Automobile insurance companies in most states set premiums based on the amount of claims paid in each area. Auto insurance rates in the same area may vary as much as 100% from company to company. According to an independent study, fewer than one in four drivers will get more than one quote before buying auto insurance, a major financial error. When your policy is up for renewal, get several quotes. Shop around. You will be amazed at the differences in prices.
Automobile insurance rates are not fixed by state law, as most people falsely assume, except in two states, Texas and Massachusetts. Ironically, Massachusetts has about the highest auto insurance rates in the country. So much for government control. In these two states you will save big money by carefully choosing your coverages instead of choosing a company because it has lower rates.
Twenty-two states require approval of the state insurance commission before maximum rates can be raised for each coverage, but you’ll find big differences in rates in these states just as you do in the balance of the states that require no maximum-rate approval of any kind.
Some of the companies that seem to have lower rates in many areas are Geico, USAA, State Farm, Travelers, and Liberty Mutual. Many agents, to make shopping more difficult, will not quote over the phone, but don’t let that stop you. Let your wheels do the walking.