Smart Ways To Secure An Affordable Auto Insurance Policy

Car insurance is a necessity for all car owners, but it doesn't have to be expensive. While the cost of your insurance will depend on your personal circumstances and the company you choose, it is possible to get a policy for less than $100 per month. The cheapest option is usually liability-only coverage, but this may not provide enough protection in the event of an accident. Full coverage insurance is more expensive but offers more protection and is recommended if your car is valuable or you have assets or savings. To get the best deal on your car insurance, shop around and compare quotes from different providers, choosing the same coverage, policy limit, and deductible amount for each. You can also increase your deductible, reduce your mileage, and ask about other discounts to lower your premium.

Compare quotes from different companies

Comparing quotes from different companies is an essential step in finding the best auto insurance policy for your needs and budget. Here's a detailed and instructive guide on how to compare quotes from various companies:

• Coverage Options: When comparing quotes, ensure that you select the same coverage options across the board. The specific coverage options available may vary by state, but typically include bodily injury coverage, property damage coverage, and uninsured motorist coverage. You may also want to consider additional coverage options such as emergency roadside assistance, rental reimbursement, and mechanical breakdown insurance.
• Policy Limits: Policy limits refer to the maximum amount that an insurance company will pay out for a covered loss. When comparing quotes, be sure to choose the same policy limits for each company. This will allow you to accurately assess which company offers the best value for your desired level of coverage.
• Deductible Amount: The deductible is the amount you will have to pay out of pocket before your insurance coverage kicks in. When comparing quotes, consider how much you are able to pay towards repairs or other expenses. Typically, choosing a higher deductible will result in a lower overall premium.
• Rates and Discounts: Different insurance companies will offer varying rates for the same coverage. Be sure to research and compare the rates offered by different companies. Additionally, many insurers offer discounts for things like safety features, bundling policies, or being a safe driver. When comparing quotes, factor in any discounts you may be eligible for to get a true sense of the final cost.
• Customer Service and Reputation: In addition to the financial aspects of the policy, consider the level of service and overall reputation of the insurance company. Research their customer service ratings, claims handling process, and overall customer satisfaction. You can often find reviews and ratings on third-party websites or by asking for recommendations from friends and family.
• State Requirements: Auto insurance requirements vary by state, so be sure to familiarize yourself with the minimum coverage requirements in your state. This information will help you understand the baseline coverage you need and allow you to make accurate comparisons between insurance companies.
• Your Personal Information: When obtaining quotes, you will need to provide some personal information, such as your age, gender, marital status, driving history, and vehicle information. Having this information readily available will streamline the process of comparing quotes.

By following these steps and considering multiple quotes, you can make an informed decision about which auto insurance policy best suits your needs, budget, and preferences. Remember to read the fine print and understand the specifics of each quote to ensure you are getting the coverage you need at a price you can afford.

Consider liability-only coverage

If you're looking to get an auto insurance policy for $100, you may want to consider liability-only coverage. This type of insurance covers third-party property damage and personal injuries in the event of an accident. It's important to note that this insurance will not cover your own injuries or property damage as the driver responsible for the accident.

Liability-only insurance is a more affordable option than full coverage, as it provides less financial protection. It typically includes bodily injury liability and property damage liability coverage. Here are some things to consider when deciding if liability-only coverage is right for you:

• State Requirements: Most states require drivers to have a minimum amount of auto insurance to drive legally. This usually includes liability coverage, and some states mandate additional types of coverage, such as personal injury protection (PIP) or uninsured motorist coverage. Check your state's requirements to ensure you comply with the law.
• Cost of Coverage: The cost of liability-only insurance will depend on factors such as the coverage limits you choose and your driving record. Higher coverage limits will generally result in a higher premium. However, liability-only insurance is still a more affordable option compared to full coverage.
• Your Vehicle's Value: If you drive an older or low-value car, liability-only coverage may be sufficient. The cost of repairing or replacing your vehicle might not justify the higher premium of full coverage.
• Financial Situation: If you can comfortably pay for car repairs or a new car out of pocket, liability-only insurance could be a good option. This is especially true if you live in an area with low traffic and a low risk of accidents, reducing the likelihood of needing to make a claim.
• Risk of Accidents: If you don't drive frequently or live in an area with low traffic, you may be less likely to get into an accident. In this case, liability-only insurance could provide sufficient coverage.
• Age of Drivers: Young or first-time drivers are statistically more likely to be involved in accidents. While they may be tempted to choose minimum coverage to save money, full coverage can offer better financial protection for these higher-risk drivers.

Remember, liability-only insurance does not cover damage to your own vehicle. If you're comfortable with the risk of paying for repairs or a new car out of pocket, then liability-only coverage may be a suitable option. However, if you prefer more comprehensive protection, consider full coverage, which includes collision and comprehensive insurance.

Ask about discounts

Getting an auto insurance policy for $100 or less is possible, but it requires some research. When looking to get an auto insurance policy at this price, it is important to ask about discounts. Here are some discounts to look out for and ask about:

Multi-Policy Discount

This discount often applies when you buy car insurance and another policy, such as home insurance, from the same company. This is also called a "multi-line discount" or "bundling". This is usually one of the biggest discounts, often between 5% and 25% off. You can also bundle car insurance with other insurance policies such as renters, condo, motorcycle, boat, RV, and life insurance.

