Money Matters » How to get the Best Deal on Car Insurance

How to get the Best Deal on Car Insurance

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Car insurance rates are dependent upon many factors. Some of these factors you can’t change, like your age or gender. It’s so unfair right! Be that as it may, there are actually lots of ways that you can lower your rate. Here’s how…

First, let’s look at what might be included in your insurance plan:


  • Bodily injury liability: Covers injury, legal costs, and death claims against you, if you’re found at fault for an accident.
  • Property damage liability: Covers claims for property or vehicles that your car damages in an accident.
  • Uninsured motorist protection: Covers injuries caused to you or the occupants of your car by uninsured or hit-and-run drivers. (In some cases it even covers vehicle damages)
  • Collision coverage: Covers damage to your car up to its book value. Collision coverage carries a deductible, which is the amount per claim you have to pay before the insurance takes effect. The lower the deductible, the higher the premium. While it is legally optional, a lending institution or leasing company usually requires collision coverage.
  • Comprehensive (physical damage): Covers damage to your car from theft, vandalism, fire, wind, flood, and other non-accident causes. Comprehensive also carries a deductible.
  • Roadside assistance– provides towing, jump start, lock-out, and other emergency assistance.
  • Car rental– Provides a rental vehicle while your vehicle is being repaired due to accident related damages. Rental services have a maximum value which determines how long you can use a rental vehicle without paying for it out of pocket.

Ask yourself, What do I really need? Everyone is required by law to carry liability coverage. If your vehicle is being leased or was purchased with a vehicle loan your lender generally requires that you carry collision and comprehensive coverage in addition to liability.

If you already have AAA or your vehicle is fairly new it most likely comes with road-side assistance and perhaps even car rental services. If that’s the case, opt out of these two services. It will lower your insurance rate. In any case, it might be a better deal to go with AAA on these services since they offer more services in addition to discounts at thousands of businesses.

No matter what you drive you should carry uninsured motorist protection, even if your car isn’t worth much. If someone hits you and they don’t have insurance, or they drive off (it does happen), uninsured motorist protection will cover your medical bills should you become injured. In some cases, it will even cover vehicle damages. If you are seriously injured it will pay for lost work time, and if you died in such a situation, it would provide your family with money for your funeral and funds to help cover the loss of your income.

I once had a teenager crash into my vehicle after he ran a stop sign. He totaled my car, but thankfully no one was injured. The boy had no insurance. I took him to court multiple times, but because he was on disability the judge said that he couldn’t be forced to repay us. Ever since that accident, I have carried uninsured motorist protection. Don’t get stuck with the bill, protect yourself from irresponsible drivers!

Insurance companies generally offer discounts for having any of the following:


  • Multiple policies with a company – life, homeowners, renters, etc.
  • Being a member of various organizations– Being a member of a bank, an alumni association, or even BJ’s Wholesale Club can get you a discount. Be sure to ask for a full list of membership based discounts.
  • Being a college student or Good Student Discount-this requires you to provide proof such as student or proof of GPA from the School Guidance Department on School Letterhead
  • Having extra vehicle safety features– Having Onstar, airbags, a car alarm, or other safety features often results in a discount.
  • Having good credit– Be sure to check your credit regularly to make sure that identity theft isn’t driving up your car insurance rates. And if your credit isn’t in the best state due to financial struggles you may want to look into debt consolidation so you can begin raising your less than stellar rating. Some insurance companies will even overlook a bad credit rating if you have a good explanation for your low scores, such as an injury, the death of a spouse, or a layoff.
  • Driving under 10,000 miles annually– Insurance companies generally rely on customer reporting. The only times that they usually check exact mileage is by reading your odometer after an accident claim has been made, or if you have a device from your insurance company installed on the vehicle.

If you want to lower your insurance rate you might also consider trading your vehicle in for something a bit more insurance friendly. Having any of the following vehicle features can significantly raise insurance premiums:


  • Poor vehicle safety ratings or recalls
  • Having a two-door vehicle instead of a four-door vehicle
  • Having a sports car
  • Having rear wheel drive instead of front wheel drive
  • Having a 6 or 8 cylinder engine instead of a 4 cylinder
  • Having expensive vehicle-Insurance companies take into account the cost of replacing your vehicle. The more your vehicle is worth, the more it will cost to insure.

Since accidents raise insurance rates you might want to think twice about reporting minor damages. If repair costs are close to the value of your deductible, you should pay for the repairs yourself without involving your insurance company. Rates often increase after a claim and can stay at that higher rate for years afterward.

Shortly after my son got his learners permit he side-swiped a large dumpster on our property. My deductible was $500 and the cost of repairs was $800. If I had reported the incident the insurance company would have paid the extra $300, but it’s likely that they would have gotten the $300 back and a lot more in higher premiums.

Another way to keep your costs low is to switch insurance companies frequently, generally at the time of renewal. Even though I had never made a single claim on my insurance, my rates continued to rise year after year. Most insurance companies raise their customer’s rates the longer you stay with them.

Competing companies want your business and they’re willing to give big discounts to get you to switch. One of the easiest ways to find a good deal is to search ‘Auto Insurance Quotes’ online or free auto insurance quotes.

You’ll quickly be able to scan multiple insurance company offerings in seconds online.

It’s no big secret that traffic violations increase your insurance rates for years after a violation has occurred. Most of us have been caught speeding at some point, often when speed traps are set up to aid police departments in making monthly quotas. If you are polite and quickly give an officer your documents they will generally let you off with a warning. Don’t admit guilt, but never argue with a cop, even if you’re right! What you say can be used against you in court, and the more you hassle an officer the more likely it is that he will make it a point to see that you are punished for your transgression.

After a traffic stop record all relevant information and take pictures of the location involved right away. This will help you recall vital information later on and provide the court with visual evidence of flaws in an officer’s account of events. Maybe a speed sign was covered by vegetation or a police officer had an obstructed view. Always contest the ticket, even if you know the officer has you dead to rights. There are many reasons why an officer might not make it to court. They may be out sick, held up at a crime scene, or out on vacation. If an officer fails to appear for the court date, the case is automatically dismissed.

Most courts are also so backlogged that court dates are scheduled for months after a ticket is issued. If you have the court date rescheduled it will not only buy you some time to continue paying a lower insurance rate, it will also increase the likelihood that the ticket will get lost in the system. It happens more often than you think.

On one final note, car rental companies generally require renters to carry full coverage. Many credit cards automatically come with insurance for all purchases and rentals made with a card. If you pay for your rental with one of these cards you are not required to purchase insurance from the rental company. This can save you big bucks, especially when renting for an extended period.

See more about comparing Credit Cards for the best car insurance protection here

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