Evaluating auto insurance quotes can prevent tons of of {dollars} a yr – right here's why – Fox Enterprise

Auto insurance premiums vary from one insurer to another, so it is important to compare rates when buying a new policy. (iStock)

According to the latest data from the National Association of Insurance Commissioners (NAIC), auto insurance premiums cost an average of $ 99 per month. But depending on your coverage, what type of car you have, how long you've driven, where you live, and other factors, this price can fluctuate dramatically.

Prices can also vary widely from company to company, which is why it is so important to look for the best deal on auto insurance before committing to an insurer.

Read on to learn why car insurance rates vary so much and how you can get a more competitive rate when you shop. On Credible you can compare offers from several car insurers at the same time.

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Car insurance discounts vary by insurer

Insurance companies offer discounts for drivers who meet certain criteria and selected companies offer discounts that better suit your needs. These discounts can typically save you between 15% and 20% of the cost of your policy, which can translate into significant savings over time.

Here are some of the most common types of discounts:

  • Safe Driver Discounts: You have a clean driving record if you have not had an accident in the last three or five years. Some insurers offer additional discounts to drivers taking defensive driving courses.
  • Student discounts: Insurers usually give students a discount.
  • Safety equipment discounts: Examples of this are airbags, anti-lock braking systems, anti-theft devices and daytime running lights.
  • Multiple vehicle discounts: This is a type of loyalty discount that families can use to save on a multi-car policy.
  • Discounts for military and federal employees: Many insurers offer discounts for military personnel and other civil servants, and some insurers only serve these drivers.
  • Bundling discounts: If you take out your home and car insurance with the same provider, you can save up to 30% on premium costs.

Select insurers may offer stronger discounts that are tailored to you. Find out what type of auto insurance discounts you qualify for by shopping on Credible.

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Insurers weight factors differently

It is common knowledge that your driving history affects the cost of car insurance. According to PolicyGenius, a culpable accident can increase your insurance premium by 28%. Risky behavior by drivers such as driving under the influence (DUI) or reckless driving will drive costs even higher.

But your driver's license isn't the only factor that determines the cost of your policy. Insurers also take into account:

  • Where you live
  • How much do you drive
  • The type of car you are insuring
  • Your age, gender, and even marital status
  • Your creditworthiness
  • Whether you own or rent your home

Every auto insurance company weights these factors differently, so do your research before choosing an insurer. For example, select companies may offer a more competitive car insurance rate for teenage drivers, while other drivers with less than outstanding driving records may be more forgiving.

Researching each auto insurer can take time and effort, but there is a better way. On Credible, you can compare rates for multiple car insurances in a few minutes.

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Car insurance premiums tend to increase over time

According to the Bureau of Labor Statistics, the cost of auto insurance increased 47% between 2011 and 2021. The premiums are reset every six months, which is usually the case when insurers implement a rate hike.

It is beneficial to shop around and compare car insurance quotes if your premium is about to expire. Ask your current insurer if your premium will go up when you renew and use this information to see if you are still getting a fair price on your auto insurance.

When it's time to renew, you can also consider adding or removing certain coverage from your policy, such as: Fully comprehensive insurance is usually more expensive, but can save money in the event of an accident.

When your policy expires, make sure your new tariff is competitive by comparing auto insurances on Credible. A car insurance quote is free and does not affect your creditworthiness.

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Do you have a finance-related question but don't know who to contact? Send an email to the credible money expert at moneyexpert@credible.com and your question may be answered by Credible in our Money Expert section.

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