With car insurance, you get what you pay for
We all know those insurance commercials: they all advertise their "fantastic" rates and somehow they’re all the cheapest. But when you read between the lines, you begin to see that cheap isn’t always the way to go with protecting your car. Still, here at The Zebra, we believe there are always ways to save on insurance without having to sacrifice quality or service.
If you're in the market to buy car insurance, your best place to look is online. Because there are many factors that determine your premium, you shouldn't get too attached to a company as the amount of variance is considerable. Your best bet is to shop multiple companies in order to see which company offers the best rate. Only with us can you shop hundreds of different companies at once using your specific information to get the best rate.
For more information what exactly goes into your rates, see here.
We get it. You can’t just move to a different state because living in Michigan (the most expensive state for car insurance) causes your insurance rates to be high. Just like there are times when you don't want to sacrifice customer service and claims satisfaction just to save a few bucks. Let’s break down the most common discounts and how much you can save.
This discount refers to having two types of insurance policies under one insurance company. Common policies are home/auto or renters/auto. Between a home/auto discount and a renters/auto discount, the discount is greater for the former - with homeowners saving an average of $110 per year while a renter typically saves an average of $72 on their auto insurance. The discount affects both your policies, but the amount above refers to your auto insurance only.
Average Savings for Bundlings
Telematics, or usage-based insurance, is a growing trend in the insurance industry. Basically, it uses an in-car device to track your driving habits. And, based on how you drive, will determine a premium that is more representative of the kind of risk you actually are to your insurance company. Currently, your age, credit history, and location are all big rating factors in most states for your premium that aren’t directly tied to how you drive. And, if you’ve been unemployed for awhile, your credit might take a hit. Here are some companies and corresponding potential discounts for telematics.
|Progressive's SnapShot||Average of $130|
|Allstate's Drivewise||Average of 10-25%|
|State Farm's Drive Safe & Save||Up to 15%|
|Nationwide's SmartRide||Up to 40%|
|Liberty Mutual's RightTrack||Average of 5-30%|
Consider, however, that not every state participates in these programs. Check with your company to see if you are eligible.
If your car comes with anti-theft devices or if you have services like LoJack, your insurance company usually provides a discount. The discounts tend to be smaller than a multi-policy or defensive driver discount, but can still help with making premium payments. On average, using a disabling anti-theft device can save you an average of $11 per year.
Average Savings from Safety Devices
|Safety/Anti-Theft Device||Avg Annual Premium||Discount|
|Passive Disabling Device||$1,312||$10|
|Electronic Stability Control||$1,318||$5|
Naturally, this discount is offered to you if you have a clean driving record, meaning no accidents or citations. This is typically a 10% discount and a lot of times it is automatically added to your policy when your Motor Vehicle Report or CLUE report is pulled at the inception of your auto policy. Still, if you are sure you have a clean driving record and are not receiving any discount, speak with your insurance company and ask if they offer a discount for good drivers. The added bonus of this discount is how costly any type of violations can be. So, by keeping a clean driving record, you get the discount as well as avoid these costly penalties, featured below.
Average Increase in Annual Premium in 2016
|Accident/Violation||6 Month Premium Increase|
|Speeding 11 - 15 MPH Over Limit||$141|
|Speeding 16 - 20 MPH Over Limit||$153|
|Speeding 21 - 25 MPH Over Limit||$165|
Many companies offer discounts for active or former military members and their families. The amount and qualifications differ per company but you should ask if your current company has this discount.
Like a multi-policy discount, a multi-car discount refers to having more than one car with a single insurance company. Typically, the discount is automatically added either at the policy inception (if two cars were originally added) or when you add the second vehicle to the policy.
This discount refers to the manner in which you make your insurance payments and has tiers, typically. For example, if you pay your entire premium up front, you are often given a discount which is usually the highest preferred payment discount. On average, a paid in full discount can save $62 per year on your auto policy. Moreover, if you set up automatic payments from a bank account, you can often receive an “EFT discount.” Here, EFT refers to electronic funds transfer and can save about $28 annually. If you are able to pay upfront or through automatic payments, this is a discount worth considering.
Average Rates by Electronic Funds Transfer
Average Rates by Payment Plans
|Paid In Full||Installments||Savings|
This discount goes by many names but the idea is the same. Some insurance companies will offer a discount based on your occupation. Statistically, some occupations like teachers, physicians, or police officers are less likely to file a claim and thus pose less of a risk. Because of this, some insurance companies return the savings back to you. Usually, they will require you to submit some type of proof of your profession—a photocopy of your degree is common.
If you have a young driver, you understand how expensive they can be to your insurance policy. Given the number of claims they cause, teenagers look like considerable risks for insurance companies and they charge accordingly for them. If your son or daughter has the grades, typically above a 3.0 GPA, speak with your insurance company about a good student discount. Normally, they’ll ask for a transcript every policy period (6-12 months) as proof.
Average Savings for Good Student and Good Driver Discount
|Average Teen||Average Male Teen||Average Female Teen|
You’ve heard the phrase “you get what you pay for.” Well, it’s the same for car insurance. Sometimes an insurance company is cheap simply because they offer very little in terms of customer support or because they cut corners in their claims process—leaving you to pick up the pieces. This is something to consider if an easy and reliable claims process or customer satisfaction is important to you when looking for cheaper options.
At the end of the day, even with all the discounts, car insurance can still be very expensive. You could be following all our advice and still be spending too much money on auto insurance. Because of this, we recommend you shop for car insurance every 6 months to ensure you're getting the best possible rate.
Because every person is different, it's hard to give specific advice on which company is actually the cheapest. Your best bet in terms of finding a company that matches you exactly is to shop around frequently. Only with The Zebra can you search hundreds of company at once in order to find the best rate for you.
Still, we do have some specific profiles with a company-by-company analysis you can look at. See which company is the cheapest below.