Auto insurance and comparison shopping

If there's one recommendation you will hear from all insurance experts regarding auto insurance cost optimization it's certainly the suggestion to shop around. Comparison shopping is granted a good way to save money when buying something. However, when it comes to any type of insurance, the importance of effective comparison shopping becomes more pronounced due to a set of factors that makes the insurance industry a bit different from other types of services and products your money can buy. So let's take a look at these peculiarities and learn to benefit from them by shopping around effectively.

The most important thing you should know about insurance companies is that they all use unique rate calculation methods. They may base their calculations on the same set of factors, which allow them to evaluate the risk associated with insuring every driver. Nevertheless, it's the way they process this information that makes a difference, and that's where each company tends to use different formulas for their calculations. Moreover, each company has different pools of customers, which automatically gives certain groups of drivers better rates as compared to other insurers that may specialize in serving other groups of vehicle owners. All this results in constant fluctuations when you compare quotes for identical policies from different companies – there's always a difference, even minor, and you will have a hard time finding two policies from different providers that are priced identically.

With these peculiarities in mind it becomes clear why comparison shopping is so important when it comes to buying auto insurance. By comparing quotes from different insurers you raise your chance of finding a policy that carries all the coverage you need for a price that is lower than the rest of the competition. Of course, there will be an average point, around which all the quotes will be distributed. However, the difference can get to hundreds of dollars, and that's exactly why comparison shopping is considered as the most effective tool for auto insurance cost optimization. Why buying a policy for one price when you can get the same policy from a different insurer much cheaper? That's the whole idea behind quote comparison, and that's why so many experienced customers do it when looking for a new policy. However, you have to remember some simple rules when starting your quote comparison in order to get the best results and do it efficiently.

First of all, make sure to do it online. Not that quoting through your agent or by calling the insurer will give you different rates. The Internet makes it much easier and faster to get a lot of quotes instead of spending hours on the phone or talking to your agent. Always make sure that the company you're quoting with actually works in your state, otherwise there's no sense getting a quote for a policy that you won't be capable to purchase. And keep in mind that it only makes sense to compare identical policies with the same coverage options and amounts included, since each company has a different price for $1,000 of coverage included, and you won't be able to accurately pick a policy that has the best ratio.