Should you shop around for car insurance?

Shopping for car insurance can save you hundreds, if not more, dollars. It can also get you the best policy and allow you to find the best car insurance agent and company. There are many car insurance shopping best practices, including asking for all possible discounts.

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UPDATED: May 4, 2022

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Written By: Laura BerryReviewed By: Joel OhmanUPDATED: May 4, 2022Fact Checked

Here's what you need to know...

  • To find the best deals on car insurance, you should shop around and compare rates for coverage
  • If you currently have insurance, check with your provider to see what discounts you qualify for
  • You will most likely receive a variety of auto insurance rates for an auto insurance policy based on a number of factors

Years ago, shopping for car insurance deals was a very complicated task. You would have to go through car insurance agents or make dozens of phone calls to compare prices. However, with better technology comes more opportunity for insurance shopping.

Nowadays, you can comparison shop and instantly receive detailed comparisons online. We’ll cover some of these methods and tips below. To jump right in, enter your ZIP code into our free online quote comparison tool.

Let’s get started.

How can you shop for a lower rate?

Why must you shop around for car insurance in order to receive a better deal? Simply put, the car insurance companies are in business to make money.

If you are willing to pay a high price for a standard policy, they are not going to convince you otherwise.

Therefore, it is your responsibility as an educated consumer to go to your insurance company and tell them you know the standard rates for car insurance and you need a policy that reflects those prices.

You really have to know the standard rates and average monthly car insurance premiums before you start asking for a discount. For instance, you have to consider the typical price of liability insurance, comprehensive insurance, and collision insurance.

You may also want to add on uninsured or underinsured motorist protection coverage.

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When Sourcing Car Insurance, Shopping Around is Necessary

Once you decide what policies are appropriate, you must decide how much coverage you need.

Experts recommend that you carry 100/300/100 in just liability coverage. State minimum coverage requirements are woefully lower. Of course, you will pay more for better coverage which is why many folks only take out the state required amounts.

To some extent, your age, car model, credit, and driving history will determine your monthly premium. However, do not conclude that every insurance company is going to offer the same rate.

While your insurance company is regulated by the state you live in, the actual price they give you is dependent on their own financial strategy and their understanding of current market trends as well as your risk factors.

Usually, when an insured driver stays with an insurance company for multiple years, the insured starts to expect a discounted rate — not only for loyalty but also for safe driving performance.

The company may be willing to offer the discount outright or may be waiting to see if you notice you’re overpaying.

There will be times when the insurance provider may not budge on a policy rate.

Maybe they’re suffering financially or are convinced that you are a high-risk driver. If so, then you have to take the initiative and start shopping for car insurance with a different insurance provider.

What is the best way to shop for car insurance?

Insurance companies are highly competitive, so you may be able to negotiate a price.

It may also help to tell your current insurance company that you have a competing offer. The original company may then offer you a discount.

Remember that the quote you initially get from an insurance company is not a hard estimate. It is a quote based on statistical averages. No company is going to give you an exact quote until all data is reviewed.

Be sure to check with any provider you are considering and ask about special discounts, such as:

  • Multiple driver policies
  • Theft devices
  • No claims discounts

You may also be eligible for savings from your current provider or another provider if you are a senior or a military veteran. We’re not just spouting hype for insurance companies. You can actually save money when you shop.

The prices you get from auto insurance companies also depend on a variety of factors, such as what type of auto policy you need. Do you need comprehensive coverage, collision coverage, personal injury protection (PIP), and underinsured motorist coverage? Or just bodily injury liability and property damage liability insurance?

You driver profile is pretty important here also, as your own clean driving record (or not-so-clean), credit score, location, and more are used to calculate your rates.

A recent shopping investigation conducted by San Francisco Chronicle found some interesting survey results, suggesting that a married people couple got 17 different prices from 17 different insurance companies.

In our list of 20 interesting car insurance shopping trends, we found that more and more people are using the Internet to shop for insurance, and that they are happier with the buying experience when they do.

Looking at those San Francisco Chronicle numbers, it’s easy to see why. The price range was between $1,422 a year to $3,651 a year for the same insurance policy. That shows how important it is to compare rates. Plug your ZIP code into our free quote tool to do just that and start saving today.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Written by Laura Berry
Former Insurance Agent Laura Berry

Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP® Joel Ohman

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