Auto Insurance Advisor

Shop around
Car insurance rates vary widely from company to company, as much as $1000 difference or more a year — for the same coverage.

Even if your current company had competitive rates a year ago, their rates may have changed. So it pays to shop around and get free quotes from a number of insurance companies.

It costs you nothing to switch to a different car insurance company that better meets your needs. If you switch, be sure to ask for a refund of any prepayment from your current company.

Get the right car
If the cost of auto insurance is important to you, the car you choose can have a dramatic effect on how much you pay. Those cars that cost the least, have the least repair costs, are in accidents less often, and are stolen less frequently are the least expensive to insure.

In general, insurance costs for expensive luxury cars are considerably higher than for economy compacts. Sports cars have generally higher rates than family sedans. High performance cars in the hands of teenaged drivers will cost a small fortune to insure. Frequently stolen vehicles such as the Cadillac Escalade cost more to insure than cars with less "thief appeal."

Get the right coverage
Most states have laws that dictate the minimum liability insurance coverage you must carry. In these days of sue-happy accident victims and high medical costs, it is good to have as much liability coverage as you can afford. Remember, if you get sued for an accident and your insurance is insufficient, you may find your personal assets in jeopardy.

Collision and comprehensive insurance coverage for your own vehicle pays for the cost of repairs or for the value of your vehicle in case it is totaled or stolen. You could consider dropping collision coverage when your vehicle has aged to the point that your annual collision premiums are significant when compared to the vehicle's replacement value. Be aware that, if you still have a loan on your vehicle, your loan company may require collision and comprehensive coverage.

Gap protection
If your vehicle is totaled or stolen, your auto insurance is only going to pay the amount that the vehicle is worth, not what you still owe on a loan or lease. This point is misunderstood by many consumers. If you are "upside down" on a car loan or lease, you'll have to come up with the cash to pay off the remainder of the amount you owe. To prevent this situation, you need "gap" insurance. Gap coverage is usually included in leases, but almost never for loans. Unfortunately, gap insurance is a little hard to find. Some auto insurance companies offer it, some extended-warranty companies, and some dealers sell it.

Your deductible
One of the easiest ways to reduce your car insurance premium is to raise your deductible. For example, raising your deductible amount from $500 to $1000 can reduce your insurance costs by 30%. Just be sure that you would be able to afford the increased out-of-pocket expense in case of an accident. Lease companies often specify a maximum deductible, meaning you can't raise it any higher without violating your lease contract.

Your profile
Contact your auto insurance company and make sure your personal and family's driving profiles are accurate, and that you are getting all the discounts to which you are entitled. Your driving record, marriage status, age, commute distance, and home address can affect your insurance costs. Your credit history can also have an affect with some companies. Multiple-car discounts are available, as are discounts for vehicle safety features, anti-theft devices, and even good grades in school.

Auto insurance company ratings
JD Power publishes a rating of auto insurance companies that can be helpful in selecting a new insurance company. Some of the companies in the rating only do business in certain states. Furthermore, the evaluations do not include rate comparisons.

Most expensive states for auto insurance
According to Insurance.com, the most expensive states for buying auto insurance are, in order: District of Columbia, New Jersey, Massachusetts, New York, Connecticut, Delaware, Nevada, Rhode Island, Louisiana, and Arizona. These are states in which smart insurance shopping can have the highest payback.

Get your own rate quotes
Insurance companies and brokers provide free rate quotes that allow you to easily compare costs and coverages. The advantage of a broker is that they work with multiple companies and their services are free. We suggest the following companies:

21st Century Insurance Company is a well respected auto insurance company serving California, Arizona, Illinois, Indiana, Nevada, Ohio, Oregon, Texas, and Washington.They insure over 1.4 million automobiles and have an annual renewal rate of over 93%, which says something about how satisfied their customers are with the company. Their rates are some of the best in the industry.

InsureMe is an established and popular company, having been around since 1993. They have a network of thousands of participating insurance agents and companies across the United States, including in your neighborhood. Once you complete their online form, they match your profile to as many as five companies, who will provide you free rate quotes that you can compare and choose from. Remember, you are not obligated to accept any of the offers.

eInsurance is a free insurance pricing service that allows you to compare rates from different companies by simply filling out a free online form. By matching your profile with multiple insurance companies, their detailed application form ensures you will receive only quotes that best fit your particular situation. Try it. It's easy and quick.