Shopping online is fast, easy, and convenient. You can start your application, save it, and finish later. And you’ll get a free car insurance quote back immediately. Consumer advocates say the number one reason people overpay for auto insurance is that they don’t shop around, but online you can get multiple free car insurance quotes from one application. So there is less of driving around insurance companies and more clicks of a button to get you the information you seek.
Drawbacks
None thus far. It’s convenient and inexpensive. However, if you’re already carrying several other policies (like homeowners or RV insurance) with another provider, you may qualify for a discount on their auto insurance that would offset the savings of buying online.
Calculating the auto insurance quote
So just how is an auto insurance rate online calculated? In general terms most companies will try and spread costs as fairly as they can – this is down by a series of grouping. People are grouped based on related risk characteristics and these are determined using records and statistics to gauge for example the frequency and cost of auto accidents.
The processes involved in figuring out the rates for auto insurance may vary from one company to another but the factors to be considered before issuing the policy to you will be the same. There will be little shifting or manipulation to help you gain a cheaper rate, but it helps to know what eventually will affect your insurance premium:
Age: Statistics show that drivers less than 25 years of age figure most in the accidents that take place. Those who are between 50 and 65 years old have their share of experiences and statistically have fewer accidents. This group is therefore offered discounts on auto insurance rates
From 65 years of age and older the rates start rising again. As expected this is due to factors such as deteriorating vision and delayed reaction time. People in this age group are advised to remain with their current policy since it gets difficult to find an insurer to take them on.
Gender: Blame it on the genes. Statistics again prove that men figure more in accidents than women, and in cases of fatal accidents men are three times more likely to be involved in one. From this it can be deduced that the auto insurance rate online for young men will be higher than that for young women.
Marital status: Statistics come to the rescue again to prove that as a group, married men and women have fewer accidents than the singles. So for once being married might just save you some money.
Driving record: This can either lower your premium or burn a hole in your pocket. Usually an “at-fault” accident or a conviction will be held against you for up to three years. Obviously an accident where you were primarily responsible will mean a lot more than a simple traffic violation such as speeding. Companies are very strict when it comes to those charged of driving under the influence of alcohol, and drugs and often they are turned away.
For those who have been convicted and are struggling to take out a policy there is an option they can turn to – “assigned risk pools” otherwise known as “state-regulated insurance plans.” If you fall in this category you cannot choose a company. Instead the state will assign the “risk” to an insurer. The coverage, however, might be sufficiently less than that required for complete liability protection.
Companies are also very wary of those who have not owned a car in 3 years, as this indirectly implies that you have not been driving for a similar period. This could sufficiently hike your online auto insurance rate.
Type of car: It is not just the drivers but also the vehicles that they drive which are grouped. Statistics show that cars of a certain make are bound to feature in more accidents, are more expensive when it comes to repair and maintenance, and are more targeted for theft. Therefore be conservative when selecting a car and choose wisely as falling short in these areas can maybe double collision and comprehensive insurance.
Other factors
Mileage figures a lot as a factor. A higher mileage suggests you use your car often, which increases the risk an accident. Different states will have different rates, and in relation to this people who live in small towns are less likely to experience a serious collision than someone who lives in the city (costs for vehicle repair, medical care and legal services will also cheaper in a small town.). Added to that Credit ratings can also be factored in. A good credit rating could reduce your premiums.