Vehicle Safety Discounts

If your car has safety equipment like anti-lock brakes, airbags, and daytime running lights, you may be eligible for a discount. Airbag discounts for full-front seat airbags can be as much as 40% applied to your medical payments or personal injury protection coverage. Cars that are less than three years old can often qualify for a new car discount, typically between 10% and 15%.

Anti-Theft Device Discounts

If your car has anti-theft features, you can usually get a discount of up to 5% to 25% off your comprehensive coverage. This may apply to both factory-installed and after-market-installed devices. Some anti-theft devices include GPS-based systems, stolen vehicle recovery systems, and VIN etching.

Good Driver Discounts

Car insurance companies often reward good drivers with savings. A car insurance company will typically require you to be incident-free for a certain amount of time. For example, Geico offers up to 26% in potential savings if you haven't had any accidents in five years. Good driver discounts often range between 10% and 40%.

Defensive Driver Discounts

Some insurance companies will give you a discount if you take an approved defensive driving course. This discount may only apply to qualified drivers of a certain age, typically 50 or older. Defensive driver discounts typically range between 5% and 10%. Some states mandate this discount for mature drivers.

Good Student Discount

If you or your student driver is enrolled full-time at a high school or college and meets certain requirements, you could qualify for a discount. Car insurance companies typically require the student to maintain at least a B average and be aged 16 to 25. Good student discounts range between 8% and 25%.

Student Away at School Discount

If your student is away at school and without a car, you may be eligible for a discount. Requirements vary among car insurance companies, but the student is usually required to be under 25 years old, more than 100 miles from home, and with access to your car only while at home during school vacations and holidays.

Pay in Full Discount

If you pay your full policy term upfront, car insurance companies typically offer a discount. Top companies show a discount range of 6% to 14% if you pay in full instead of breaking your insurance bill into monthly payments.

Electronic Funds Transfer (EFT) Discount

If you pay in installments, you may be able to get a small discount for using automatic withdrawals. The EFT discount can range from 3% to 6%.

Paperless Discount

If you're willing to go paperless, you'll get your policy documents and billing electronically, and the insurance company may offer a small discount. This discount isn't as common as it used to be, now that people tend to prefer paperless systems. The average discount is 3% but ranges from 6% with Farmers to 1% with Progressive.

Online Quote Discount

Some car insurance companies will offer a discount if you get an online quote and sign up for a policy. This can range from 4% to 12%.

Advance Quote Discount

Shopping around and buying a policy in advance of your current one expiring can bring about a discount. Companies vary on how many days in advance you need to buy to get a discount, but around seven to 14 days is typical. The discount usually ranges between 2% and 15%.

Occupational Discounts

Depending on your occupation, you might qualify for discounts. For example, Liberty Mutual offers special policy features for educators, and Geico offers up to 15% off for military personnel.

Usage-Based Insurance Program Discount

Your insurance company might offer usage-based insurance (UBI), which adjusts insurance rates based on how often and how well you drive. Most UBI programs offer a discount for enrolling (between 5% and 10%) and then a further discount based on your actual driving habits, typically applied at policy renewal time. If you're a good driver, a typical UBI discount could be anywhere between 5% and 40%.

Increase your deductible

Increasing your deductible is a great way to lower your auto insurance costs. A deductible is the amount you pay before your insurance policy kicks in. By requesting a higher deductible, you can lower your insurance costs. For example, increasing your deductible from $200 to $500 could reduce your collision and comprehensive coverage cost by 15 to 30%. Going to a $1,000 deductible can save you 40% or more.

However, before choosing a higher deductible, ensure you have enough money set aside to pay it if you have a claim. Take a look at your emergency fund before moving forward with a change to your auto insurance. If your emergency savings are strong, then increasing your deductible may be a good move.

Your deductible and premium tend to have an inverse relationship. The higher your deductible, the lower your premium, and vice versa. So, if you don't drive often and feel you are less likely to get into accidents or sustain vehicle damage, a higher deductible could be a good idea.

It's important to note that some states have low liability minimums, with California and Pennsylvania requiring as little as $5,000 for property damage coverage. If you're considering different coverage levels, it's recommended to aim for at least 100/300/100 in liability coverage.

Downgrade your coverage

Downgrading your auto insurance coverage can save you money on your monthly premiums. However, it will also reduce the financial protection you receive from your insurance company if you get into an accident or something else happens to your vehicle.

• Your car's age and mileage: If your car is old and has a lot of miles, it may not be worth much, and you may be able to repair it or buy a new one if you get into an accident. In this case, you may not need as much coverage.
• Your emergency fund: If you have a large emergency fund, you may not need certain types of coverage or as much coverage as you currently have. For example, if you have the savings to repair or replace your car in the event of an accident, you may not need comprehensive or collision coverage.
• Your loan status: If you own your car outright, you may no longer be required to maintain collision and comprehensive coverage. While you may choose to retain this coverage, you have the option to drop it if needed.
• Your deductible: Even if it doesn't make sense to eliminate collision and comprehensive coverage, you can reduce your premiums by increasing your deductible for those coverage options.

It's important to remember that different states have different requirements for auto insurance coverage, so be sure to check your state's minimum requirements before making any changes to your policy. Additionally, consider whether you have enough coverage to protect yourself financially in the event of an accident. For example, if you cause an accident and don't have enough liability insurance, the other driver's insurance company may sue you to recoup their costs.

Frequently asked questions