How can you estimate your car insurance costs before you buy a policy — or even before you buy a car?
The easiest way to estimate or calculate your car insurance costs before you buy a car or policy is to get and compare quotes from several insurers.
To do that successfully, though, you have to know what kinds of auto insurance coverage you need and want. You also have to know how much coverage you want, as well as how high or low you want your deductible to be. Knowing the rate factors that determine your premium can help a lot, too.
Keep reading for advice on how to become a successful car insurance estimator. In this article, we answer important questions like:
- How can I estimate my car insurance costs?
- How much auto insurance do I need?
- What factors impact how much I pay for auto insurance?
- Why do some cars cost more to insure than others?
- How can I lower my auto insurance premium?
How can I calculate my car insurance costs?
To calculate or estimate car insurance costs before you buy a vehicle:
- Decide which kind of car you want.
- Determine which types of car insurance you need.
- Figure out how much of each car insurance coverage type you need and want.
- Get quotes from multiple car insurance companies and compare them.
You need to know which kind of car you want, or at least narrow down your options in that regard, before you estimate how much your auto insurance will cost because vehicle make and model can have a big impact on your premium.
Figuring out how much auto insurance you need — starting with your state’s minimum requirements — is important, too. The types of car insurance and the coverage levels you buy also play a major role in what you pay for a policy.
For example, our research shows that the average driver in the U.S. pays $641 per year for a minimum-coverage car insurance policy, and $1,255 per year for a full-coverage policy that includes collision and comprehensive coverage.
Once you’ve determined the above, use the relevant information to get car insurance quotes from several providers. Then compare the rates they send you to see which one is best for you.
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Do you already have a vehicle and just want to calculate your car insurance costs before you buy a policy? Follow these same steps, leaving out the one about deciding on a make and model.
How much car insurance do I need?
Every state requires drivers to have at least a minimum amount of car insurance or otherwise prove financial responsibility.
In most states, you need to buy a certain amount of bodily injury and property damage liability coverage to meet this requirement. Some, though, require medical payments, personal injury protection, or uninsured motorist or underinsured motorist coverage, too.
You also may need to buy auto insurance if you have a financed vehicle. In this situation, lenders often require comprehensive and collision coverage.
How much car insurance you’re required to carry depends on where you live or where you got your auto loan.
What determines how much I pay for car insurance?
These rate factors determine how much you pay for car insurance, so keep them in mind while estimating the costs of a policy.
- Your age.
- Your gender.
- Your marital status.
- Your ZIP code.
- Your driving record.
- Your vehicle.
- Your claims history.
- Your coverage types and amounts.
- Your deductible.
Insurance companies use these factors to figure out how likely you are to file a claim on your policy. If they think you’re more likely to get tickets or cause accidents, they’ll charge you higher rates for auto insurance coverage. If they think you’re less likely to file a claim for those or other reasons, they’ll charge you lower rates.
Why are some vehicles cheaper to insure than others?
Some cars are cheaper to insure because they cost less to repair or replace than other cars.
The opposite is true, too. Some cars cost more to insure because they’re more expensive to repair or replace.
Insurance providers also consider how likely a vehicle is to cause damage in an accident or to be stolen. Because of this, if the vehicle you own or want to own is likely to damage another car in a crash or is frequently stolen, you’ll probably pay more to insure it than you would if you bought a safer or less desirable vehicle.
All of this explains why car insurance is usually higher for sports cars, luxury cars and classic cars than it is for sedans or more economical cars.
How can I lower my car insurance costs?
If after you get a car insurance policy you find it costs too much, try these tips to lower your premium.
- Get and compare rate quotes from several insurance companies.
- Raise your deductible.
- Drop car insurance coverage you don’t need, such as collision or comprehensive coverage if you drive an older vehicle.
- Bundle multiple insurance policies together with the same company. You may save money if you get your auto and home coverage from one insurer, or auto and life coverage.
- See if you qualify for auto insurance discounts that can save you money, like discounts for good drivers, seniors or teens.
- Avoid filing claims.
- Improve your credit score.
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