Jessica Sautter is a Content Writer for CarInsuranceCompanies.com with a Bachelor’s Degree from Eastern Michigan University in Elementary Education with a Major in Reading and a Minor in Mathematics.

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager

UPDATED: Oct 6, 2020

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Key takeaways...

  • Purchasing the wrong type of insurance or being under-insured can almost be the equivalent of having no car insurance at all
  • Insurance companies are risk based and a while ago most insurance companies started using your credit score as a factor to forecasting the risk of you as a driver
  • Your insurance rates are also determined by the type of car you drive. The more expensive the car typically means an increase in monthly premiums

Almost every driver has car insurance almost most do not really understand what their car insurance policy covers until the time comes when an insurance claim needs to be submitted.

At CarInsuranceCompanies.com we strive to provide content for drivers to learn about car insurance coverage, how to get car insurance discounts and factors which can influence your car insurance premiums.

Man policy holders simply entrust their security in the smile and words of an insurance agent and that’s not always enough.

As a wise consumer who is purchasing an instrumental asset for the protection your family, you really should understand as much as you can about auto insurance. Remember a key quote:

Purchasing the wrong type of insurance or being under-insured can almost be the equivalent of having no car insurance at all.

Use our free rate comparison tool above to find the best rate for the car insurance you need.

Types of Car Insurance

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The first thing you should do is familiarize yourself with the main types of car insurance coverage such as personal injury protection and bodily injury liability.

Understanding the core features of a car insurance policy prepares you for knowing what to do in the event of submitting a claim.

Additionally, you should also understand the optional features available for most car insurance policies and never assume you will be covered for everything.

Did you think about asking about rental car coverage or comprehensive coverage?

Even though a car insurance company promotes a campaign of trust with friendly faces remember that these companies are profit machines so your best interest is often secondary to their balance sheet.

What are some of the key things you should know about auto insurance?

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Your Credit Score Can Affect Your Car Insurance

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Insurance companies are risk based and a while ago most insurance companies started using your credit score as a factor to forecasting the risk of you as a driver.

While this does not logically correlate it does provide an opportunity for auto insurance companies to charge you more for premiums should you have credit issues.

Some states do prohibit the use of this information but it’s still wise to pull a personal credit check before applying for car insurance. If you have really good credit then make sure to ask about further discounts.

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Factors Affecting Your Car Insurance

In general, the better your driving record the cheaper your auto insurance premiums will be.

Auto Insurance companies love drivers with experience and a clean driving record but if you had traffic violations in the past or submitted a claim then this information might just be used to classify you as higher risk.

Sports cars, SUVs, luxury cars, more exotic cars, will demand higher auto insurance premiums.

Your car insurance rates are based on you and your vehicle so if your car is high risk, expensive or sporty then the overall risk for your auto insurance application will be higher than someone with a bland used car.

Where You Live

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Yes, location is a factor. Consumers who live in major cities are considered high risk simply due to the congestion of drivers on the road.

An insurance company calculates a risk of a car accident not just solely with you but also the exposure your vehicle will have to other cars. Those drivers who live in rural areas where congestion is low will receive better rates.

Auto insurance is an extremely competitive industry so finding affordable car insurance is very possible but securing the right amount of coverage takes both the time to compare car insurance companies and the understanding of what questions to ask.

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How can we help?

With a database of 100s of car insurance companies nationwide and an extensive library of articles pertaining to car insurance, we can help you educate you about car insurance and connect you with providers who provide free car insurance quotes all within our site.

Enter your zip code into our free comparison tool below to get started finding the coverage that’s right for you.

Some Popular Questions and Answers:

References:

  1. https://www.consumerreports.org/car-insurance/10-tips-to-save-on-car-insurance/
  2. https://www.creditsesame.com/blog/insurance/largest-auto-insurance-companies-us/
  3. https://www.chicagotribune.com/classified/automotive/chi-car-insurance-myths-201112223-story.html
  4. https://www.forbes.com/sites/jimgorzelany/2017/06/19/the-cheapest-2017-cars-to-insure/#47570a2142ff
  5. https://www.iii.org/article/how-can-i-save-money-auto-insurance