Purchasing auto insurance is mandatory in all states in USA. Although different states have different minimum requirements, all drivers must possess an insurance policy along the lines of requirements. This means that there is a huge market for insurance policies and naturally, there are hundreds of insurance companies offering various insurance policies depending upon the requirements of the state.
While shopping for insurance policies, the first step is to obtain quotes from at least three insurance companies. Quotes from different insurance companies are different and are based on the following points:
- Insurance quotes vary greatly by the state. Comparisons can only be made with insurance companies in the same state.
- Insurance quotes vary by the model of the car. Insurance companies have a list of cars that are considered low-risk, and they offer cheaper insurance for low risk cars. Sports cars, high speed cars and cars without the security devices installed are bound to cost more.
- Insurance quotes also depend upon the area of residence. Cities, densely populated areas and high traffic areas cost higher premiums than smaller towns and residential layouts.
- Insurance quotes depend a lot upon the information provided at the time of submitting the request. There are many advantages of applying for insurance policies online. Many attractive discounts for car models, driving records and many such deals are available online.
- Insurance quotes depend upon the driving record of the individual applying. Any records of traffic violations that accounts for more than one point on the drivers license will cost more monthly premiums. Any record of the DUI or accidents due to the fault of individual applying is bound to increase the insurance rates.
There are many ways to effectively minimize insurance quotes. Some of them are mentioned below:
- Almost all insurance companies have special discounts for group insurance policies. If the employees of an organization or members of a community group register together, discounts on the monthly premiums can be obtained.
- Most insurance companies provide big discounts on premium rates if the individual applying has completed a defensive driving lesson, or enrolled for classes.
- Another effective way to reduce monthly premiums is to opt for higher deductibles. Deductible is an amount that the policy holder pays out of pocket at the time of insurance claims. Opting for higher deductible ensures the monthly premiums are low, but the amount must be carefully chosen, such that the deductible can be paid whenever the need arises.
