Nebraskans can expect to pay almost $40 per month less than the national average on their annual auto insurance premiums. The state’s low-density population and inexpensive car repair costs contribute to the lower premiums. However, just because rates are lower than a fair portion of the rest of the country doesn’t mean you have to be satisfied with them. The savings are out there, and all you need to do is take the time to find them.
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State Farm tops this list of recommendations, but it may not be the insurance company that is best for you. Insurance companies weigh a variety of factors when calculating your rate: your age, your driving history, your vehicle’s make and model, your ZIP code and more. Every company has its own formula that measures the data differently. The moral of the story is to find out which company has the best car insurance for you, you need to get at least five quotes and compare them.
So, you need to shop around, and it’s a far easier process than you might think. You should be able to get most quotes online in less than five minutes. If you do have to call for a quote, expect it to add 10 to 15 minutes to the process. You’ll know most of the information asked of you by heart, but it’s a good idea to look up the details of any recent accidents you’ve been in and have your vehicle identification number on hand before you start.
Our Top 7 Picks for the Best Cheap Car Insurance in Nebraska
These seven companies are top choices for anyone looking for auto insurance in Nebraska. Each one received high financial stability and customer satisfaction ratings from A.M. Best and J.D. Power, respectively. A.M. Best measures a company’s long-term financial stability, and a high grade is a good indication that your insurer can pay claims as needed. J.D. Power is a global leader in assessing customer satisfaction. Getting into an accident is stressful enough. The last thing you want is your insurer dragging its feet when it’s time to pay out. With these seven companies, that shouldn’t be a problem.
Nebraska’s Minimum Coverage Requirements for 2020
Nebraska law requires all drivers to have $25,000 of bodily injury coverage per person and $50,000 per accident, plus $25,000 of property damage liability coverage.
Is minimum coverage good enough?
Whenever possible, it’s better to purchase more than the minimum liability coverage. Don’t believe it? Consider these facts:
- The average driver will have an accident every 17.9 years.
- The average cost of a disabling, nonfatal injury is $93,800, not including property damage.
Say you had only the minimum coverage and you caused an accident that led to a costly injury, like the one mentioned above. Basic, cheap car insurance is responsible for $25,000, leaving you on the hook for the remaining $68,800. You’re likely to end up being sued and draining your bank account to pay what your insurance doesn’t cover.
That same scenario would look a lot different if you had purchased higher coverage limits. Raising your liability limits to $100,000/$200,000/$100,000 would cost you about $215 more a year with State Farm. And then you wouldn’t have to pay anything out of pocket because your insurance would cover the full cost of the damages. To most people, it’s worth paying more on their monthly premium to avoid the risk of huge out-of-pocket expenses.
If you like your vehicle functioning and in one piece, consider collision and comprehensive coverage as well. These pay for damages to your vehicle, regardless of whether the accident was your fault. Collision deals primarily with accidents involving another vehicle or single-car accidents, while comprehensive takes care of damages resulting from natural disasters, theft, vandalism and wildlife collisions. No-fault insurance is a type of insurance add-on that covers medical bills of those in the car, regardless of who is at fault. In Nebraska, this is optional coverage and not required.
What happens if you skip coverage?
If you skip coverage, it’ll cost you. Driving without insurance in Nebraska will result in hefty fines and suspension of your license and registration. A $50 fee is required to reinstate your driving privileges and you must also file an SR-22 with the state. An SR-22 is a certificate your insurance company files with the state that proves you have the proper liability coverage. You must maintain the SR-22 for at least three years. It is usually expensive to get one because it signals you have a bad driving record.
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Why are Nebraska’s rates so cheap?
So why do Nebraskans pay 33 percent less than the national average for their auto insurance? First off, the state is largely rural and that looks good to insurance companies because the chances of colliding with another vehicle are lower. Theft and vandalism are also less common in rural areas compared with metropolitan areas.
Secondly, the low percentage of uninsured drivers lowers rates. When there’s a lot of uninsured drivers around, there’s a greater risk insurance companies will have to pay for damages, even if you weren’t at fault. Nebraska presents little risk of uninsured motorist claims, so the insurers are willing to give price breaks to Nebraska residents.
