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Why Allstate’s Car Insurance Rate is Double the National Average- And How You Can Save

Why Allstate's Car Insurance Rate is Double the National Average- And How You Can Save

 If you’re like many Americans, you might have received your renewal notice from your car insurance company recently and been more than a little surprised at the price tag it carried. 

It’s not uncommon to find yourself paying twice as much as the national average, or even more than that if you live in an urban area or somewhere with high accident rates, which is often how these higher costs get justified. After all, paying extra money now could mean less of a financial burden later on if there’s an accident. But why does Allstate charge so much for its car insurance?

The Biggest Issue With Car Insurance Costs

The number one issue with car insurance rates is that they are too high. According to a study done by the Consumer Federation of America, Americans spend about $150 billion annually on car insurance. This equates to about $700 per insured driver and $2,600 for an average family of four. 

The most expensive states in which to have auto coverage are Connecticut, Maryland, New Jersey, Massachusetts, Rhode Island and California. The cheapest states in which to have auto coverage are Louisiana, Oklahoma, Arkansas and Kentucky.


How can you save on car insurance costs? One way would be by shopping around for different insurers until you find a good deal. Another option would be to increase your deductible so that you could save money upfront if something happens.

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What Determines the Price of Your Auto Insurance?

There are a number of different factors that determine what you’ll pay for car insurance, including your age, what kind of car you drive, where you live and how much driving experience you have. But a lot of it boils down to one thing: your driving record. A clean driving record means a lower auto insurance rate. The good news? There are lots of ways to keep your record squeaky clean. 

If you’ve been in any accidents, or gotten any tickets in the past year, there’s some good news: most companies offer rates based on claims history rather than just at present time. That doesn’t mean accidents will never affect your premium again–if they’re severe enough, they can stay on your record for up to seven years–but if you get into an accident after paying premiums for a few years without any incidents, it will likely be reflected in a decrease in price rather than an increase. 

Most states also allow drivers who have had their license suspended or revoked due to traffic violations to qualify as good drivers if they maintain a certain period of clean driving afterwards.

What Other Factors Affect My Rates?

There are a number of factors that affect your car insurance rates, including how often you drive, your age, where you live, and what type of car you drive. If you have a history of accidents or tickets, then you could see higher rates too. But there are a few steps that will help lower your rates. 

Make sure to shop around for the best rate available by calling different companies and comparing prices. Discounts like bundling your auto and home insurance together can also help lower your rates by as much as 10%. By insuring more than one vehicle with the same company, it can help reduce costs as well.

Understanding Nonstandard Auto Policies

Nonstandard auto policies are offered by many insurance companies and can provide you with additional protection beyond what is included in a standard policy. For example, if you’re leasing your car, most standard policies will not cover loss of use for damage to your vehicle; this coverage may be included in a nonstandard policy. Some common nonstandard auto policies include 

1. A Nonstandard Collision Policy – covers collision costs on a leased or financed vehicle for which comprehensive and/or liability coverage was declined or excluded 

2. An Extra Care Policy – covers damages to an underinsured or uninsured driver’s car when they collide with yours 

3. Customary Comprehensive Coverage – includes limited collision, comprehensive and theft as well as replacement cost benefits 

4. Customary Liability Coverage – provides third party bodily injury, property damage liability, personal injury protection (PIP) medical payments coverage 

5. Uninsured Motorist Protection – pays medical expenses incurred due to an accident caused by someone without liability insurance 

6. Total Loss Replacement Coverage – pays your claim minus the actual cash value of the insured vehicle

More: allstate offers quick and easy car

4 Tips to Reduce Your Premiums Without Settling For Less Coverage

1. Raise your deductible to $1,000 or more: The higher your deductible, the lower your premiums. 

2. Switch to a different company: Shopping around can save you hundreds of dollars a year. 

3. Bundle with home and/or life insurance: This could save you up to 20%. 

4. Add another driver to your policy: Adding just one additional driver can cut rates by 7% on average. 5. Consider a car that has some safety features like airbags and anti-lock brakes: Buying a vehicle with safety features will often mean lower premiums for you! 

6. Choose not to buy an extended warranty from car dealerships: Extended warranties are almost never worth it and can cost as much as 10% of the car’s value!

Tip 1: Get A Nonstandard Auto Policy

When you buy a car, you have the option to buy either standard or nonstandard coverage. If you choose standard coverage, your deductible will be $500. If you choose nonstandard coverage, your deductible will be $1,000. Choosing nonstandard coverage means that if your car gets damaged in an accident and has a repair cost of $2,500, you’ll only have to pay out of pocket for the first $1,000 worth of repairs.

Tip 2: Maintain Good Credit

As it turns out, not only does having a good credit score make you more eligible for loans, but it can also save you money on your car insurance. As of November 2016, the average interest rate for someone with a good credit score was 3.2% whereas someone with bad or no credit scores saw an average of 13.1%. That means that those with bad or no credit scores are paying about 2x as much for their car insurance as those with good credit scores. By maintaining your great credit, you can avoid these steep premiums and keep more money in your pocket!

Tip 3: Own A Home With No Equity

One way to save on your car insurance costs, if you don’t have much equity in your car, is to drive a cheaper used car with no equity that doesn’t require a high liability insurance. Sure, it won’t be glamorous, but it will ensure you’re not paying for features you don’t need and should offer significant savings. 

Another idea to consider is whether your need for a new or expensive car will exceed the cost savings of insuring the vehicle. If so, then it’s probably best to finance the purchase at an interest rate low enough that makes up for some of the premium costs over time.

Tip 4: Eliminate Excess Vehicles From Your Policy

Before adding another vehicle to your policy, take a look at your current coverage. Are there any vehicles that are not being used? If so, consider removing them from your policy and either selling or storing them. 

This way you’ll only be paying for coverage on vehicles that you’re actually driving. For example, if you own two cars but drive one of them most of the time, add that car to your policy. Your insurance provider may offer discounts for just having one car insured under your name!

More: allstate auto insurance review

Tips to Help You Drive Safely and Avoid Accidents

1. Signal your intent before making any lane changes, turns or stops. People might not see you, and it will take them more time to react. 

2. Keep a safe following distance between you and the car in front of you – at least 2 seconds behind slower moving vehicles and 4 seconds behind faster moving vehicles. 

3. Obey traffic signals at all times and always drive on the right side of the road with your headlights on during daylight hours (and when it’s dark). 

4. Learn about how to handle emergency situations like skidding, running out of gas, or getting a flat tire.

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