How to get the lowest auto insurance cost
Before you start thinking about switching insurers to find the lowest auto insurance rate, check with your current insurer about any discounts for which you might be eligible. For instance, some insurance companies now offer pay-as-you-drive insurance.
This insurance requires that you plug a device into the vehicle that records actual miles traveled. The information is transmitted to the insurer so it can offer discounts. You could get your insurance discounted by as much as 10 percent or more.
Even if you drive several thousand miles per year, you can save if you have a second car. You could put the second vehicle on a pay-as-you-drive program so you're not overpaying for coverage.
However, you may encounter some costs in your quest for the lowest auto insurance rate. You may have to pay for the device that you plug into your car. Also, if the program requires you to have OnStar, you must be a subscriber. That will set you back a couple hundred dollars per year.
Understand auto insurance terminology
One of the ways you can save money on auto insurance and get the lowest auto insurance rate is to drop certain types of coverage. But make sure you understand what you're really dropping before you do it. You don't want to end up in a financial crisis just because you were seeking the lowest auto insurance rate.
Here are a few types of coverage you should be very careful about dropping.
Gap insurance: This type of coverage is offered to people with leases or who owe more on their car than it's worth. This coverage pays the difference between what you owe and the actual value of your car if it gets stolen or destroyed.
Emergency road service: This coverage pays to have your car towed if it breaks down.
Underinsured driver: This covers injuries you sustain caused by a driver without enough insurance to cover your medical expenses.