Third, Nebraska’s auto repair costs are also among the lowest in the nation. According to CarMD, the average cost for a single repair is $369.60. So when you file a claim, the insurance company can pay less than it would in other states to get your car back up and running. And less money out of the insurer’s pocket means less out of yours as well.
Finally, Nebraska has a crash fatality rate that’s only a few points higher than the average but lower than some adjacent states. Generally speaking, the more distance you have between hospitals, the more fatalities you have. It doesn’t seem to affect Nebraska, though, and that translates into lower rates for everyone.
Even If You’re Happy, It’s Best to Shop for a New Policy on a Regular Basis
It’s a smart idea to shop around for auto insurance about two times a year. Even if you stay with your current insurance provider, your costs could be lowered by hundreds if you request a reassessment of your rate, especially if it’s been a while since you were last assessed. Your auto insurance is largely based on the value of your car, so when that value depreciates, your insurance premium should be adjusted down accordingly.
If it’s been more than three years since your last accident or ticket, you could be due for a premium reduction. In general, you can qualify for a reduced rate when it’s been three years since the filing of the traffic violation’s police report. Make sure that your carrier reassesses your policy with the awareness that the violation is out of date. Being categorized as a good driver can get you great deals on insurance.
If you were considered a young driver when you initially applied for insurance with your current carrier, ask for a rate reassessment. If you’re over the age of 25, your rate may improve if your insurer no longer categorizes you as a young or new driver. Each insurer defines “new driver” in slightly different ways, so make sure to ask the insurer to see where you stand. Some companies base their definition strictly on age, while others set a time period that must lapse after you first get your driver’s license.
A low credit score may also impact your auto insurance rate. The reason for that is because drivers with bad credit are more likely to file insurance claims. So, if your credit score has improved, you should certainly shop around and ask your insurer to re-evaluate how much you’re paying.
When calculating your rates, insurance companies look at more than your level of risk; they also look at how often you shop around. They analyze all kinds of personal data, like your credit score and online shopping habits, to figure out how likely you are to switch insurers. This is known as price optimization. Consumers who aren’t likely to shop for a better rate will be quoted a higher price at renewal time than someone who seems likely to leave.
That shows the insurers that you’ll go wherever you can to get the best deal. The insurance companies are out to make a profit, but they need to keep your business to do that. So if they think you’re a savvy shopper, they’ll offer you more competitive rates. It’s a sad reality, but it’s the truth.
In the past few years, more than 15 states have banned price optimization, claiming it violates state laws and unfairly discriminates against certain consumers. Nebraska has yet to do that, but fortunately, it has made an official effort. In January 2015, the Consumer Federation of America reached out to the insurance commissioner of Nebraska, urging the state to outlaw this practice. Over a year later (Feb. 16, 2016), a bill on the subject made its way to Washington. This is what Steve Schneider, the Midwest Regional Vice President of the American Insurance Association, had to say:
“We are concerned that the inclusion of the phrase ‘including, but not limited to’ is overly expansive, meaning that almost anything could be construed to be the practice of price optimization. Insurers already operate in a heavily regulated environment, so the uncertainty of this vague phrase is troublesome. If enacted, this language could perplex insurers and handcuff the authority of the state insurance department to effectively regulate insurer practices.”
So in the meantime, it’s up to you to avoid premium hikes due to price optimization.
To find cheap car insurance that actually protects you, you’re going to have to do the work. Take the time to get some quotes and compare them. Fortunately, that process doesn’t involve a lot of work, and a half-hour of research is all you need to score some pretty big savings. Remember: You can find over $900 in savings in less than 30 minutes.
It’s also super-important to invest in the coverage that gives you peace of mind. Most of us don’t have $100,000 lying around to pay an accident victim’s medical bills or car repair costs. Upgraded coverages may not cost as much as you think. And the peace of mind that comes with knowing you have sufficient coverage may be worth the extra cost. There’s no reason not to look into expanded coverage.
Best Car Insurance in Nebraska
- State Farm
- Auto-Owners Insurance
- Shelter Insurance
- American Family