Insurance Blog

With hard economic times sweeping the country, it is getting harder and harder to pay the bills. Car insurance can be particularly expensive, especially when driving record, age, and other factors are upping your bill. Luckily, there is an easy way around this.

First you need to understand that each insurance company uses its own set of criteria when determining your individual car insurance rate. They also use different weights for certain factors. Let me demonstrate with this theoretical example: Insurance Company A places high value in driving record, but little value in credit rating. Insurance Company B cares a lot about your age and credit rating, but not as much about driving record. This means that if you have been in several accidents (or have been ticketed with multiple moving violations), Company A is going to stick you with a much higher bill than Company B. On the other hand, if you are a saint on the highway, but you just had a property foreclosure, you are going to end up being much better off with Company A. The reasons behind these pricing differences is each company has its own team of analysts that devise their cost formulas, and the analysts do not always follow the same economic theories from company to company. This means that shopping around between different insurance companies can quickly show large price differences.

Next you need to know how local and national economic fluctuations allow you to get further benefits on your car insurance. For example, let us say your city has been hit particularly hard by economic troubles: a factory in the area was just shut closed. This is going to mean that car insurance rates for local insurance firms are going to be lowered since they are mostly only providing service to local residents. These local residents now have less financial means, so the rates are lowered to keep business flowing. Compare this to the national car insurance average of $800 per year and you will most likely notice a serious price discrepancy. You can use this to your advantage because nationwide car insurance companies such as Geico and Allstate will have rates much closer to the national average. This means that a simple comparison between the rates of local and national car insurance companies can yield significant differences in price.

With these two factors in mind, you can now make educated decisions on your car insurance. But how do you compare all these prices quickly so that you can find these pricing differences? That is the easiest thing of all: Online insurance quotes. Virtually every insurance company in the country provides free and instant insurance quotes on their websites. This makes comparing the prices of each company in an Excel spreadsheet extremely easy. So do yourself a favor, take 20 minutes and save hundreds of dollars this year.