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3 Keys to Comparing Car Insurance Rates

Updated: March 2016

Whether you just bought a new car or you're simply doing an annual review of your finances, comparing car insurance rates can be a good way to assess whether you're getting the most for your money.

To start, the Insurance Information Institute (III) suggests getting at least three quotes from auto insurance providers. Each quote you get should be for the same set of coverages, limits and deductibles, so you can truly compare them side by side.

Not sure where to begin? Here's some more information on setting up an auto insurance comparison.

Video Transcript

(Voiceover): How to Compare Auto Insurance Quotes How to Compare Auto Insurance Quotes

Not sure where to begin with your car insurance quote comparison?

As you get several quotes, you'll want to make sure each quote has the same set of coverages, limits and deductibles.

Auto liability coverage, which may help pay for car repair and medical bills of another person if you cause an accident, is required in most states.

Additional coverage may be required, depending on your situation and your state's laws. For example, uninsured motorist coverage is mandatory in some states. And, if you're financing a vehicle, you may need comprehensive and collision coverage.

Make sure you select the same set of required and optional coverages for each quote you get.

A limit is the maximum amount a policy will pay for a covered loss. Most states have minimum liability coverage limits that drivers must purchase. You may also have the option to increase your liability limits.

Either way, make sure the limits you set for bodily injury liability coverage and property damage liability coverage are the same for every quote you compare.

A deductible is the amount you'll pay out of pocket toward a covered claim.

Increasing your deductible may lower your car insurance premiums, but you'll typically pay more out of pocket in the event of a claim.

To make an accurate comparison of car insurance rates, the deductibles you choose should be the same for each quote you get.

These tips may help you better understand what each policy provides so you can choose the one that's best for you!

1. Select appropriate liability limits.

Auto liability coverage is required in most states. Liability coverage may help pay for car repair and medical bills of another driver if you cause an accident.

Most states set minimum liability coverage limits that drivers must purchase. You may have the option of increasing your auto liability limits — and the III suggests that's a good idea. If you cause an accident and the damage exceeds your state's minimum liability coverage limits, you could end up paying out of pocket for additional expenses.

Whether you select the state minimums or increase your coverage, make sure the limits you set for bodily injury liability coverage and property damage liability coverage are the same for every quote you compare. Bodily injury liability coverage helps cover expenses of another person's physical injury if you are found liable in an accident. Property damage liability coverage helps pay for damages you may cause to another person's property.

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2. Set similar deductibles.

Some car insurance coverages, such as collision coverage and comprehensive coverage, typically come with a deductible that you may be able to adjust. A deductible is the amount you'll pay out of pocket toward a covered claim. Increasing your deductible may lower your car insurance premiums, says the III. However, a higher deductible means you'll pay more out of pocket before your insurance coverage kicks in after a covered loss.

When you are comparing car insurance rates, the deductibles you choose should be the same for each quote so you can make an accurate comparison.

3. Choose the same coverages.

While liability coverage is required in most states, other coverage requirements vary from state to state. Some coverages may even be optional. You may want to familiarize yourself with your state's specific car insurance requirements. To accurately compare car insurances rates, make sure you've selected the same set of required and optional coverages for each quote you get.

Required:

  • Liability coverage: May help pay for another person's property damage or medical bills if you cause an accident. Read more >

Required in some states:

  • Uninsured and underinsured motorist coverage: May help protect you against damages caused by a driver without insurance or not enough insurance. Read more >
  • Medical payments coverage: May help pay for medical expenses if you or your passengers are injured in a car accident. Read more >
  • Personal injury protection (not available in all states): May help pay for hospital bills, lost income and even child-care services if you're injured in a car accident. Read more >

Typically optional:

  • Comprehensive coverage: May help pay for damage to your car not caused by a collision. Coverage may include theft, vandalism or damaged caused by animals. If you're leasing or paying off your car, your lender may require you to have comprehensive coverage. Read more >
  • Collision coverage: May help pay to repair your car if it's been damaged or destroyed in a collision with another vehicle or object such as a fence. If you're leasing or paying off your car, your lender may require you to have collision coverage. Read more >
  • Rental reimbursement coverage: May help pay for a rental car while your car is being repaired after a covered loss. Read more >
  • Towing and labor cost coverage: May help cover services if your car breaks down. Coverage may include jump starts, fixing flat tires or towing. Read more >

If you need help understanding your car insurance quote or deciding on which coverages best suit your needs, talk to a local agent.


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