WASHINGTON — You’re likely paying too much for auto insurance. according to a consumer group that’s done price comparisons of the D.C. area’s largest auto insurers.
“We found really big differences in price from company to company for each of the hypothetical profiles we looked at,” said Kevin Brasler, executive editor at Checkbook.org. “What we found is that most families here in the Washington area can save hundreds of dollars making a better insurance choice.”
Brasler said a lot of the big companies don’t have competitive rates.
“State Farm and Farmers and Allstate and Nationwide, for the most part here in the Washington area, have pretty high rates compared to companies like GEICO and Erie,” Brasler said. “It does pay to shop around.”
Checkbook recommends people comparison-shop for auto insurance about every two years.
Bundling might not be better
Don’t assume buying homeowners and auto insurance policies with the same company saves money.
“You don’t want to run out and grab that 10 percent bundling discount if you could save 50 percent on your auto insurance,” Brasler said.
But don’t let that discourage you from shopping around. “Go with the place that offers the lowest [bundling] rate. But, you do need to keep in mind that some of the lowest-cost companies don’t offer those discounts.”
Cheaper car insurance may depend on credit scores
Everything from your job to where you went to college is part of a complicated formula most insurance companies now use to come up with policy rates. Brasler said one of the biggest factors taken into consideration is your credit score — even more than your driving record.
“A lot of us have errors in our credit report,” Brasler said. “They’re relying on information that’s known to have tons of errors.”
People with fair and even good credit are being penalized with costly auto insurance because of those mistakes, Brasler said. He believes it’s worth the effort to get mistakes fixed.
“It’s not easy to do; unfortunately, the credit bureaus are notorious for being lousy at helping people out to fix these errors.”
Price differences for the same policy can be significant
Consider rates Checkbook found for a hypothetical couple living in Arlington, Virginia. Big companies such as State Farm, Allstate, Farmers and Nationwide offered policies costing more than $1,300. Compared with:
- $590 — GEICO
- $800 — Esurance
- $850 — Progressive
- $875 — Erie
“We found that some families, especially those with fair or poor credit, or who’ve had an accident, or God forbid they have a teenage driver on their policy — most of them could save $1,000 or more,” Brasler said.
Through a special arrangement with the nonprofit Washington Consumers’ Checkbook, WTOP.com readers can have a look at Checkbook ratings and price comparisons for auto insurance companies for a limited time.
Consumers’ Checkbook/Center for the Study of Services is an independent nonprofit consumer organization founded in 1974. It has for more than 40 years been an innovator in providing information to help consumers make smarter choices.