Understanding car insurance quotes is key to finding the right coverage at the best price. This guide will explain how quotes are calculated, what factors influence them, and how to compare options to make an informed decision.
What are car insurance quotes?
Car insurance quotes are estimates of the price a person will pay for auto insurance coverage. These quotes are calculated based on a motorist's driving history, age, gender, location, the number of miles they drive, and their vehicle.
Why are auto insurance quotes important?
Car insurance prices vary by insurer. Some auto insurance companies are more expensive for particular motorists than others. Getting auto insurance quotes helps drivers ensure they're paying the most affordable price for comprehensive coverage.
What to know about car insurance quotes
Different insurers have different processes for getting car insurance quotes. Some allow drivers to get quotes online and others require a phone call to an agent. Providing personal details to insurers is important to get accurate quotes because many different factors affect the cost of auto insurance. It's also a good idea to have a rough estimate of how much insurance should cost so drivers can compare quotes and see how their prices compare to the average rates.
What factors affect your car insurance quote?
Insurers take several key factors into account when setting your price. When getting car insurance quotes, it's important for motorists to be aware that the costs they pay are determined by some of the following criteria.
Where you live
Insurance is more expensive in some states than others. For example, North Carolina and Ohio have some of the cheapest insurance in the nation while Michigan and Louisiana have some of the country's most expensive coverage. While drivers can do little about where they live, it's important to realize that motorists in areas where the accident risk is higher will pay more.
Who you are
Insurance companies ask for age, gender, and marital status to see how likely a person is to make a claim. Insurers collect detailed data on accidents according to age and gender to understand the risk of providing coverage. Some people -- such as younger drivers and male drivers -- considered as an overall group, get into more accidents. They also tend to get higher auto insurance quotes, since companies believe they are riskier to insure.
Marital status
Married drivers are often seen as behaving more safely. Insurers also view married people as being more financially stable than singles. As a result, drivers who get married can expect to get less expensive car insurance quotes than those who are single.
Homeownership impact on car insurance costs
Homeownership can sometimes reduce car insurance costs. Insurers may see homeowners as more financially stable and more risk averse, which can result in lower premiums. Homeowners also have the opportunity to bundle coverage, buying home and car insurance together. This can result in a discount that reduces policy premiums.
Education levels
Drivers with more education are often offered lower premiums when getting car insurance quotes. Education level is also correlated with level of risk, which explains this phenomenon.
Insurance history and credit score
Drivers with good credit who have not had lapses in insurance coverage are seen as more responsible and less risky to insure. As a result, they will benefit from lower premiums when obtaining car insurance quotes.
How you drive
Insurers also consider a motorist's personal driving history. If a person has a clean driving record, they're more likely to get cheap car insurance quotes. If they have a history of at-fault accidents that led to insurance claim payouts, they'll pay more. People also get higher price quotes if they need high-risk insurance, such as having a DUI or moving violation, or if they haven't been driving long.
Vehicle type
More expensive cars often cost more to repair, and they cost more to replace if they're damaged beyond repair. They're also more likely to get stolen. Because of all that, they're more expensive to insure. On the other hand, if a vehicle has excellent safety and anti-theft features, that reduces the risk of injury claims or theft, and makes insurance costs cheaper.
What information do you need to get a car insurance quote?
Insurers ask for a lot of information to get an accurate picture of a driver and vehicle owner. While people don't have to provide this, it can result in more accurate price estimates.
Be ready to provide the following details:
Your contact information and personal details
The insurer needs to know your name, address, phone number, marital status, and at what age you got your driver's license.
Your driving history
The insurer asks for details about any accidents or violations in your driving record. This includes the date of the incident and the cost of any insurance claims paid out.
Your vehicle information
Insurers need to know its make, model number, model year, safety features, and anti-theft features. They'll also want to know if it is owned, leased, or financed.
Your intended vehicle use
You need to provide information about other drivers in your household, including their ages. The insurer also asks for details about your commute and the number of miles you drive each year. You also say whether you use the vehicle for pleasure, for getting to work, or for business purposes.
How to compare auto insurance quotes
These tips will help you get cheap car insurance quotes.
Shop around
Shopping around is the best way to get the cheapest coverage. Use websites that let you get multiple quotes at once to make this process easier.
Speak to an agent
Insurance agents can provide quotes and help motorists to match their coverage to their needs. Some insurance agents will also shop around with different insurers for their clients so they can find the lowest car insurance quotes on their behalf.
