Comparing Auto Insurance by Zip Code

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When you are buying auto insurance, you will learn that the quotes that you receive are personalized. Because auto insurance is one of the most personalized products that you will buy as a consumer, it is important to price shop so that you can find the best priced plan from a reputable insurer.

As you begin your exploration to find the lowest premiums, you will discover that some companies are much more competitive than others. The goal is to build a policy that provides you with a lot of protection and very little gaps of coverage for an affordable price.

Price is the focus of so many when they are buying auto insurance.

While it is important to find a product that you can afford to carry for 6 months or a year, it is also important to find a company that pays claims and a policy that offers you the right level of protection.

This is why you need to consider more than just the monetary figures on a quote when you are comparing auto insurance sold by companies who do business in your zip code.

The best price shoppers are those who cover all of the bases before you select a cheap plan that includes bare minimum limits.

They will research the companies in the marketplace first, the coverage options and how they work, and then use price to make a final decision.

Read this guide to comparing auto insurance, and find out how to find the best auto insurance plan in your zip code. Simply use the FREE tool above to get started!

Why Comparing Car Insurance Quotes By Zip Code is So Important

You see car insurance companies advertise the low-cost insurance products on commercials, billboards, Internet banners, email blasts and several other mediums.

While some of these companies undoubtedly do offer lower rates than others, whether or not you will save with the insurer depends on your own personal factors, your household members, and the type of car you want to insure.

This is why the ads always say you “may” be able to save up to X% on car insurance.

The only real way to determine how much that company will charge you for coverage is to request a quote from the company if they service your zip code.

Rising Costs in the Auto Insurance Marketplace

The need for price comparison tools is on the rise because the cost of auto insurance is on the rise. In fact, according to the Consumer Reports National Research Center, premiums are up 4%  since 2013 and are taking up more of the average household’s budget. Overall inflation and rising costs are not the only reasons why premiums are so high.

In addition to this, companies are using credit-based scoring systems to rate policyholders. With credit scores at a low, this raises the cost of insurance in zip codes where credit-based scoring is allowed.

The only way to take charge and to save on auto premiums is to use the power of the competitive marketplace to your advantage and to do annual rate checks. Checking the rates available through other insurers will help consumers research industry pricing to see if other carriers can beat the rates they pay currently.

Each Carrier Prices Their Policies Differently Based on Different Risk Factors

You have to actually learn about how the insurance industry operates before you truly understand how price shopping by zip code gives you the bargaining power.

The price of auto insurance may not be negotiable, but the fact that you are free to do business with any company that you qualify for coverage through is something to take advantage of.

Insurance is a product that is legally required and that also protects your assets.

Whenever you are buying something you have no option but to purchase, you need to do your due diligence so that you pay the lowest percentage of of your income on insurance expenses.

Insurance companies that are licensed to do business in your zip code must comply with the processes set by the Department of Insurance. One of the requirements is that the insurer only charges rates that are filed with the department.

The department will ask for a detailed rating filing report that shows why certain drivers pay higher premiums for coverage with the company. As long as the insurer is approved, they can charge the rates that will target some drivers and not others.

It is common in the industry for a company to be priced low in one segment and high in another. For example, some leading insurance writers have competitive pricing for middle-aged drivers with clean records.

These same insurers charge twice as much as their competition for coverage for a college-aged driver with a violation.

You need to compare the quotes from insurers in your area so that you can see, solely based on the price quotes you were given, which company wants to do business with you and which company is targeting another audience.

The Risk Factors That Will Affect the Price of Coverage

Risk factors in car insurance are those that either raise or lower the likelihood that a person will file a claim. Obviously, when policyholders file claims with their insurer it costs the insurer money.

It is up to the company’s employees who work in the actuarial department to review claims data and other accident statistics to see which risk factors can affect anyone’s chances of getting into a crash that will lead to lost revenues.

While the rates from state to state and carrier to carrier do differ, most companies use the same generic list of risk factors when assessing a policyholder and drivers. Here are the factors that are commonly going to have an effect on your quotes:

  • Driving record
  • Age, gender, and driving experience
  • Geographic territory and zip code
  • Prior insurance coverage
  • Vehicle usage and annual mileage
  • Make, model and body style of the vehicle
  • Credit score
  • Occupation

What do you need to compare auto insurance premiums in your zip code?

Now that you understand why comparison shopping is so important, you may be wondering what steps you need to take to do a thorough comparison.

This first step will be to research the companies that you want quotes from.

Next, you need to gather the documentation and the information that you will be asked for to ensure your quote is accurate.

Then, you need to find out what channels you can get quotes from so that you can price shop on your own schedule.

How to Narrow Down Your Options and Select a Reputable Carrier

Only insurance companies that are licensed by your Department of Insurance should be considered.

If you happened to buy insurance from a company that is not licensed, there is nothing that the regulating agency can do for you if you have a dispute that you want to file.

Also, buying insurance from an unlicensed insurer may not satisfy the state insurance requirements.

You can check the licensed status of carriers through the National Association of Insurance Commissioners database.

The database will not only tell you licensing status, but also the financial standing of the company. When you are trusting an entity to dish out hundreds of thousands of dollars on your behalf when you are involved in a serious crash, you need to know that they are able to take on the financial burden.

The only way to do this is to review financial records and see if the company has the money to pay claims and to stay in business. You can review grades and ratings on your own by visiting A.M. Best or Moody’s official website, or you can see the ratings on the insurer’s profile with the NAIC.

The last thing to consider is customer satisfaction. There are two sources that you can use to do this type of research. Check for ratings through JD Power and Associates to see how the company is graded.

Then, check the complaint index to see if there are official state complaints filed. If you see anything you are not pleased about, cross the insurer off of your list.

What You Need to Get a Quote

If you provide inaccurate information when you are requesting a quote, the quote can change after the application is underwritten.

This is why it is imperative to be prepared. You will need:

  • Vehicle VIN
  • Driver license, age, gender, full name
  • Vehicle features
  • Annual mileage and commuter estimations
  • Driving record and dates of violations or accidents
  • Bank information

Once you have all of the right information, you can start to compare quotes by zip code. The most effective and convenient way to do this is to use an online rate comparison tool that directs you to multiple quotes through all of the leading insurers who operate in your area.

By using the FREE tool below, you can compare apples to apples policies and make an educated consumer choice.

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