A Good Deal on Auto Insurance: How to Find the Best Affordable Coverage

It isn’t easy to find a good deal on auto insurance, especially if you live in a high-cost state, such as New York, New Jersey or California.  It takes time and research.  In some states, a few hundred companies offer auto policies, and in others, only a few dozen, so not necessarily a lot to choose from. And even if you find a company with great rates, there is no guarantee you will qualify for those rates or that the rates will stay low after the initial policy period. Your best bet is to shop around, and do so often.  The cheapest deal might be with a company you’ve never heard of.  And there is no shame in changing auto insurance companies every now and then.  Believe me, they are not loyal to you, so you don’t need to be loyal to them.  Most don’t offer any discounts for longevity with the company.

What’s the best way to find a good deal?

•    The WorldWideWeb

The Internet is a great place to start your search.  You can get direct quotes from some insurers on the Internet, such as Progressive and Geico Direct, and from Internet insurance brokers and services, like Insweb and Esurance.  There are many more in each category, so use a good browser, like Google or Yahoo and go to town. These insurance providers have little overhead, so they can pass the savings on to you.

•    800 Numbers
Many insurance companies sell their policies over an 800 number. This is especially helpful if you don’t always have access to the Internet.  Some of those are Geico Direct, Amica, Ameriprise, USAA and 21st Century.  There is no commission paid to any agents, so they save about 15% right there, and can pass that on to the consumer.  Again, little overhead, so more savings for you. 

Note that many of these insurers are very picky.  If you aren't a better-than-average insurance risk, you may be better off taking your business elsewhere. And keep in mind that USAA offers policies only to U.S. military families.

•    Allstate and State Farm
These two companies command, respectively, 18% and 12% of the auto insurance market. Like the 800-number insurers, they have their own in-house, or "captive," sales forces, but they operate out of local offices and offer insurance to a broad range of drivers, from the safest to some of the riskiest.  For a "good risk" driver, the 800 carriers will usually be cheaper. But if your record is reasonable, you're still likely to get a pretty good deal with one of these big guys.

•    Independent Agent
If you've had two or three accidents or three or more speeding tickets over the past three years, your best bet is to get a quote from Allstate or State Farm or one of the other big companies you’ve heard of, and then ask an independent agent to try to beat it.  They can probably do a bit better with one of the insurance companies you may not have heard of.  Most agents regularly work with six or seven insurers and sometimes can persuade one of them into beating the quote. You can find the telephone numbers of independent agents in your local yellow pages under Insurance Agencies or online. 

Many companies sell their insurance primarily through independent agents.  They range from giants such as The Hartford and Travelers to tiny companies with which you may be unfamiliar. These insurers pay substantial commissions to the independent agents. But an independent agent can be a wealth of information on deals in your market, and if you have a troubled record, an agent can sometimes be the best way to find coverage at a reasonable rate.

•    Captive Agent

Captive agents are those who work primarily for one insurance company only.  This is not the best way to go if you are looking for the lowest rates, because there is no comparison-shopping done on your behalf.  You are pretty much stuck with the rates the company gives you via their agent.  You can still save a little money this way by purchasing more than one policy from them and asking about various other discounts they offer.  But you won’t find the best deal you can get from a captive agent.

To get a good deal on auto insurance, you have to be willing to put in a little effort over the phone, on the Internet, in person, or all three.  If you invest some of your time by doing your homework, you will likely be rewarded, possibly substantially.

Lori Mandell is an attorney, writer and editor. Her specialty areas include insurance, personal injury and estate matters.

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