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.

Full Bio →

Written by

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.

Full Bio →

Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager

UPDATED: Nov 7, 2020

Advertiser Disclosure

It’s all about you. We want to help you make the right car insurance coverage choices.

Advertiser Disclosure: We strive to help you make confident car insurance decisions. Comparison shopping should be easy. We are not affiliated with any one car insurance company and cannot guarantee quotes from any single company.

Our car insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different car insurance companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

Key takeaways...

  • Insurance costs will vary by location, how many miles you drive, and the type of car you own
  • Comprehensive coverage protects you in case of fire or theft
  • Every state requires a minimum amount of liability insurance coverage for every driver that wishes to operate a motor vehicle

One of the greatest marketing lures used in advertising is the word “cheap.” The desire to save money has been transformed into a necessity in the current economy, and everyone wants to find the absolute best prices on necessities.

Car insurance costs can vary widely and depend on many factors including the costs assigned to each aspect of the policy by the insurance company.

Every insurer is different and the best way to find the cheapest car insurance annual premium is to compare car insurance companies for FREE by entering your zip code into our search tool above!

Table of Contents

Policy Coverage Components

Insurance costs will vary by location because crime rates and dense populations present higher risk of loss to the driver and the insurer.

Multiple components are standard in the auto insurance policy and adjusting the coverage amounts in these major categories can reduce the overall annual premium

The individual situation must be evaluated when the limits are set in each category to prevent a financial hardship in the case of loss.

  • Comprehensive – All events that are not directly related to a collision are covered under this policy component. Expensive vehicles should have this component with sufficient coverage to replace the vehicle, but older cars might not warrant this coverage. Fire, theft and storm damage would be covered under comprehensive insurance.
  • Collision – Whenever the vehicle is struck by another car or strikes a stationary object, the damage is covered under the collision component. Decisions to lower the coverage limit must be weighed against the motorist’s ability to pay for repairs. This component is not required by law, but financial resources must be available to repair or replace the vehicle.
  • Liability – Every state requires a minimum amount of liability insurance coverage for every driver that wishes to operate a motor vehicle. All lawsuit damages would be paid under this component up to the policy limit. This component limit should be sufficient to cover possible litigation associated with an accident. Damage to property belonging to another person is covered by the liability component.
  • Personal Injury – Medical expenses to treat the injuries sustained by other people in an accident are paid under the personal injury component. Cost-cutting measures in this category could be costly if the limits are set too low.
  • Medical – Many drivers choose to carry this component to cover any medical expenses for their own injuries sustained in an accident. This is an important component if other major medical insurance is not available.

Compare Car Insurance Companies

Compare quotes from the top car insurance companies and save

 Secured with SHA-256 Encryption

Compare quotes from the top car insurance companies and save

 Secured with SHA-256 Encryption

Auto Insurance Discounts

Each insurance company emphasizes certain aspects of the risk spectrum to offer discounts for certain behaviors and characteristics of the vehicle and driver status.

Ask about all possible discounts offered by each insurer to lower the annual premium in any possible way. Some obscure discounts are offered by insurers that wish to draw a certain group into their insured pools.

The following are some car insurance discounts:

  • Safe Vehicle – Insurers use the VIN to determine the safety measures on the vehicle at the time of manufacture. Airbags, roll bars, side impact bars and other safety devices lower the risk of injury and reduce the damage to the vehicle which reduces the actual cost of repair for the insurer.
  • Low-Mileage – Cars that are not driven often are considered lower risk than high-use vehicles that are on the road all the time. Every insurer evaluates the number of miles driven and assigns a different discount.
  • Group Discount – Certain professional groups are offered discounts by various insurance companies because of their perceived lower risk factors. Research and direct questions are the best way to find these discounts.
  • Anti-Theft Device – In high-crime areas, substantial policy discounts are offered for armored collars, kill switch, steering wheel lock and electronic ignition keys. These devices lower the incidents of theft which reduce the cost to the insurance company. Direct questions are the best way to find out if an insurer offers discounts for these devices.
  • Multi-Vehicle – When more than one vehicle is insured under the policy, each insurance company will offer certain discounts on the annual premium.

Driver Profile

Insurance companies weigh the risk factors directly associated with a driver differently so rates vary widely and research is required to find affordable rates if the driver is placed in a high-risk category.

Some insurers will refuse to underwrite a policy for a driver that has multiple moving violations and accidents, while others will simply assign an exorbitant premium to the policy.

This major category has more impact on the annual premium than any other.

  • Good Credit History – Acceptable credit score thresholds are set by each individual insurer and the rates will vary for the driver when the credit score changes drastically from one policy period to the next. Sustained good credit will lower the annual premium.
  • Senior Citizen – Older drivers are offered discounts by many insurers, but the discounts vary widely and apply to people above a certain age and below whatever age the insurer considers appropriate. Drivers over 80 will not have this discount because the risk level increases with age after a certain point.
  • Defensive Driving – Each insurer will place a different value on training completed by drivers. If attending a class will offer a 20 percent discount, complete the class to get the discount. Other classes are available and the insurance companies know how to find the training in your area.
  • Clean Driving Record – Moving violations and accidents within the past three years will have an impact on the annual premium, but the actual cost varies between the insurance companies based on their willingness to accept certain risk pools.

Final Decision

Every driver must make their own decision about which insurance company will offer the best combination of cost and coverage.

If one insurance company is substantially less expensive for comparable coverage, investigate the company’s claim payment record through A.M. Best, which is the insurance industry watchdog.

Making insurance payments to an insurance company that does not pay claims is not a wise decision.

You can find the cheapest car insurance! Enter your zip code below and start comparing car insurance quotes for FREE!

References:

  1. https://www.esurance.com/info/car/myth-comprehensive-covers-everything
  2. https://drivinglaws.aaa.com/tag/liability-laws/
  3. https://www.progressive.com/lifelanes/liability-coverages-explained/
  4. https://www.statefarm.com/insurance/auto/discounts
  5. https://www.edmunds.com/auto-insurance/does-your-credit-score-affect-your-car-insurance-rate.html