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 15, 2020

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Key takeaways...

  • Car insurance or some form of financial liability is required in most states
  • Liability insurance for property and bodily injury is required almost everywhere
  • There are a number of factors that determine how much you will pay for insurance

If you have a discounted rate for your car insurance, you may be wondering how long it will last and if it is too good to be true. How long it will really last depends on what the reasons are for the discounted rate.

They may be because of the insurance provider you are using or they could be due to specific discounts offered by the provider.

Because car insurance is a requirement in most states, it isn’t a question of whether you should get insurance or not. The question for many is how and where to find the best rates for their car insurance policy.

Begin a search for your own discounted car insurance rates by entering your zip code in the FREE quote tool above!

Table of Contents

Car Insurance Requirements

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Car insurance is no longer an option in most states. Damages from car accidents can be huge, both to the vehicles and to the driver and passengers.

Without insurance, the driver who caused the accident is personally responsible for all expenses. If the driver has no money, the other party is left to pay.

To help prevent financial ruin, states started to set minimum requirements for car insurance for all drivers.

Liability insurance for property and bodily injury is required almost everywhere. Some states also require uninsured motorist insurance.

This insurance seems redundant, but unfortunately, even with the insurance requirements, there are still approximately 14 percent of drivers who are out there driving without coverage, according to the Insurance Research Council.

Along with the types of insurance necessary, states have also set minimum liability amounts that refer to the maximum paid by the insurance company for bodily and property damage.

To find out what is mandatory in your state, check out the state directory on the National Association of Insurance Commissioners’ website.

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Discount Car Insurance Companies

If saving money on car insurance is a priority, there are a number of companies that advertise discounted insurance rates. These companies are usually found on the internet by doing a general search.

Although these companies advertise discounted rates, keep in mind that you often get what you pay for. Many of the discount companies are able to advertise low rates because they are offering basic policies.

This usually refers to the minimum required by your state and sometimes a little more, but not always.

The major point of having insurance is being financially covered in the event of an accident.

If you are only paying for the minimum insurance, it may not be enough to cover you fully and you will end up paying out of your own wallet for some of the expenses.

The kind of company it is can also make a difference. You don’t want to sign a policy with a provider who is unstable, can’t pay for claims, or won’t be around for the long term.

How to Choose the Right Car Insurance Company

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When you find a car insurance quote that seems too good to be true, do some research into the company. Go to a website such as A.M. Best and look into the financial stability of the provider.

Also, contact your state insurance department and ask if there have been any complaints made against the insurance company in question.

If you hear or read about claim complaints, you would be smarter to pay a little more for your premiums and go with a more reputable provider.

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Who Can Take Advantage of Discount Car Insurance Rates

Just because a company offers discounted car insurance rates doesn’t mean that they will apply to everyone.

There are a number of factors that determine how much you will pay for insurance.

If you have factors that cause you to fall into the high-risk group for insurance, you will end up paying more for your policy. These high rates will apply no matter what company you choose.

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What Can Increase Your Car Insurance Rates

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There are a variety of things that affect how much you will personally pay for car insurance.

Some are more out of your control, such as the make, model, and year of your vehicle, and the zip code in which you live.

You may not understand why, but many insurance companies will base your insurance rate partly on your credit history.

This is because how responsible you are with money seems to have a direct correlation with how responsible of a driver you are.

If you find that your credit score is low, there are ways to increase it.

It may take awhile, but if you are diligent and determined to increase your score, you can. My Fico offers tips on how to improve your credit.

One of the biggest factors in figuring out your car insurance rate is your driving history.

How you have driven in the past is a huge determinant as to whether you will receive a discounted rate on your policy or not.

Past accidents, speeding tickets, and other traffic violations will cause your rates to be higher.

If you are not considered to be a high-risk driver, there are other ways to get discounts on your insurance. Most car insurance companies will offer certain discounts to drivers to help keep their rates down.

Discounts Offered by Insurance Companies

To reward safe drivers, many insurance providers will offer discounts. If you are eligible to take advantage of some of these discounts, you may be able to save to 20 percent on your insurance rates.

One discount that many drivers are able to take advantage of is the multi-policy discount. If you have homeowners or renters insurance, you can save money by getting this and your car coverage with the same insurance company.

If you have homeowners or renters insurance, you can save money by getting this and your car coverage with the same insurance company.

This is also true if you insure multiple vehicles with the same provider.

Some will give you a discount if you haven’t filed a claim in three years, while with others it may be a five-year time span. Some will also offer you a discount if you switch your policy from another company.

Car insurance tends to be very high for teenagers. You can save some money with the good student discount, which rewards student drivers with a “B” average or above.

The features on your vehicle can save you money as well. Anti-theft devices can net you a discount since they decrease the chances that the vehicle will be taken.

Many drivers choose to pay their insurance premium on a monthly basis in order to budget their money better. If you are able to pay it on an annual basis, you will often save 10 percent on your premiums.

Just as how you drive can negatively affect your insurance rates, it can also benefit you. Many insurance providers will offer safe driving discounts.

You may receive a discount for taking a safety driving course or for driving accident-free for a certain amount of time.

Length of Discounts

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If you are currently enjoying a discounted rate on your car insurance, you may be wondering how long it will last.

If you have a policy with a discount car insurance company your rates will normally not change for a year, as they are often year-long policies.

About a month before your policy renewal is due, most insurance companies will do another background check on you. They will check your credit score and driving history again.

If things have changed, there is a good chance your rate will change as well. This may increase or decrease your rate.

If you are taking advantages of specific discounts from your insurance company, these discounts will more than likely continue with your renewal as long as nothing has changed.

Most discounts will last at least the length of your policy, but there are exceptions. If you have had a major traffic violation there is a chance your policy rate will increase immediately.

There is also the chance that your current policy will be canceled and you will need to start a new search for a policy.

A quick and easy search for car insurance rates can be performed right now by entering your zip code in the FREE tool below!

References:

  1. https://www.statefarm.com/insurance/auto/coverage-options/liability-coverage
  2. http://www.insurance-research.org/research-publications/uninsured-motorists-2011-edition-march-2011
  3. http://naic.org/state_web_map.htm
  4. https://www.thebalance.com/understanding-minimum-car-insurance-requirements-2645473
  5. http://www.ambest.com
  6. http://www.myfico.com/CreditEducation/ImproveYourScore.aspx
  7. https://www.directgeneral.com/learning-center/explaining-auto-insurance/high-risk-auto-insurance
  8. https://www.libertymutual.com/multi-policy-discount
  9. https://www.statefarm.com/insurance/auto/discounts