When shopping for car insurance, it’s tempting to accept the first quote you receive. However, experts advise against this approach, as it could result in paying significantly more than necessary. According to data from CarInsurance.com, annual premiums for drivers with good credit can vary by over $1,100 depending on the insurer, ranging from $1,381 to $2,509.
Howard Goldberg, vice president of the customer solutions center at Plymouth Rock Assurance, emphasizes the importance of obtaining multiple quotes: “You want more than one opinion [to be sure] that you’re getting the right insurance.” This advice is particularly relevant given the potential for substantial savings.
Many consumers overlook crucial details when reviewing initial quotes, such as fees and exclusions. These factors can lead to unexpected costs when the final policy price is determined. Common fees that may not be immediately apparent include installment payment fees, credit card payment fees, and broker fees. Some policies may also charge for unnecessary riders like accidental death coverage.
While not everyone can afford to pay for a full year of coverage upfront, it’s worth considering fee-free payment options when selecting a new insurance provider. Similarly, consumers should avoid paying broker fees when fee-free alternatives are available online or in person. It’s also crucial to ensure you’re not paying for coverage you don’t need.
Policy exclusions are another important consideration. These are situations in which the insurer won’t pay claims, such as for unnamed or unlicensed drivers, use of personal vehicles for business purposes, custom vehicle parts, or travel outside the United States. If any of these scenarios apply to you, it’s essential to confirm that your policy provides appropriate coverage.
The first quote you receive can serve as a useful benchmark for evaluating other offers. Stothard Deal, TransUnion’s vice president of strategic planning for insurance, suggests starting with your current insurance costs as a reference point. If the initial quote differs significantly from your current rate, it’s a clear indication that shopping around could be beneficial.
When comparing quotes, consider several factors beyond just the premium. These include coverage limits for liability, comprehensive, and collision coverage; deductibles, which affect out-of-pocket expenses when filing a claim; and available discounts, which can vary widely between insurers.
To ensure accurate comparisons, provide the same driver and vehicle information to each company. Verify that coverage limits match across quotes and compare available discounts.
For those seeking a quick estimate, online calculators can provide a rough idea of expected costs based on age range and state of residence. More detailed quotes can be obtained through car insurance comparison websites or directly from insurers. Alternatively, working with an independent insurance agent can simplify the process, though it’s important to inquire about potential broker fees.
Even after securing coverage, it’s advisable to periodically seek new quotes. An annual review is recommended, but you should also consider shopping for car insurance when your circumstances change, such as moving to a new location or purchasing a new vehicle.
By taking the time to compare multiple quotes and carefully reviewing policy details, consumers can potentially save hundreds or even thousands of dollars on their car insurance premiums. Remember that the first quote isn’t always the best, and a little extra effort in shopping around can lead to significant financial benefits in the long run.