You wouldn't explain the average cost of buying a Lamborghini to someone who asks you how much he should expect to pay for a Chevy. The same applies to auto insurance. You can spend all day collecting quotes from various insurance companies, either online or directly with an agent, but if you're comparing the equivalent of an Aventador to a Bolt, you're not going to get the accurate answers you're looking for. The key to comparing insurance quotes is making sure that all aspects and provisions of the policies are equal.
Do they have the same deductibles?
If Insurer A tells you it's going to cost $3,000 a year to insure your vehicle, while Insurer B quotes $900, your natural inclination might be to jump at the $900 offer. Before you sign in haste, make sure you're responsible for the same deductible on each policy - the amount that comes out of your pocket for repairs if your car is damaged. If Insurer B expects you to pay $1,500, while you'd only be responsible for $500 with Insurer A, this goes a long way toward explaining the difference in the amount of the premiums because premiums decrease as deductibles rise.
Make sure to compare the same coverage
Check all the types of coverage you'll be paying for. This can be a bit trickier than simply saying, ?Liability coverage, check? to both policies. Liability coverage is broken down into components, like bodily injury and property damage. Your premiums increase as you elect to carry more coverage. If you're paying Insurer A for $50,000 in bodily injury liability, but Insurer B is giving you a quote based on $25,000 worth of coverage, Insurer A's premium will cost more. Make sure the policies you are comparing are identical across the board, and keep in mind that all states except New Hampshire set minimums for the amount of liability coverage you must carry. Allstate offers an interactive map where you can find out what the requirements are where you live.
Do insurers offer the same discounts?
Discounts are like magic wands that reduce your auto insurance premiums if you qualify for them. They're usually available when you insure both your auto and your home with the same company, or if you don't log too many miles on your car each year. Compare the discounts offered by different insurers - not all will cut you a break for the same coverage. You might find that one quoted premium is significantly higher than another because the company isn't crediting you with any discounts, possibly because you never asked.
The hidden cost of payment plans
If you're like a lot of people, you pay your insurance premiums in monthly installments. Check the fine print of each policy you're considering, particularly when comparing monthly premiums rather than the total yearly amount the insurance will cost you. This pay-as-you-go arrangement often comes with a convenience fee. It may only be $10 a month, but this can bump your yearly cost up by $60 if another insurer only charges a $5 fee. It's also possible that Insurer B isn't including the extra $60 to $120 in its annual quote because it's assuming you want to pay your premium in a lump sum, which avoids these fees.
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