Auto insurance rates from different and competing companies can vary greatly. If you are comparing rates between competing car insurance companies it is important to include the many discount companies in your search. Shopping around for car insurance is probably no one’s idea of a good time, and if it is, perhaps that person might consider getting out of the house a bit more often.
But one of the things that makes it so tedious is that you often have to call many different auto insurance companies and give them the same information over and over again just to get quotes on their rates. And what’s really surprising about this is that while many quotes are very close to one another, some are different by even hundreds of dollars every six months or every year, and this is for the same car and the same driver.
Are all affordable car insurance companies so unique that they can justify such a large price variance, and what determines the quality of one provider over another? Is the lowest price always the one you should lock in?
One thing to remember about auto insurance companies is that they usually have a larger company underwrite the policy, meaning that it’s not really the company you’re dealing with that is providing the insurance and taking the risk. A larger company purchases your policy for a certain amount of money which makes the car insurance companies something like middlemen. They get paid to find customers like you and process the policies, handle claims, and so on. But it’s really a larger company that is providing the coverage.
This helps to understand one of the differences between auto insurance companies. Anyone that sells something that is manufactured by someone else usually has a lot of leeway in the prices they charge. Two people selling products from a wholesale company may be way off in prices because the one company wants a larger profit margin than the other.
This often happens with car insurance companies. One may have more costs than another; they might be a bigger company so they have more personnel to support, whereas another larger company can charge less because they have more business.
An important factor to consider in the difference between affordable auto insurance companies is the type of coverage you are receiving and the associated deductibles. When you obtain a quote from one company and they assume you are interested in a low deductible you end up with an inflated quote. On the other hand, another company may assume you want a high deductible and gives you a much smaller quote than the first company.
As such, you must let your agent know what coverage amount and what deductible you want so you can do a correct comparison between companies. If you don not do an apple to apple comparison you will discover two contrasting prices from two different companies. Therefore, in reality, you are merely obtaining a quote on two completely different packages.
Lastly, it is important to shop for free quotes from affordable car insurance companies. It may take some extra time to find the insurance that fits your needs, but it will be worth the time spent in the end.