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Although it can be tempting to stay with the same company over the life of your vehicle, you can often save a substantial amount of money by changing to a different insurer.

Whether you’re looking for your first insurance company or considering switching for a better rate, it pays to look into multiple insurers and choose the one that’s best for you.

Enter your ZIP code above to easily compare auto insurance rates from several companies!

How Insurance Rates are Calculated

Insurance companies, like any other business, are interested in making a profit.

In order for an insurance company to be profitable, it must collect more money from its customers than it spends on paying claims, which is why risk management is crucial to insurance companies. It’s also why people with a history of accidents pay more for insurance than those with a clean driving record.

To determine how much a policy should cost, the insurance company will use a complex algorithm that takes several factors into account to determine the driver’s risk level.

This calculation takes place every year when a driver’s policy renews, and it’s also utilized when a new driver obtains a fresh quote.

Why Insurance Rates Vary Between Companies

To some extent, insurance prices are regulated by the state. Within these legal parameters, however, rates can vary substantially due to discounts.

In other words, the base rate of most insurers are the same, but those rates are modified by discounts and rebates.

These rebates are primarily offered as a way to entice the safest drivers to join a specific company.

It’s in the company’s best interests to predominately insure drivers who will never need to use the policies they buy.

Here are just a few of the most common factors that can result in low rates:

• Driver’s age
• Driving history, including accidents and citations
• Safety features installed on the vehicle
• Driver’s annual mileage

Although most insurance companies will reward their drivers for safe behaviors, some place a greater emphasis on some behaviors than others.

The key to getting the best rates is to shop around until you find the company whose discounts most closely match your own personal driving habits.

Taking Advantage of Competition

Insurance companies tend to be very competitive when it comes to their policies. Insurers often undercut each other when offering discounts.

Once a person has a policy, he doesn’t need a second one. Therefore, an insurance company can only get a new customer by attracting a brand new driver or by taking an existing driver away from a competitor.

Attracting new drivers is a risky proposition because new drivers do not have established histories of safe driving, and they’re more likely to get into accidents than more experienced drivers.

Additionally, most new drivers are teenagers, and teens are usually not responsible for buying their own auto policies.

Instead, their parents buy the policies for them, and their parents likely already have their own insurance coverage.

Therefore, insurance companies must focus their attention on convincing drivers to leave their current company in favor of a new one.

This is why it’s so common for insurance commercials to highlight stories of how much a driver can save by switching to a new policy.

How to Comparison Shop for the Best Rates

The Internet makes it simple to check rates of multiple insurance companies.

Where it was previously necessary to go through a broker to get information about an insurer, it’s now possible to get a quote from numerous companies simply by filling out one form.

The quote request process is quite simple. You will be asked to fill out some basic information about yourself and the vehicle you plan to insure.

Here are a few of the things you may need to fill out:

• Your name and contact information
• Your age, marital status, and gender
• The year, make, and model of your vehicle
• Whether you’ve been involved in any accidents
• How many traffic citations you have received
• Whether your vehicle is equipped with safety features

This information will be used to match you with insurers and provide you with an estimated rate.

From here, you can decide which insurers you’re interested in hearing more from and request that they contact you to continue with the process.

Making a Decision

Bear in mind that the insurance quote you receive at this time may not be the final cost of your policy.

The rates given online are often generalized rates for the average person with information similar to yours, and they don’t always include every discount that a driver may qualify for.

Additionally, your quote may need to be adjusted by factors like your driving history and credit score, which will need to be validated by the insurer after the initial quote is requested.

Nevertheless, the rates posted online can give you an idea of what you might expect to pay for auto insurance, and they should help you decide between two companies.

The best part of obtaining an insurance quote online is its speed and convenience.

It takes only a few minutes to fill out the form and get instant access to quotes from a number of insurance companies. Then you’ll be able to make an educated decision about the best insurer to suit your needs.

Be sure to enter your ZIP in our FREE quote tool for easy comparison!

Auto Insurance Tips

10.10.2020 / auto insurance quotes / auto insurance tips / cheap auto insurance