Cheap Car Insurance

Almost everybody has viewed the television advertisements where the little lizard promises to save you money if you buy their cheap car insurance. Yet, is it true that you will save money or is it a further promotional attempt put on by a silver-tongued Madison Avenue 'suit'

When the concept of free insurance quotes became popular online a couple years ago, the insurance industry began offering free online price quotes, Not long after, literally hundreds of insurance companies have jumped on the bandwagon to promote their own cheap car insurance. The insurance companies achieve this by showing their rates compared to their competitors and urge you to purchase their brand of cheap car insurance.

However, is it possible for every car insurance company to actually be the cheapest. Yet, at least one company has to be more costly, otherwise, all prices would be the same. So, how does the cheap car insurance phenomena actually work?

The insurance companies employ a great deal of statistical data to determine a cheap car insurance premium to charge a specific customer, and each individual insurance company has different criteria for each class of driver. The insurance companies are aware certain drivers are more likely to file a claim than others and simply by writing more policies to lower-risk drivers, they are then capable of offering less costly insurance to high-risk drivers. Therefore, the ability to offer cheap car insurance to one class will differ from company to company.

For instance, Company X underwrites 65% of their policies for low risk middle-aged drivers. Since the number of claims filed by this particular demographic class is extremely low, they are better financially suited to underwrite more high-risk (males 18-25) policies and offer a lower rate to this high-risk class. The insurance company will solicit drivers in that high risk demographic to secure their business as a new customer. Though the overall discount might be less than 15%, the consumer is glad to get a cheap car insurance rate from a respectable company and the company is glad to have a new customer.

An insurance provider normally will not reveal the demographic or statistical data that they use to target a particular class of driver, that is why it is necessary to shop around for the best cheap car insurance quote. Visiting the website of several insurance companies will eventually produce a suitable and affordable quote. The caveman or lizard may not save you as much as your good neighbor, so be sure you are in good hands by comparing several online companies to get a cheap car insurance quote.