How Much Does Car Insurance Cost

How Much Does Car Insurance Cost

How much does car insurance cost? You’ve come to this web page because you most likely entered a search concerning how much it costs for car insurance. You might be looking for an immediate online quote. This site doesn’t do that. If you look to the upper right hand side of this page you’ll see an agent close to you.

He or she can help you.

One of the first things an agent will do is go through a list of questions to place your risk in a category. I think you will be surprised at how much information is needed for an accurate quote. This is because that agent is held accountable by the company to provide accurate information. The agent also knows that you don’t want to be surprised six weeks into the policy when the company increases the policy’s premium due to information they uncover.

The online quote machine, without the help of a local, authentic person, is a sales tool to get you to commit. The agent wants your trust and long-term relationship. It is in their best interest, and ultimately yours, for them to have the facts.

Here is a quick look at some of the things actually needed to generate a quote. If the list is any shorter they won’t have the information needed for an accurate quote and the price will most likely go up until it is profitable for the company:

  • Year/Make/Model of all Cars including Serial Numbers (So They can Check Car’s Make and Model)
  • Your Age and the Age of All Drivers in Household
  • Driving History of All Drivers in Household
  • Address
  • Your Social Security Number (Credit information is the single largest factor for determining premium. Without an accurate Social Security number the chances of obtaining a right information is greatly diminished.

Car insurance premium is complicated because we’re all so dissimilar. Quoting machines don’t do “complicated.”

All Drivers and All Cars Are Unique

I grew up in North Dakota. It wasn’t uncommon to see a $100,000 tractor sitting next to a $50,000 farm dwelling. The farmer knew that he needed a first-class tractor to make a living, while a home would do nothing but depreciate on the prairie. His car would probably also reflect that practical approach to live and be worth a small percentage of the value of the tractor.

I was recently on the East coast and was struck by the expensive cars parked in front of modest homes.

During that same trip I spent some time at American Modern Insurance Company, in Cincinnati. They specialize in insuring classic autos. These cars range from High Valued Sports Cars to fully restored Model T’s. They are as varied as the mind can imagine.

The only thing more unique than cars are the people who drive them. The next time you’re in a public place look around at the people. Now . . . just for a moment imagine that you’re working for a company that pays you about $75,000 a year to make a good decision as to which one of those people is probably going to have an accident. Your livelihood depends on you being right the majority of the time.

That is what an insurance company underwriter does. They look at a group of unique cars and people and try to separate them into similar groups. Actuaries call those groups “homogeneous”. They look for traits that will identify who will be a good risk and who will be someone to avoid.

The outliers are easy. See that fellow over there climbing into a bright red Corvette with the license plate “LUV2SPD”. You might want to avoid him. Then there’s the elderly couple who obviously drive less than 10,000 miles a year on their way to and from the grocery store. They probably would be a great risk that has few accidents, if any.

The strange thing is the man with the Corvette might be Joe Citizen who hasn’t gone three miles over the speed limit in the last ten years. And the elderly couple, they might not drive enough to keep their skills intact and could be lethal on the interstate when forced to drive in high-speed traffic.

Most insurance underwriting isn’t done by actual people anymore. Insurance companies have what they call black boxes. The black boxes are computers. The computers take minimal information about you that you enter on your keyboard, pull a credit report, a report that identifies what cars you own and who lives in your house, another report that tells it what losses and accidents you’ve had over the last many years and mixes that with the insurance companies’ logarithms to determine a proper rate.

All you have to do is tell the insurance company what coverage you want and in seven and one half minute you’re on your way with a quote.

What could possibly go wrong with that?

First of all any one of those reports could be for John Smith and you’re Jon Smith. The report might be for Jon Smith on Orchid Lane and you’re Jon Smith on Orchard Lane. It happens all the time.

Add the fact that you really don’t have a clue what coverage you want or need and you might have just wasted seven and a half minutes that you could have better spent watching the first segment of “American Pickers”.

Worse, you buy a policy that doesn’t meet your needs and the first time you find out is after you have an accident.

Or, you simply believe all the hype on TV and purchase a policy online because you think it just has to be the cheapest.

The better way is to find someone you can trust, someone who is an authentic person you can reach out to for answers and hold responsible when you need help to straighten out all the things that could go wrong inside a black box.

How much does car insurance cost?

How much can the wrong insurance cost? Or, how much can you overpay when a computer connects you to an erroneous report?

An independent agent will provide quotes for you in multiple companies. If one of their companies makes a mistake that adversely impacts you, the consequences to you will be negligible.

Other Enhanced Insurance articles related to Insurance Premiums:

Gender Based Insurance Premiums

Usage Based Insurance (e.g. Progressive’s Snapshot)

Car Insurance Estimators

Cheaper Is Not Always Better

The DWI Conundrum

Are Traffic Cameras Making Safer Streets

Are Insurance Companies Out to Get Me

Can My Child Support Affect My Driver’s License

Does the Color of Your Car Affect Your Insurance Rate?

Enhanced Insurance is not written by attorneys. If you’re looking for legal advice, you need to contact a lawyer. Further, insurance practices and forms change constantly and are varied from state to state. For definitive answers in your area, contact a local agent.

While the majority of people want an agent involved in their purchase of insurance, many people want to see if they can save money by buying direct from the insurance company. Others want to try a direct quote to make sure the premium they’re now paying through their local agent is fair. If you want a quote for your coverage, click on the competitive quote button on the right side of this page.

Other articles that might interest you:


Newly Purchased Home Discount

Newly Renovated Home Discount

Storm Shutter Home Discounts

Hail Resistant Roof Discount

Smoke Free Home Discount

Green Home Discount

Homeowner’s Association Home Discount

Gated Community Home Discount

How Do I Qualify for a Teacher Auto Discount

Top Ten Most Beautiful Dog Breeds and Why We Need Pet Insurance

Pet Insurance for Miniature Cats

Is It Possible to Sweat Out a Cold

PPO vs. HMO Health Insurance

Jim operates an insurance agent network called Insurance Partners, aggregating agents in the Midwest for over 25 years. He was National Agent of the Year for Metropolitan in 1993 and Midwest Agent of the Year for Travelers in 2011. He served as a founding board member of the Surplus Lines Association of Minnesota.

Leave a Comment

Your email address will not be published. Required fields are marked *