Why is it so hard to find cheap auto insurance? (2024)
It’s hard to find cheap auto insurance since new cars cost about $20,000 and are expensive to replace. Additionally, hospital bills after an accident can run about $1,000. Learn how to find cheap auto insurance rates and what affects your costs.
Free Car Insurance Comparison
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
Daniel Walker
Licensed Auto Insurance Agent
Daniel Walker graduated with a BS in Administrative Management in 2005 and has run his family’s insurance agency, FCI Agency, for over 15 years (BBB A+). He is licensed as an insurance agent to write property and casualty insurance, including home, life, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. To ensure our content is accura...
Licensed Auto Insurance Agent
UPDATED: Oct 13, 2023
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
UPDATED: Oct 13, 2023
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
On This Page
Auto insurance can be one of the more annoying elements of modern life. It is required by law in most states; as a result, it often feels like another bill that you’d rather not pay.
Insurance companies make tons of money, and you’re left out to dry. Why is inexpensive, affordable auto insurance so hard to find?
Our glimpse at the costs and motivations of auto insurance companies answers the question of why it’s so expensive. An analysis of the average insurance price-checking process answers the question of why finding inexpensive insurance is so difficult.
Keep reading to learn more about the complicated world of auto insurance. Being informed is the best way to ensure you are getting the best rate!
Why look for auto insurance at all?
Most states require you to hold some form of auto insurance policy for your car in the event of an accident, theft or another disaster that befalls your vehicle. In general, you are not buying insurance for your car; you are buying it for everyone else’s car.
This is why most state governments mandate that you pay insurance companies a hefty portion each year.
Car insurance is mandatory across the United States for three reasons:
- A car is a big-ticket item that tends to cost a lot to repair or replace
- Cars are very dangerous and can cause significant property damage or personal injury to drivers and innocent bystanders
- Nearly everyone owns a car and uses it on a daily basis
Automobile accidents are among the leading causes of death and disability in the United States, and auto insurance laws lessen the strain on society.
Without auto insurance, states’ income tax revenues would suffer, because car crashes would remove people from the labor pool.
Fewer revenues mean fewer state-provided services such as education, police, road maintenance and more. While it may feel like you are being asked to pay for something you’ll never need, it is actually for a better cause.
Free Auto Insurance Comparison
Enter your ZIP code below to view companies that have cheap auto insurance rates.
Secured with SHA-256 Encryption
Why is it so Expensive?
It is easy to lay the blame for expensive auto insurance on greedy corporate executives who only want to steal your money, but the truth is that cars often cause a significant amount of damage. A new car typically costs around $20,000; used cars typically value around $10,000.
Hospital bills are often around $1,000 per passenger, but could be significantly greater, while vehicle repairs may range from $500 to $2,000, per vehicle.
Compensation for an insurance agent to work on your vehicle typically runs a few hundred dollars per person involved, and if you live in a tort state, there are court costs to consider as well.
If someone gets into an accident that effectively totals his or her car, that person may be on the hook for around $30,000, all told. Consider that the average auto insurance premium is about $1000-$1500 per year, this means that if you get into an accident once every 20-30 years, your insurance will pay for itself.
Car issues are expensive, and auto insurance is expensive because it is the only thing that can help to mitigate those expenses.
Of course, not all insurance is expensive. Recent advances in insurance analysis indicate that there are certain types of high-risk individuals that tend to get in more crashes than others.
Auto Insurance Costs
By staggering their costs according to statistically-significant probabilities, insurance companies can offer low-risk drivers inexpensive insurance policies and offset the cost by charging the higher-risk drivers more money for the same service.
Each insurance company calculates risk differently and finding inexpensive auto insurance often amounts to finding the insurance company that sees you as the lowest risk possible.
You can do this efficiently by using our easy comparison tool to choose the best insurance policy for you. Low costs indicate that a company sees you as a low-risk driver who will likely never have to make an insurance claim.
This still technically means that you’re paying for nothing, but at least you’re paying less for a state-mandated nothing than you might otherwise have to do.
Inexpensive Auto Insurance
If you don’t end up comparing insurance the easy way, it will be very hard for you to find an inexpensive insurance company. This is because insurance companies don’t all have the same prices for everyone.
March Madness is right around the corner!!! Who's ready?🏀Do you want to score your area's cheapest car insurance rates?🚗 Compare multiple car insurance rates for FREE here: 👉 https://t.co/27f1xf131D. && Learn more about comparing rates here: 👉https://t.co/qkEcB6FPV0. pic.twitter.com/VDLl555p8w
— AutoInsurance.org (@AutoInsurance) March 2, 2023
The average insurance website is a mess of sales pitches, caveats, and forms. If you can find the forms that you need to fill out, you may spend about 15-30 minutes providing all your information.
