You seriously underestimate the power of shopping for auto insurance – MotorBiscuit

When shopping for auto insurance, it’s easy to get carried away by all the confusing terms and other jargon that come with it. You should also consider factors such as your age, driving record, and the type of car you plan to insure, then call your insurance company for the quote. However, there is a bit more footwork involved. In fact, a recent study by Money Geek shows that many Americans seriously underestimate the power of shopping for insurance, in addition to other important factors.

What drivers think about auto insurance premiums in relation to the real world

Several factors come into play when it comes to getting an auto insurance quote. Most drivers are familiar with some of the basic factors that insurance companies use to generate premiums, but Money Geek’s survey found that there is some confusion between what drivers think of a premium. auto insurance versus reality.

Money Geek’s survey included 1,068 drivers and found that many respondents “overestimated the impact of the driving record (accidents, DUI, etc.) and underestimated their insurance provider’s effect on costs. “. Here is a table that shows some common misconceptions drivers have about auto insurance pricing compared to the real world:

Consumers focus too much on their driving record and not enough on shopping

A woman talks on the phone in front of a flood damaged car on a street filled with mud and debris the day after the flash floods. | (Joan Cros / NurPhoto via Getty Images)

As we can see, your driving record and your age play a role in your auto insurance premium, but they are not the main factors. The Money’s Geek study found that a 40-year-old man with a DUI paid less for insurance than a 19-year-old with a clean criminal record. This is surprising given that most respondents, and drivers in general, think their driving record carries the most weight when it comes to insurance premiums.

In reality, it comes down to what drivers can control in their premiums versus what they can’t. For example, Mark Fitzpatrick, senior content manager for Money Geek, says where you live will have a major impact on your premium. Plus, where you buy your insurance premium plays an important role when it comes to getting the best rate.

Money Geek bought the same driver settings from nine different insurance companies. The result showed that drivers can save 33% on their auto insurance rates by simply shopping around, while most consumers thought only a 23% saving was possible. In fact, buying auto insurance can be your best friend in finding the lowest rate.

As a personal example, when I was looking for an insurance quote for my 2008 Honda S2000, one company gave me a quote of $ 180 / month, while another offered me $ 70 / month with the same covers. I bet you can tell which one I went with.

Your credit score also plays a role in auto insurance

A car was damaged by flooding on a street filled with mud and derbis the day after the flash floods of September 2, 2021 in Les Cases d'Alcanar, Spain.

A car was damaged by flooding on a street filled with mud and derbis the day after the flash floods of September 2, 2021 in Les Cases d’Alcanar, Spain. | (Joan Cros / NurPhoto via Getty Images)

Another important factor when it comes to buying auto insurance is your credit score. “Credit score is a huge factor (in most states). By downloading these quotes, we know that if your credit score changes, then your auto insurance quote changes a lot. If you are in a poor or below average credit category, then your rates can really go up. Fitzpatrick said. “Just like insurers have proprietary calculations for when someone has an accident and says ‘we’re going to multiply their rates by that much’, they do the same with credit scores.”

So while you may think your age, driving record, and the car you drive are the only factors to consider when purchasing auto insurance, it isn’t. The next time you need to get auto insurance, you may want to check your credit first, and more importantly, look for quotes. You could end up saving a lot of money.

RELATED: Does Auto Insurance Cover Water Damage?

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Justin D. O'Neill

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