Comparing Auto Insurance Rates

Auto insurance rates can vary wildly between car insurance companies but one thing is clear and common – they are rising. In the wake of the recession, more people are keeping older vehicles, whereas previously they would have traded in for newer cars, and, frankly, older cars cost less to insure. In addition, the number of policyholders, who opt to have only liability insurance (no comprehensive coverage, no collision coverage), has risen by almost 15 percent.
Auto insurance companies are receiving less revenue.

As car insurance companies are required by law to maintain a certain balance, auto insurance rates have had to increase to make up the difference. While most increases are minimal, a late 2010 survey by Consumer Reports indicates that 14 percent of policyholders would save money by switching auto insurance companies.

Car insurance companies know this as well, so they find little ways to lower the cost of your auto insurance – allowing you to basically set your own price for auto insurance. Many encourage you to drop your comprehensive coverage (could save you up to 40 percent) or raise your deductible (you save about 10 percent off your premium when you raise your deductible by $250), whereas many other “discount” auto insurance companies are offering lower rates in general. This is where the need to compare auto insurance rates comes into play – not all car insurance is created equal. Following is a brief list of auto insurance components that discount auto insurance companies pare down (and many traditional companies will also), and why you may want to reconsider:

PERSONAL INJURY PROTECTION: Personal injury protection (PIP) is the insurance you carry to cover you and your passengers (e.g. your kids, their soccer team) in the event of an accident.

COLLISION COVERAGE: Collision coverage is the coverage that pays for repairs to your vehicle in the event of an accident. COMPREHENSIVE

COVERAGE: Comprehensive coverage is a popular coverage to drop, but that doesn’t mean you should. This coverage protects you if your vehicle is damaged because of weather (e.g. flood, hail, wind, lightning), vandalized, or stolen.