Captive insurance agents vs. independent agents
Some insurance agents only represent particular auto insurance companies. These are called captive agents. They give you quotes just for the company they work for, such as State Farm or Nationwide.
Other insurance brokers are independent agents and can help you compare car insurance quotes from several insurers. In either case, you should never have to pay a fee for help from an agent.
Bundle coverage
If someone buys multiple policies from the same insurer, they usually get a discount. When possible, bundle different kinds of policies -- such as home and auto. It can save on premium costs.
Consider signing up for programs that track your driving habits
Many insurers offer discounts if a motorist downloads an app that tracks their driving behavior. Those who are willing to share this information can look for a company that reduces premiums based on safe driving.
Get only the coverage you need
You don't want to pay for protection you don't truly need. For example, if an insurer offers roadside assistance but a driver already has AAA, they shouldn't include that coverage in their policy.
Look at the big picture
It may be tempting to buy minimum coverage or set your deductible -- what a driver pays before their insurer contributes -- very high to get cheap car insurance quotes. But if coverage doesn't include enough, a motorist may end up with losses the insurer won't pay for.
A person could, for instance, be responsible for paying the difference if they caused $50,000 in damage but their insurance covers only $30,000. And a high deductible can leave a driver paying a lot of money after an incident. In other words, coverage that appears cheaper based on monthly premiums could cost more in the long run. Carefully consider the possible costs.
The Ascent's best car insurance companies
Check out our hand-picked list of the best car insurance companies. Our top picks are packed with valuable perks, such as low rates, bundled discounts, and best-in-class service.
Best car insurance companies
Outside Experts Weigh In
David C. Marlett, PhD, CPCU
Managing Director at the Brantley Risk and Insurance Center, Appalachian State University
What information should drivers use when comparing the best car insurance quotes?
The most important thing is to compare the coverages in addition to the quote. Make sure they offer the same limits of liability and uninsured motorist coverage. Do they both offer coverage for your auto (comp and collision) with similar deductibles? Drivers want to make sure they are comparing on more than just price.
How can drivers save time and get the best quote when shopping for car insurance?
Obtaining a quote for car insurance is quick and user-friendly. You could easily obtain quotes from several different insurance company websites in under an hour. Consumers can also contact an independent agent who will collect their information once and do the shopping for them. The agent will find the appropriate coverage at the best price after submitting the coverage to multiple insurers.
How often should drivers compare car insurance quotes and consider switching insurers?
This isn't necessarily something you want to do every year, but every other year makes sense. If your risk profile changes significantly (adding a young driver, for example), that is also a good time to compare quotes when renewing the policy.
Dave Vang
Finance professor at University of St. Thomas
What information should drivers use when comparing the best car insurance quotes?
Consider the premiums of course, but also bear in mind the deductible, the ability to do monthly payments for budgeting purposes, dollar amount of coverage, and doubly make sure that you are comparing policies for hypothetical customers with your driving record. If you have a bad history, beware of an offer that seems too good to be true.
How can drivers save time and get the best quote when shopping for car insurance?
There are a number of comparison sites -- look at multiple sites, not just one, to make sure you are getting a balanced view. It is also important that the sites ask you your location, as insurance is an industry that is regulated at the state level. A rate for one state resident is totally irrelevant to rates for residents in another state.
How often should drivers compare car insurance quotes and consider switching insurers?
It is a tendency for companies to sometimes raise rates after one has switched, so annual comparisons may be necessary.
FAQs
Getting a car insurance quote should never cost money. Free auto insurance quotes are available from every insurer online, via phone, or in person from a licensed insurance agent.
People have to provide some details to get car insurance quotes, including their name, age, address, gender, driving record, and marital status. Consumers also tell the insurer about their vehicles. This is necessary so the insurer can assess the risk of providing coverage and give an accurate price quote.
Most insurers ask for a person's Social Security number and vehicle identification number (VIN), but they don't have to provide this information to get a quote. Offering it can streamline the process and ensure that auto insurance quotes are as accurate as possible.
Most insurers check credit scores, but getting insurance quotes doesn't count as an inquiry or affect someone's credit score (because they aren't applying for credit).
A car insurance quote may be high because the policyholder has a spotty driving record; lives in a state with expensive insurance; or has raised other red flags with the insurer. For example, car insurance quotes are higher for drivers with poor credit or who have received lots of tickets.