This includes your address, demographic info (age, gender, etc.), car make and model, workplace, average time spent driving, car title, driving record, and more.
If you call an agent on the phone, it may take even longer, as the agent will be trying to get your sale with every breath.
Free Auto Insurance Comparison
Enter your ZIP code below to view companies that have cheap auto insurance rates.
Secured with SHA-256 Encryption
Comparing Auto Insurance and Savings
Once you fill in your information, you will have to further navigate all the options you might want on your policy. Some websites let you mix and match after you’ve provided your information, but some force you to go through all that for each policy you choose.
This means that any given company may take several hours to understand its pricing structure. If you’re trying to compare prices, you may have to spend several hours on all the insurance sites you’re interested in, amounting to an entire weekend sitting at the computer or on the phone with an agent.
Insurance companies closely guard their algorithms for determining your auto insurance costs. Because this may ultimately save you money, it’s best not to complain too much.
Instead, you need to answer the question: How do I easily find inexpensive auto insurance?
It’s simple! Just use our FREE insurance comparison tool! Take a few minutes to enter your information once, and we will submit that information to all the insurance sites in your area for every type of policy you’d like to look at.
Frequently Asked Questions
Why is it challenging to find cheap auto insurance?
Finding cheap auto insurance can be difficult due to various factors that influence insurance premiums. Some reasons include:
- Risk assessment: Insurance companies assess risk based on factors such as driving record, age, location, vehicle type, and claims history. If you are considered high-risk, such as having a poor driving record or living in an area with a high rate of accidents or theft, it can be more challenging to find affordable coverage.
- Coverage requirements: Each state or jurisdiction has specific minimum coverage requirements. Meeting these requirements while seeking additional coverage options can increase the cost.
- Personal factors: Individual characteristics, such as age, gender, marital status, and credit history, can impact insurance rates. Factors like being a young driver, male, single, or having a lower credit score may result in higher premiums.
- Cost of claims: Insurance companies consider the potential cost of claims when setting premiums. Rising healthcare and auto repair costs, along with increased legal fees, can contribute to higher insurance rates overall.
- Competitive market: Auto insurance is a competitive industry, and rates can vary among different insurance companies. While some may offer lower premiums, they may have different coverage options or customer service quality.
- Coverage needs: The level of coverage and types of optional coverages you choose can affect the cost of your insurance. Adding comprehensive, collision, or additional coverage options can increase premiums.
Can I take any actions to find cheaper auto insurance?
Yes, there are several actions you can take to potentially find cheaper auto insurance:
- Shop around: Obtain quotes from multiple insurance companies to compare rates and coverage options. Each company evaluates risk differently and may offer different discounts or incentives. 2. Review your coverage: Assess your coverage needs and consider adjusting your coverage limits or deductibles. However, ensure that you maintain adequate coverage to protect yourself financially.
- Bundle policies: Consider bundling your auto insurance with other policies, such as homeowners or renters insurance, with the same company. Many insurers offer discounts for multi-policy customers.
- Improve your driving record: Avoid accidents, traffic violations, and claims, as a clean driving record can lead to lower premiums over time.
- Take advantage of discounts: Inquire about available discounts, such as safe driver discounts, good student discounts, or discounts for safety features in your vehicle.
- Consider usage-based insurance: Some insurers offer usage-based insurance programs that assess premiums based on your actual driving habits. If you are a safe driver who drives less, this may result in lower rates.
Is cheap auto insurance always the best option?
While finding affordable auto insurance is important, it’s crucial to consider the overall value and coverage provided. Cheaper insurance may have lower coverage limits, higher deductibles, or exclusions that could leave you underinsured in case of an accident. Balancing cost with the coverage and protection you need is key. It’s advisable to assess your personal circumstances and insurance requirements and choose a policy that offers adequate coverage at a reasonable price.
Can I negotiate with insurance companies for lower rates?
Insurance companies typically determine rates based on actuarial calculations and risk assessments, so negotiation for lower rates may not always be possible. However, you can discuss available discounts and review your coverage options with insurers to find ways to reduce your premiums. Some insurers may be open to adjusting rates or providing additional discounts based on your circumstances.
Free Auto Insurance Comparison
Enter your ZIP code below to view companies that have cheap auto insurance rates.
Secured with SHA-256 Encryption
Daniel Walker
Licensed Auto Insurance Agent
Daniel Walker graduated with a BS in Administrative Management in 2005 and has run his family’s insurance agency, FCI Agency, for over 15 years (BBB A+). He is licensed as an insurance agent to write property and casualty insurance, including home, life, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. To ensure our content is accura...
Licensed Auto Insurance Agent
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.