2 Free Online Tools That Can Help You Save Money on Car Insurance
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Everyone wants to live a comfortable financial life. And while earning a decent income can certainly reduce your stress, smart money management habits can have an equally important influence over your financial health.
If you’re looking for ways to improve your budget, you can start by trying to reduce monthly expenses. A lower auto insurance premium, for example, could free up cash that you can use toward other financial goals.
Of course, finding a lower car insurance premium will involve a bit of research on your part. The Insurance Information Institute suggests that you compare a minimum of three quotes from different insurance companies before you choose a policy. Below is a look at two online resources you can use to make your search a lot easier.
SmartFinancial
SmartFinancial is an online tool that can help you shop for several different types of insurance coverage, including home, life, health and auto. You can think of it like a search engine designed to help you compare insurance rates.
When you visit the SmartFinancial website, you can look up the average monthly car insurance rate in your state. You can also easily compare personalized insurance quotes within minutes by completing a simple, three-step process.
Provide your personal details. To start, you’ll need to answer some questions about your identity (name, address, email, phone number, date of birth, gender, marital status, etc.). More questions about your vehicle (year, make and model), homeownership status, history of auto accidents and DUIs and whether you’re currently insured or uninsured will follow.
Search for rates. SmartFinancial will use the details you provide to search through its database of more than 200 insurance companies. Based on your information, the service will even check to see if you might qualify for discounts.
Compare offers. You’ll get the chance to compare and review any insurance coverage offers the service finds for you. If you find a policy that you like, you can contact the insurance provider (online, via phone or in person) to sign up for coverage.
SmartFinancial’s service is free and available to consumers in all 50 states plus Washington, D.C. The company itself doesn’t offer insurance coverage. Instead, it earns a commission when people like you use the service and SmartFinancial sends leads to its referral partners. Whether you opt to purchase a policy through one of the website’s referral partners or not, it’s a great way to compare your options.
Esurance
Esurance, an Allstate company, was one of the first online insurance providers in the U.S. Initially established in 1999, the company now offers auto insurance to customers in 43 different states. (Coverage in Alaska, Delaware, Hawaii, Montana, New Hampshire, Vermont and Wyoming is current unavailable.)
If you’re looking for more than just auto insurance coverage or you’re hoping to take advantage of a multi-policy discount, Esurance has additional options as well. You can request a quote online for renters, homeowners and motorcycle insurance coverage.
According to the company, it takes an average of just six minutes to receive your quote online. Drivers who switched to Esurance between September of 2018 and 2019 reportedly saved an average of $462 per year.
Aside from the savings potential, other perks Esurance customers can take advantage of include:
Easy-to-use digital tools and website
Simple, fast photo claims process when you have an accident
Roadside assistance (towing and labor coverage)
Rental car coverage available
Keep in mind that Esurance is an individual insurance provider, not a comparison website. So, you’ll still need to compare Esurance with quotes from other companies to see if it’s the ideal choice for your auto insurance needs.
Another Key to Lower Insurance Premiums — Good Credit Scores
Another potential way to save some cash on your auto insurance premium is to work on improving your credit. It may sound unbelievable, but in some cases your credit score could affect your auto insurance premium more than your driving record.
Many insurance providers use credit-based insurance scores to help predict risk and set the price of your premiums. This special type of credit score isn’t the same FICO or VantageScore a credit card issuer or lender uses when you apply for financing. Those credit scores predict the risk that you’ll pay a credit obligation 90 or more days late within the next 24 months. Credit-based insurance scores, on the other hand, predict how likely you are to file a claim that will cost a provider more than you paid in premiums.
How to Improve Your Credit-Based Insurance Scores
Like standard credit scores, credit-based insurance scores are based on information found on your credit report from either Equifax, TransUnion or Experian. So, if you’re looking for actionable ways to try to give your credit-based insurance scores a boost, the following actions might help.
Review your credit reports for mistakes.
A Federal Trade Commission study found that one in four consumers found errors on their credit reports that might impact their credit scores. When you monitor all three of your credit reports you put yourself in a position to find and dispute credit mistakes quickly if they happen to you, potentially helping your credit scores in the process.
Lower your credit card balances.
When you use credit cards the right way, those accounts may have a chance to boost your credit scores. However, a high balance-to-limit ratio on your credit cards (otherwise known as your credit utilization ratio) isn’t good for you. Paying down your credit card balance and lowering your credit utilization might help you to move those important numbers back in the right direction.
Don’t pay late.
Over one-third of your FICO Score — 35% to be exact — is based on your payment history. Paying credit obligations on time is a must if you want to earn good credit scores. Late payments that are 30-days or more beyond the due date or worse can damage your credit scores and may stay on your reports for up to seven years.
It is worth pointing out that some states don’t allow insurance providers to use credit-based insurance scores in the pricing of policies. That means there’s no guarantee that a higher credit-based insurance score will lead to a lower insurance premium. Even so, you can never go wrong by taking steps to better your credit.
Bottom Line
If you’re looking for ways to save money, shopping around for the most affordable insurance coverage available can be a smart use of your time. Auto insurance, after all, isn’t an expense most people can cut from their budgets. But you can and should take the time each year to make sure you’re getting the best coverage at the best price available.
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While we work hard on our research, we do not always provide a complete listing of all available offers from credit-card companies and banks. And because offers can change, we cannot guarantee that our information will always be up to date, so we encourage you to verify all the terms and conditions of any financial product before you apply.
