Compare the premiums

Jan 7, 2005
Contributor: peter pippen

Survey after survey confirms that auto-insurance companies often charge greatly different premiums for the same coverage. In New York, Pennsylvania and elsewhere, premiums have been shown to vary sometimes by more than 100%. A shopping trip by the Arizona Department of Insurance in 1996 found six-month premiums for a 48-year-old Phoenix man driving a late-model car ranged from about $500 at one to company to more than $1,500 at another company, with others scattered somewhere in between.

Rates may not vary as wildly in your area, but the odds are you will discover substantial differences if you take the time to get premium quotes from a number of companies. Begin with a market leader, such as State Farm or Allstate. Then use that quote as a measure against which to judge identical coverage at other companies.

Many state insurance offices distribute auto-insurance pricing guides, but the categories they use may not match yours. Your best bet is to use such a guide to identify your state's most cost-effective insurers. Then get price quotes from a handful and you'll have a truly comparative guide.



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