#3 of 8 things you should know about auto insurance

#3 of 8 things you should know about auto insurance

Insurance prices vary (a lot) by company.

Car insurance rates differ significantly from one insurance company to another. That’s because each insurance company uses its own formula to assess risk and decide what you pay for coverage. This means no two insurers will have identical prices for the same policy — often, the difference is hundreds of dollars. So, if you don’t compare rates, you can wind up overpaying.

“Auto insurance is a highly competitive business and one of the most effective ways to reduce insurance costs is simply to shop around,” according to Jeanne Salvatore, senior vice president of the Insurance Information Institute. “Drivers should look for an insurance company that will provide a good price along with excellent service.”

The best plan is to decide what coverages and options you need and comparison shop so you can find cheap auto insurance that still provides sufficient coverage.