I'm best known as The Financial Blogger. I want to make money because I like enjoying life the way it should be; with a lot of great food and wine! I also love to spend time with my lovely wife and 3 kids!