Five minutes won’t necessarily save you 5% or more- but spending five minutes reading this blog will give you six tips on how to save money on your auto insurance
1- Bundle your coverage
Going with the same insurance company for all of the products that you insure will likely be your best option- as they will most certainly give you a discount for bundling your products together. Own a home or rent an apartment? Bundle that coverage with your auto insurance.
In today’s insurance market- not bundling your coverages can not only cost you more money; but it can also cut the number of insurance companies that are willing to work with you down over 50%. Personally, it seems like smart shopping if you have 20 products that will work vs. if you only have 3- because the smaller the supply- the higher they can price their products.
Give yourself more options and let the insurance agent helping you quote both your wheels and your walls.
Duh! All things being equal- someone who has had several tickets in the past five years showing that they only drive 20 mph over the limit- is going to have to pay more than someone who has never gotten a ticket in their life.
In fact- the average amount that a speeding ticket will cost a person by the time their insurance price increases- is $3,000 over 5 years (while that ticket is falling off the look-back period).
Big tip: Always go to court if you get a ticket! In most cases, you will still pay the fine, but if they change your 20 mph over speeding ticket to a defective speedometer (or any non-moving violation)- your price won’t increase much (in some cases, it won’t increase at all) and if you shop around for new insurance- it won’t pop up as a moving violation at all.
On the flip side- no matter what- always make sure to pay your tickets! If you forget or refuse to pay for your ticket(s)- you will likely end up with a suspended license. Not only will having a suspended license make your auto insurance price go up- but if you drive while your license is suspended- a driving while suspended ticket is much worse than a speeding ticket in terms of how risky the insurance company believes you are.
2- Guard your driving record
3- Look at your deductible
There are two main words used in the insurance world when you are talking about your policy and how much it costs: “Deductible” and “Premium”.
Premium is the amount of money you pay for your policy. You might pay monthly, quarterly, semi-annually, or annually- but the amount of the bill is called your premium.
Deductible is the amount of money that you have to “pay” before your insurance kicks in. Okay- the insurance company does not make you pay THEM- it is just the amount that the body shop will end up billing you at the end of the situation.
You get to choose your coverage- so play around with how big or small of a deductible you feel comfortable with. If you want the price of your policy (premium) to go down- offer to pay more when and if you actually have a loss. A $1,000 deductible costs less than a $250 deductible- even if everything else is the same- because the insurance company feels more confident that you are taking responsibility for your own risk.
4- Raise your credit score and/or try to pay in full
Establishing a good credit score can lead you to some nice benefits- including a lower insurance premium!
Statistics have shown that people who effectively manage their credit make fewer claims and are less likely to have bounced or stopped payments.
Most companies will even let you get this part of your rate “re-run” so that if your credit score went up significantly, you can take advantage of a better price without having to leave the company you are with (assuming you love everything else about them). The “con” to this is that usually if your credit has actually gotten worse- they can raise your price- so only ask if you can do this if you are certain that your score has gone up a decent amount since the time you purchased your policy.
To be sure that you’re getting the good credit you deserve, it’s a good idea to check your credit record on a regular basis to make sure all of your information is accurate and to make sure you are making all of your payments on time.
Additionally, most insurance companies have pay-in-full discounts that are pretty significant. If you are able to pay for the entire 6-months at a time (instead of breaking it into monthly installments, which usually end up with a service charge added on), you will end up saving a nice chunk of change.
5- Take advantage of paper-less billing, e-policies, and other programs that lower your price.
Some companies offer discounts to people are willing to forego getting lots of paper through the mail.
Make sure to talk to your agent about these so you know what action items you are expected to do after the policy has been purchased; however, because in many cases- not doing something like validating your email, creating a username/password on a portal, signing online applications, etc- within a certain amount of time can result in the money saved via that discount being charged right back to you.
Sure, it is one thing to say you want the discount for enrolling in paperless- but if you don’t verify your email and/or electronically sign the paperless permission slips- it will kind of seem like you don’t actually want the discount. You only get to keep the discount if you follow the instructions.
6- Consider everything that is included in your price- not JUST the dollar figure.
All things being equal- two policies from two separate companies may cost the exact same amount of money; however, just because I might pay $100 / month and you might also pay $100 / month- the policies are most likely different than each other.
It’s plain to see if you are comparing “how much” coverage your policy has or what deductibles you will have to pay for comprehensive or collision- since it is right there on your dec pages.
If you are purchasing cereal at the grocery store and one box is family size and one box looks like a munchkin next to it- but they are both the exact same price and the exact same cereal- it is a no brainer that the larger box for the same price is “better”. This is the same for insurance- where if one has a “bucket” of $100,000 in case you are at fault for an accident – and the other policy (same price) has $250,000 in case you are at fault for an accident- but they cost the same price- it becomes clear that you should probably purchase the $250K limit.
But what about the “extras”? The features that are built into the policy? Are you considering those when you stack one product up against the next?
If two insurance policies are nearly identical in every single way (coverage, price)- except one has vanishing deductibles and one doesn’t- that vanishing deductible can save you money later on if you have a claim. For example- one year from now, you still have the same coverage limits- except if your collision deductible is now $900 instead of $1000 and you have to use your collision insurance- you have just saved $100.
The policy that had the vanishing deductible turned out to be $100 cheaper- even though you are paying the exact same monthly price.
Many times, customers don’t realize that they get perks with their insurance, such as vanishing deductibles, claims forgiveness, an online app with GPS that they can use to call a tow truck if they get into an accident, and safe driving rewards programs. Sometimes these are hard to monetize, especially if you are brainwashed that you “just want the cheapest policy”.
Also, having an actual person in an office brings monetary value. How great is it that you have “a person” that you can call and run things past so that you can make sure you are taking advantage of every facet of your insurance protection without ending up with large price increases or surcharges years down the line.
That isn’t even a line item on an insurance quote.
Contact us if you would like us to review your insurance policies and quote you with our suite of carriers. It is great to have a variety of options available for people!
Reach out by clicking the “get a quote” button at the top of the screen or emailing us.
