What Is Car Insurance?
What is car insurance? We’ll explain all the types of coverage to help you understand how car insurance works so you can find the protection you need.
Ways to Explore Car Insurance Savings
by COUNTRY Financial
Gas prices, tight budgets and rising inflation continue to affect household expenses. According to a recent COUNTRY Financial survey¹, 9 out of 10 people express concerns about achieving financial goals due to current economic conditions. With expenses running high, many people are looking for ways to reduce car insurance costs.
Car insurance is a regular expense, but if you're exploring ways to approach car insurance costs, these tips may help you consider potential options.
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1. Follow the speed limit
Speeding tickets and other traffic violations are among the most common reasons insurance rates may increase. Violations are recorded on your driver's record with the state, which is reported to insurance companies. Multiple traffic offenses may indicate higher risk, which can affect your insurance rates.
Some insurance companies offer programs that measure your driving habits in real-time and may offer discounts for safe driving. These programs use data from
your smartphone or a device that connects to your car to monitor driving behaviors. Safer driving habits may result in lower car insurance rates.
COUNTRY Financial offers this type of program, the COUNTRY Financial® DriverIQ program. Enrollment may qualify you for a car insurance discount, which could vary based on your driving habits and state of residence. Ask your representative about availability and discount amounts in your state.
2. Be aware of how credit scores may affect your rate
Your credit score may influence your car insurance rates in most states. Maintaining good credit standing by paying bills on time and regularly reviewing your credit history for accuracy may help. You can access your credit report for free at annualcreditreport.com.
Some states restrict or prohibit the use of credit scores in insurance pricing. Check with your insurance representative to understand how credit may factor into your rates in your location.
3. Consider insurance costs when buying a vehicle
Luxury vehicles, sports cars and newer models are typically more expensive to purchase and repair, which can result in higher insurance premiums. However, newer vehicles with advanced safety features like sensors and collision avoidance systems may qualify for safety discounts, potentially helping offset insurance costs.
When you're car shopping, consider calling your insurance representative to get rate estimates for the specific make and model you're considering. Auto insurance is one component of vehicle ownership costs, and factoring it into your decision early may help you make a more informed choice.
If you're evaluating whether a specific vehicle fits your budget, our vehicle affordability calculator can help you explore the total cost of ownership.
4. Look for car insurance discounts
Many companies offer car insurance discounts, and in some cases, you can qualify for more than one discount for greater savings. For example, when you insure multiple cars or bundle your home and car insurance, you could get a discount. Taking a defensive driving class, keeping a good driving record, being a good student or having a certain career may qualify you for additional discounts. Check with your insurance agent to explore which discounts may apply to your situation.
Explore your car insurance options
Whether you're looking for auto insurance or need to review your existing insurance coverage, contact your local COUNTRY Financial representative for a quote or to review your coverages or auto insurance discounts.
FAQs
The amount you may save on car insurance varies significantly based on your individual situation, including your driving record, location, vehicle type and which discounts you qualify for. Some drivers may save 10-15% through a single discount, while others who qualify for multiple discounts might see savings of 25% or more. Your insurance representative can provide a personalized quote showing potential savings based on your specific circumstances.
Your driving record is typically one of the most significant factors affecting your car insurance rate. Accidents and traffic violations can substantially increase premiums. Other major factors include your location, age, vehicle type, coverage amounts, deductible levels, and in most states, your credit score. The relative importance of these factors can vary by insurance company.
Maintaining a clean driving record may help you qualify for safe driver discounts and can prevent rate increases that typically follow accidents or violations. Some insurance companies may offer accident forgiveness programs or adjust rates over time for drivers who remain claim-free, though this varies by carrier and state.
However, rates can still change due to other factors like inflation, changes in local claims trends or updates to your coverage.
Some insurance companies may offer a discount for paying your premium in full on a semi-annual basis rather than in monthly installments. Discount availability and amounts vary by company and state. However, payment options and associated discounts vary by company. Check with your insurance representative about available payment plans and any discounts that may apply.
Raising your deductible typically results in lower premiums, as you're agreeing to pay more out-of-pocket if you have a claim. This strategy may make sense if you have savings set aside to cover a higher deductible and want to reduce your regular premium costs. However, consider whether you could comfortably afford the higher deductible if you needed to file a claim. Your insurance representative can show you how different deductible amounts would affect your premium.
Older vehicles may have lower comprehensive and collision insurance costs because their actual cash value is lower. However, you might not need these coverage types on an older car with minimal value. Liability coverage costs depend more on the vehicle's repair and replacement costs for others than on your vehicle's age. Additionally, older cars without modern safety features might not qualify for safety discounts that newer vehicles receive.
If your vehicle has depreciated significantly and you have savings to replace it if needed, some drivers choose to explore whether dropping comprehensive and collision coverage may affect their premium. This decision depends on your individual financial situation. A common guideline is to evaluate this when your vehicle's value is low enough that annual premiums for these coverages approach 10% of the car's value. However, if you have a loan or lease, your lender typically requires this coverage. Discuss this decision with your insurance representative based on your vehicle's value and your financial situation.
Published 3-9-21
Updated 5-28-26
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Get a car insurance quote
Start a quote or call us at 866-COUNTRY (866-268-6879). Find out more about car insurance.
Your insurance agent is there to help
Contact your rep or call us at 866-COUNTRY (866-268-6879). Find out more about car insurance.
1The COUNTRY Financial Security Index® survey of 1,031 U.S. adults, fielded by market researcher Ipsos.
Discounts and availability vary by state.
Auto insurance policies issued by COUNTRY Mutual Insurance Company®, COUNTRY Preferred Insurance Company® and COUNTRY Casualty Insurance Company®, Bloomington, IL.
COUNTRY Financial® is a family of affiliated companies (collectively, COUNTRY) located in Bloomington, IL. Learn more about who we are.
We take pride in providing accurate, truthful information in our articles. See our editorial standards to learn more.