Five minutes won’t necessarily save you 5% or more- but spending five minutes reading this blog will give you five tips on how to save money on your auto insurance.
The amount you pay is more than just the amount you write the check for.
Imagine having a membership to Amazon Prime and not realizing that included in your $99 Prime membership, you get free shipping? Imagine that you’ve been shelling out shipping fees for years. Because you didn’t realize that you didn’t have to. That would be crazy, right???
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; but when you compare policy A at one company to policy B at the other company- and dollar to dollar- they are just about the same- the company that has more perks on top should be the clear cut winner.
Also, having an actual person in an office brings monetary value. When you come home and your sump pump has failed you and you have 4 inches of water sitting in your basement – you may want to be able to text someone frantically to ask “please tell me I have coverage for this!” and actually get an answer. That isn’t even a line item on an insurance quote.
Bundle your coverages.
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. Interested in life insurance? Have your auto insurance agent give you a quote (most will also offer life insurance).
Look at your Deductible.
There are two main words used in the insurance words. “Deductible” and “Premium”. Deductible is the amount of money that you are responsible for paying before the insurance company starts to help you out. Premium is the amount of money you pay each month.
You get to choose your coverage- so play around with how big or small of a deductible you feel comfortable with. The more money you are comfortable with paying at the time of a loss (higher your deductible), the less you are going to pay each month for your policy overall. This is because the insurance company feels that you are taking responsibility for more of your own risk.
For example- if you have a $100 collision deductible- it means that if you hit someone, you will have to pay the first $100 to get your own car fixed. Then your insurance company will pay the rest (or total your car out and pay the Blue Book value). If you have a $1000 collision deductible- it means that you would pay the first $1,000 to get your own car fixed. In both of these situations- the $1,000 deductible policy will be much cheaper than the $100 policy.
Raise your credit score and try to pay in full.
Establishing a good credit score can lead you to some nice benefits- including a lower insurance premium! Research has shown that people who effectively manage their credit make fewer claims; therefore, auto insurers are able to correlate this. 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.
If you drive very little- tell your agent.
Some companies offer discounts to people who drive very little- or less than the average miles per year- so it’s important to have a candid conversation with your agent about how many miles (on average) you drive your auto. If you have one car (out of several) that you are insuring that is driven sparingly- make sure you point that out as well.