Is it Possible to Get Car Insurance Under $100 a Month?

With the rising costs of gas, many drivers are looking to trim the costs of their motoring. One area where you may be able to make savings is your car insurance. But is it possible to get car insurance for under $100 a month? Here we’ll explore this topic in more detail.

How Car Insurance Works

Car insurance provides the financial reassurance that if you’re involved in an accident or suffer from a covered incident, such as theft or vandalism, your policy will cover the repair bills or replacement costs.

However, each insurer has its own set of criteria to determine rates. They will look at various factors to determine how risky a customer you are and the likelihood that you will make a claim during the lifetime of your policy.

This is why some drivers can get really cheap car insurance while others have to pay skyrocketing premiums. If you’re deemed low-risk, the insurer is more confident that you won’t make a claim and therefore rewards you with a lower-cost policy. However, if there are factors that deem you a high risk, the insurer will charge high premiums or refuse coverage altogether.

While there are car insurance companies that cover high-risk drivers, it will often be cheaper to reduce your risk.

What Are The Minimum Liabilities?

Each state has minimum auto insurance requirements for drivers, which can vary a great deal between states. It is your responsibility as a driver to understand the minimum requirements in your home state. You are likely to need a minimum amount of liability insurance that will cover third-party injuries or damage.

For example, in California, you need to have at least $15,000 in bodily injury liability per person, $30,000 in bodily injury liability per accident, and $5,000 in property damage liability per accident.

In Kansas, the requirements are more extensive. These include $25k bodily injury liability per person, $50k bodily injury liability per accident, $25k property damage liability, underinsured motorist coverage, personal injury protection, and survivors’ benefits.

Is Cheaper Car Insurance Worth It?

This depends greatly on whether you’ve had to make serious compromises to bring down the cost of your car insurance. If the only way you could get cheap car insurance was to opt for a massive deductible and reduce your coverage to the bare minimum, you are not likely to think it is worth it if you need to make a claim.

However, if you can make a couple of tweaks to your policy and bring down the cost, it can be very worthwhile. There are plenty of ways to reduce your expenses.

While cost is an important factor, it should be your only consideration. You need to make sure that you have adequate coverage to ensure that you are protected in the event of a claim.  This is why the state minimums tend to be woefully inadequate.

If you only purchase minimum coverage, you will not receive any money to cover your vehicle repair bills. Since these can run into thousands of dollars, it is not worth compromising just to pay a little less on your premiums.

Average Rates Of Car Insurance:

At the time of writing this article, in May 2022, the average cost of car insurance was $1,530 per year, or a monthly rate of $136. Of course, this is a national average, and there are some states that are far cheaper for car insurance and others where it is more costly.

These average rates also reflect full coverage, which includes liability, collision, comprehensive, and any additional insurance that the state may require.

However, as we’ll discuss below, there are a number of factors that will influence the cost of your car insurance.

Factors That Affect Differences In Car Insurance Premiums:

While every insurer has its own criteria and algorithm to determine rates, there are some common factors that affect differences in premiums. These include:

Your Driving History:

Your driving history tells an insurer a great deal about your risk. If you have a clean driving record, you’re considered a safer driver compared to someone with speeding tickets, accidents, and moving violations.

Most insurers look back three to five years. So, if you’ve had a claim or a ticket in the last five years, your premiums will be more than someone with a similar profile who has a clean record.

Credit Score

Your auto insurance rate is reduced by a higher credit score, often significantly, with practically every business and in most states. However, getting a quote has no impact on your credit.

Your credit score plays a significant role in deciding the cost of your auto insurance and the cost of auto loans. A stronger credit score frequently results in a lower rate, whereas a bad credit score increases the cost of your insurance. The range of credit scores is 300 to 850. They frequently have numerous layers.

According to a national review of leading insurers, having bad credit might more than quadruple your insurance costs. As opposed to average credit, very good credit may result in premium reductions of up to 24%.

Your credit score shouldn’t be impacted when you request a vehicle insurance quote because auto insurers only do a “soft pull” credit check.

A soft pull merely confirms a few pieces of fundamental data but doesn’t affect your credit score. A hard pull reveals your entire credit history but temporarily decreases your credit score. A buildup of hard pulls can reduce your score if you apply to numerous lenders quickly.

Vehicle Make and Model:

There are several reasons why the make and model of your vehicle affect insurance rates. Every vehicle has crash statistics, and if your vehicle has a historically higher rate of claims and collisions, you can expect to pay a higher premium. This is why a modest compact tends to cost less to insure compared to a sporty vehicle.

Another factor is the cost of repairs. If your arospeed vehicle has more expensive parts, the repair bills after an accident or claim are likely to be higher than average. Insurers compensate for this by charging you a higher insurance rate.

Finally, the make and model of your vehicle will let the insurer know if there are safety features built-in as standard. If a vehicle is equipped with safety features, it could lessen the likelihood of being involved in an accident.

However, this can be a double-edged sword, as some sophisticated features can be costly to repair or may trigger greater vehicle damage to protect the passenger compartment in the event of a collision. This means that claim costs could be more, and so could your premiums.

Deductibles:

Most insurers allow you to adjust the amount of deductible you’re willing to pay if there is a claim. If you are prepared to opt for a higher deductible, it shows the insurer that you have a bigger stake in the game. You will demonstrate more financial responsibility and a vested interest in the coverage. This is rewarded with lower premiums.

Your Coverage Level

Bare minimum insurance coverage is typically cheaper than full coverage, but you also need to think about protecting your finances. If you’re involved in an accident and only have liability, you’ll be left to foot the bill for your own vehicle repairs.

However, if your vehicle is older and you don’t have finance on it, there may be some coverage options that you don’t need. Dropping these coverages could immediately reduce your insurance costs.