Average car insurance rates in the U.S. are about $1,200 per year, but most drivers either pay much more or less than this amount. Auto insurance quotes vary depending on the type of car insurance coverage and options purchased, geographical area, risk profile, vehicle make and model, driving history, credit history and scores, and how the different insurance companies want to calculate rates based on their statistics. Most people can find lower insurance rates by comparing free quotes online to get the best car insurance.
Liability insurance is required in all 50 states and is available in different amounts. Liability coverage protects the insured person by paying for damages and injuries to others in accidents where the insured person was at fault. Collision coverage pays for damages to the insured car caused in an accident and comprehensive insurance pays for damages from other causes like theft, vandalism and weather. Other coverage types include rental car insurance, roadside assistance, medical payments, uninsured motorist and personal injury protection.
How Much Liability Coverage Is Enough
Every state, except Florida, has a minimum requirement for liability insurance which can be as low as $15,000 per person and $30,000 per accident for injuries, and $5,000 for property damage. Damages from a single accident can easily exceed these limits, so individuals that have assets like property or financial accounts should carry higher limits. If a legal judgment goes over the limit of the available insurance, the injured parties can get the money from the insured person’s assets. Car insurance rates for additional liability coverage are fairly low for most drivers.
Collision Insurance and Deductibles
Many people pay for collision insurance on older model cars that have low values. If a car is more than 15 years old and has a value of less than $2500, it is probably best to drop the collision insurance coverage. Deductibles for collision insurance are usually $500, but drivers can save money on auto insurance rates by choosing a higher deductible like $1000 or $1500. Not all drivers can afford to pay $1000 out of pocket if they have an accident, and those drivers should consider paying the higher premiums in exchange for the lower deductible amount.
Comprehensive Insurance Rates
Like collision coverage, comprehensive coverage usually has a deductible of $500, but drivers can opt for a higher deductible to save money on the cost of coverage. The cost of comprehensive insurance is impacted by the area where the insured person lives. Generally speaking, comprehensive is cheaper in rural areas and more expensive in urban areas, but in areas prone to floods, fires, thunderstorms, hurricanes, earthquakes and natural disasters, comprehensive coverage rates are higher. Since comprehensive protection may be expensive, it may be best to drop it on older model cars.
Uninsured Motorist Coverage
Not all states require that drivers carry uninsured motorist insurance. This coverage pays for injuries to the insured person and passengers in the insured car if the at fault party is uninsured or does not have enough insurance to pay for the damages. UM insurance also pays for damages to the insured car with a $100 deductible. Many car insurance quotes include UM coverage unless the driver specifically refuses it. UM coverage has cheap rates and is worth the investment of a few dollars.
Medical Payments and Personal Injury Protection
Some states require that driver’s carry personal Injury protection (PIP) coverage. PIP and medical payments coverage pay medical bills that are incurred by the insured person and passengers in the insured car for injuries received in an auto accident. The premiums for medical payments coverage are low, but the cost of PIP coverage varies widely in the nine states which currently offer or require it. If the coverage is optional and drivers have other medical insurance, they can get cheaper car insurance by not buying this coverage.
Rental Car and Roadside Assistance Coverage
Rental car reimbursement coverage is very limited in scope and generally only covers payment for a rental car if the insured car is disabled or under repair due to an accident. The coverage reimburses the insured person for part of the cost of the rental vehicle. Roadside assistance covers towing and labor (not parts) for roadside repairs, but is unnecessary if the insured person belongs to an auto club. Drivers can get the cheapest car insurance rates if they do not buy optional coverage they do not need.
What Coverage Should Drivers Buy
All drivers must carry the minimum required car insurance for their state, and drivers with newer vehicles and those who owe money on their cars should also have collision and comprehensive insurance. Drivers who own a home or have financial assets should carry liability limits of at least $100,000 per person and $300,000 per accident for bodily injury liability and $50,000 for property damage. Uninsured motorist coverage offers affordable coverage and is a good investment to protect drivers and their passengers.
How To Lower Car Insurance Rates
If possible, drivers should consider raising their collision and comprehensive deductibles to $1000, which saves money on premiums. Most drivers do not need roadside assistance (use AAA instead) or rental reimbursement coverage and they could save an additional $50 or $60 a year. It is important to carry enough liability insurance to protect personal assets, but drivers should not pay for more coverage than they need. Sites like MyCarInsurance123.com can help consumers find ways to lower their rates and compare quotes to find better deals on protection.
Most insurers offer a variety of discounts including good driver discounts, multi-car discounts and bundling discounts. Taking a defensive driving course every three years can save drivers 10% off car insurance rates. Some insurance companies offer other incentives like free roadside assistance coverage or pet accident insurance in addition to other discounts. Paying for a policy for 6 or 12 months instead of monthly saves on finance charges and reduces premium payments even further.
Car Insurance Quotes Online
Although comparison shopping for car insurance was once time consuming and tedious, the internet makes it quick and simple. Most car insurance companies have websites that provide free auto insurance quotes, but some sites provide instant quotes online from multiple insurance companies which can help drivers compare car insurance rates from different companies in just a few minutes. A side-by-side car insurance comparison is the only way policyholders will be able to evaluate whether they are getting the best auto coverage for the cheapest rates.