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How to Compare Car Insurance Rates Effectively

Published: September 2012

You would never think to buy a car without doing a little cost comparison of car insurance rates to see how much money you could save. So why would you ever sign up for an auto insurance plan without doing the same? If you're not sure how to compare car insurance rates, we've got a few helpful tips that may just save you some money.

Child driving toy SUV.

Step One: Get at least three quotes.

Today's car insurance market is incredibly competitive, which means that insurance providers will often go the extra mile to get your business. If you're smart about shopping around, you could make the competition work to your advantage. Your first step should be to get at least three quotes from reputable auto insurance providers. Once you've done that, look at each one line by line to make sure you're comparing apples to apples. A side-by-side comparison will help you to determine which one will give you the best coverage for your buck.

Step Two: Look at the limit of liability coverage.

Liability insurance often pays for the car repair and medical bills of another driver if you're involved in an accident and found to be at fault. All states have minimum insurance requirements, but the minimum coverage might not be good enough in the event of a worst-case scenario. Since not all insurance quotes come with matching limits of coverage, compare all three to determine what the limit of liability coverage is for each. You may find that the cheapest car insurance quote in front of you also has the lowest limit of liability insurance, which in reality may not be high enough to cover accident-related damages.

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Step Three: Look at the deductibles

Collision/comprehensive insurance pays for damages to your vehicle. Most policies typically will pay to repair or replace a vehicle up to its actual cash value. But, what may differ between policies is the deductible, or the amount of money you must pay out of pocket in the event of a claim before the insurance policy kicks in and pays for damages. A policy with a higher deductible will often have lower premium rates, but if you must make a claim, you will have to pay more out of pocket than if your deductible was lower. When you are comparing car insurance rates, you should make sure that the policies you are looking at have the same deductible in order to make an accurate comparison.

Step Four: Don't forget about uninsured motorists.

The Insurance Research Council reports that one in seven drivers on the road is uninsured. Without uninsured motorist coverage, which covers you if you're involved in an accident with someone without insurance, you could end up without any way to cover the damages you've suffered as a result. Uninsured motorist insurance doesn't come standard with all insurance policies, but it's worth consideration. Make sure that the policies you're comparing all have matching limits of uninsured motorist coverage.

Step Five: Find out if you're eligible for discounts.

If you're a safe driver or a good student, or if your car has certain safety features, you may be able to get an auto insurance discount. Make sure to find out about any discounts you may be able to receive, and take the discounts into account when comparing auto insurance rates.

By comparing insurance quotes line by line, you'll see that not all policies are the same. It's easy to arrive at the assumption that the cheapest policy is the best policy, but that's not always the case. Sometimes the lowest cost of the batch is also the one that offers the lowest limits of coverage—which doesn't necessarily equate to "better." Do your research to make sure that you get the best value on great coverage.

Start with a car insurance quote from Allstate.com.

Coverage subject to terms, conditions and availability. Policy issuance is subject to qualifications. Allstate Property and Casualty Insurance Company, Allstate Fire and Casualty Insurance Company, Allstate Indemnity Company, Allstate New Jersey Property and Casualty Insurance Company.  © 2015 Allstate Insurance Company, Northbrook, IL.

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