Shopping for cheap auto insurance is difficult because most people don’t have a clue what they are looking for. Insurance companies and their brokers try to confuse you as much as possible by offering confusing terms, statistics, and a variety of advertising tools. By the end of this article, you will know exactly what to look for in a cheap auto insurance company. It’s just that simple!
Many factors affect auto insurance premiums. Factors such as population density (more individuals means a greater likelihood of claims), home area, property crime rates, weather, and state-mandated coverage minimums can have an extreme effect on auto insurance premiums. To accurately determine the effect of these factors on your premium, you need to understand how they impact your financial strength. Financial strength is a complex concept that is really best explained through an example. A homeowner with superior financial strength pays the lowest premiums on a given insurance policy. The reason that she has superior financial strength is that she has made wise decisions regarding her insurance portfolio.
Auto insurance companies offer a variety of discounts to attract drivers. Drivers with clean driving records and who are drug free are considered to be safer drivers. This means that insurance companies offer lower premiums to those with clean records and those who are drug free. Drivers with clean records and those who are drug free will typically pay less on premiums than drivers with traffic violations or DUIs.
The cost of driving will always be based on risk. The cost of insurance will always be based on liability insurance. Liability insurance protects an insured party from lawsuits arising out of an auto accident. States often require drivers to carry liability insurance. Some states also require uninsured motorist coverage as well.
Uninsured motorist coverage is an affordable option for people who do not have insurance. It covers the costs if someone is injured in an accident you are involved in. This type of coverage is not mandatory in most states. However, it’s definitely an attractive option. If you plan to drive across several states, or you often travel around on your job, it may be a good idea to get this coverage.
Another popular and affordable option is full coverage insurance. This option usually costs the most for the least amount of money. Full coverage insurance covers the costs of treating injuries to you and other people in the event of an accident. In the case of an accident, if there are injuries to you or other people, full coverage insurance will pay the difference between what the other driver’s insurance pays and what your policy pays.
Another thing to look out for in insurance quotes is that they will often times include a clause that states “good drivers” are going to be offered the lowest rates. Unfortunately, it is sometimes necessary for people with bad driving records to pay more money for coverage than “good” drivers. However, it is something worth working on if you are having trouble qualifying for some of the “good driver” discount options.
Some other things to look out for are the deductibles and limits of the insurance coverage. For example, if you have an at-fault accident, your premium is likely to go up if you don’t agree to an amount based upon how much damage was done to your vehicle. Another deductible to keep in mind is the amount of time that you must be off of your vehicle before you can be covered. The longer you’re off of your car, the higher your premiums will be. Finally, keep in mind that drivers in high-risk categories such as drunk drivers with multiple at-fault accidents, may find it difficult to qualify for affordable insurance rates.