The Cheapest Auto Insurance Company for You
One of the most common questions fielded by any auto insurance website or agent is this one: “Which company offers the cheapest auto insurance?”
If that question were easy to answer, there would be no need for auto insurance comparison tools, online auto insurance quotes or even, for that matter, insurance agents. The simple fact is that no single insurance company offers the cheapest car insurance for every situation. In fact, you and your next-door neighbor can submit quotes to the same three companies for vehicle insurance for the same vehicle and six completely different quotes for your insurance. There’s a better than even chance that the company that offers him the lowest premium for car insurance will not be the same company that offers you the lowest premium – even if you’re covering the same car in the same neighborhood.
Why Insurance Premiums Differ So Much
Insurance companies set their premiums based on risks – the riskier it is to insure a particular car and driver, the higher the premium will be. If all of the insurance companies were working from a single, standardized risk table, it would be relatively easy to compare rates for insurance. Car insurance companies, however, are allowed to set their premiums based on their own experience with risk instead of on standard, industry-wide risk tables.
That means that each company is working from a different set of facts when deciding how much to charge you for car insurance. And that’s just the start of the difference. Each company also decides what factors they’ll count when coming up with a risk factor for you. One insurance company may place a greater weight on your age while another places greater emphasis on the car you drive. One company may consider your marital status and whether you have children when assigning risk while another considers those to be lesser factors than your driving history.
And to top it all off, insurance risk tables and the formulae that insurance companies use to assign risk are considered to be industry secrets, akin to the Google search algorithm or the recipe for KFC. Since each company devises its own formula and keeps its own risk records, it’s nearly impossible to predict which company will offer you the lowest car insurance premiums.
Most insurance and financial experts recommend shopping around for the best rates when buying auto insurance. You should get quotes from at least three different vehicle insurance companies before making a final decision on the best deal. They also recommend that you check quotes on auto insurance each year before renewing with your current company. The company that offered you the cheapest auto insurance premiums this year may not be the cheapest car insurance company next year. This is especially important to do if your insurance premium goes up when it’s time to renew.
In the end, the only way to be sure that you’re getting the best combination of coverage and price from your auto insurance company is to do your own research. Shop around, get quotes from several companies and check periodically to make sure that you’re still getting a good deal on your auto insurance. No one should have to pay more for auto insurance than he has to pay.
Chris Robertson is an author of Majon International, one of the world’s MOST popular internet marketing companies on the web.
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