When you shop for car insurance, you’re driving blind. Give your details to a dozen carriers and you could end up with a dozen different quotes, some twice as high as others.
Insurers base their premiums on many factors, including age, driving record, and car type. But when Consumer Reports analyzed more than 2.7 billion premiums — the bulk of the US auto insurance market — it also identified some factors that you might not even be aware of, including credit history and education, that have nothing to do with your driving.
Because each insurer has its own pricing formula — penalizing or rewarding factors differently — consumers can save by shopping around.
If you’re already insured, examine your policy to see what you’re now paying. Then follow these steps:
Shop often. Check out several insurance companies every two to three years. Maybe your situation has changed — if you’re driving fewer miles, for example, that can lower your premium a little. Or maybe the carrier has adjusted its underwriting or rating in ways that help, or hurt, your bottom line. You get little benefit from sticking with the same insurer year in and year out; research in the past has found that the “long-term customer discount” is mostly a myth.
Cast a wide net. Try shopping on TheZebra.com, which uses data from Quadrant, a private company that collects and analyzes rate filings supplied directly by insurers. The Zebra offers estimates from 18 to 35 insurers, depending on the state. That compares with just three to 10 quotes provided by other sites, including Insurance.com, NetQuote, and NerdWallet.
Consider raising collision and comprehensive deductibles. Collision insurance covers damage to your vehicle caused by impact with another car or object, regardless of who’s at fault. Comprehensive covers theft of your vehicle and damage from fire, flood, a falling branch, and the like. The average driver files a comprehensive or collision claim only once every five to 10 years, according to the Insurance Information Institute. The higher your deductible — the amount you pay before insurance kicks in — the lower your premium, especially for collision.
Protect yourself. Make sure you get enough liability coverage. Try 100/300/100 coverage, which pays for bodily injury up to $100,000 per person and $300,000 per accident, and property damage up to $100,000. Buy uninsured/underinsured coverage at the same limits, in case you’re hit by a hit-and-run driver or someone without enough insurance. Finally, for added liability protection, consider an umbrella policy. A $1 million policy typically costs about $200 to $400 per year.
Check Consumer Reports’ ratings. They take into account subscribers’ overall satisfaction with auto insurance companies over the past two decades. An affordable policy won’t help much if the carrier provides subpar service or gives you a hard time about paying a claim.