Millennials Guide to Picking the Right Car Insurance

Millennials are often faced with the challenge of finding affordable and reliable car insurance that fits their unique needs. With a multitude of factors to consider, such as coverage options, deductibles, and premiums, it's important to have a clear understanding of what to look for when selecting the best insurance plan for your vehicle.

It’s important to compare car insurance rates and ensure you get the right price. Thankfully, there are a few steps that you can take to lower what you’ll pay for car insurance. 

But you don’t need to approach car insurance like your parents — use this guide for millennials to find the right insurance and further your personal finance goals.

Check Rates Every Year

According to Reviews.com, auto insurance rates are more affordable for people in their 30s than for people in their 20s. That’s why it’s important to check your rates every year. 

Your rates can change as you get older, but you may experience a change every year separate from just your age. For example, if you move to an area that requires you to drive fewer miles for work, you could end up paying less for your insurance. 

If you find a rate that works better for you but it’s with a different car insurance company, do not be afraid to leave your current provider. You don’t need to be loyal to your insurance company. You also do not need to stick with the insurance provider that your parents have. Remaining loyal to a single insurance company can leave you paying more than you need to for your auto insurance.

Compare Coverage Policy Options

There are multiple types of car insurance policies. Some insurance policies cover only the bare basics required by law, while others are expansive and provide you with additional coverages at higher prices.

If you’re looking to save money on car insurance, the most effective method to lower what you pay is usually to stick with only the coverages required by your state. Speak with your insurance representative to learn more about the minimum coverage requirements in your area. 

As a general rule, you’ll usually be required to carry bodily injury liability coverage and property damage liability coverage, but coverage minimums will vary by state. Select states may also require you to carry additional types of insurance that cover your own medical bills or lost wages following a car accident.

Compare the Policy to the Value of Your Car

The value of your car, while not the largest factor in determining rates, does still affect what you end up paying for your insurance coverage. In addition, the value of your vehicle is a major influence for which insurance group your car will be put in. 

Insurance companies use insurance groups to estimate how much the company is likely to need to spend if your car is involved in an accident and you need to file a claim. Cars in insurance group 1 would generally be cheaper to insure, while cars in group 50 will generally be more expensive.

Cars that are newer can usually get you better rates for car insurance. This is because newer cars will have more advanced safety features. A major part of what determines your car insurance rates is based on the likelihood of damage to your car during a crash. Newer cars with better safety features are less likely to be damaged in a crash which can lead to lower insurance costs.

The same could go for a car that’s older that you’ve had for a while. If you can afford the cost of vehicle repairs or replacement to any damage to your car, expensive and comprehensive insurance policies like collision coverage or comprehensive may not be worth the additional price tag. 

However, don’t assume you’ll pay less just because your car is older, less expensive or newer. Do your research and shop around.   

When you first start shopping for insurance, you’ll probably go to major names in the insurance industry to get your first quotes. Companies like Geico, Nationwide and Allstate offer comprehensive policy options — but they may also charge more money for insurance when compared to smaller companies that don’t need to support a huge marketing budget. Be sure to get car insurance quotes from local names operating in your area when you look for the right insurance company — the major players aren’t the only options worth considering.

Big names may also have lower quality customer care. Big name insurance companies have tons more customers (and insurance options) but may need to charge more money to each individual policyholder to keep up advertising and the company infrastructure. 

While smaller insurance companies might not be the first thing that comes to mind when you start shopping for insurance, they might provide you with more affordable rates for the exact same coverage. This is why it’s important to get a quote from more than 1 insurance provider before you decide where you want to purchase your auto insurance policy.   

Check Their Ratings

According to a study completed by insurance research group Agent for the Future, 52% of millennials purchased auto insurance in 2019. During this study, researchers also found that 49% of millennials look for an insurance company with a reputation for good service. This makes it particularly important for millennial drivers to read about the auto insurance companies that they’re considering working online using resources like the Better Business Bureau.

While it can be tempting to find the most affordable company and purchase your auto policy from them, it’s not usually a good idea to choose an insurance company solely because they seem to have low prices. There could be a reason their rates are so low. 

While insurers are checking you out, check them out. Look at their customer service ratings and their credit rating. You can easily look up an insurer’s credit rating using a service like AM Best and learn if your insurance policy is as valuable as they say it is.

Ask for Special Discounts

If you’ve spent any time online researching car insurance companies, you’ve probably noticed that insurance companies love to offer discounts. Don’t be afraid to contact an insurance company that you’re interested in working with to ask for special discounts. 

Some of the most common discounts offered by auto insurers include discounts for:

• Students
• Members of the armed forces
• Veterans
• Members of automobile or riding clubs
• Maintaining a great driving record
• Insuring multiple vehicles together on a single policy
• Completing a safe driving course
• Having a security system or anti-theft device installed in your vehicle

If you already own some type of insurance (for example, health insurance, home insurance or life insurance) you may also want to contact your current insurance agent to ask about bundling discounts. 

You can receive a bundling discount when you purchase multiple types of insurance from a single company. Depending on the types of insurance you currently have, you could potentially find a major discount on both of your current policies when you bundle. 

Shopping for car insurance can be stressful — but it doesn’t have to be. Knowing where to start your search for the right insurance is half of the battle. From personal injury protection to collision or comprehensive plans and roadside assistance, there’s an option for every drive.

We recommend beginning your hunt for the best car insurance with a few of our favorite affordable car insurance providers below. 

Things To Remember

As the “digital generation,” millennials are intimately familiar with technology. However, too many drivers end up paying too much for their car insurance because they didn’t take the time to thoroughly compare all of their insurance coverage options online, while also accepting less-than-adequate customer service from an organization that sees every premium as an investment in its bottom line. You can and should do much better, especially if you have teenagers driving or work for a ridesharing company.

Getting a free auto insurance quote no longer requires spending hours on the phone or physically driving to an insurance office to consult with an agent, even if you own a classic car. You can get a quote online in as little as 60 seconds from most major insurance providers. We recommend comparing prices from at least 3 competing insurance companies before you decide where you want to purchase your insurance.

Remember that you are the person paying for your car insurance coverage — so don’t let an insurer tell you that you can’t change policies or companies. You have the power when it comes to your insurance — and with a wealth of new digital resources at your disposal, you no longer need to overpay for your insurance.  

Frequently Asked Questions