The Greatest Advice and Tricks for Purchasing Car Insurance
Sometimes, practicing what you preach is the only way forward. I’ve long advocated for proactively engaging with insurance brokers to explore fresh policy options rather than settling for lackluster renewal rates. Yet, life’s distractions can lead even the most vigilant astray. I found myself, ironically, falling into the trap I warn against—settling. It took the significant event of purchasing a new home, which necessitated acquiring homeowner’s insurance, for me to insist my broker also scout out better car insurance rates. The result? A yearly saving of $600 and a doubling of my coverage. Picture this: enhancing coverage while slashing costs by 20%, simply by investing time in seeking out superior deals. Interested in trimming your car insurance expenses? Here are some top tips for securing the best deals.
Use a Broker (But Consider Online Options Too)
For years, I’ve stuck with the same car insurance broker because his quoted prices match those available online. The perk of having an agent is their ability to handle the grunt work of submitting your details to various insurers on your behalf. However, the drawback is their potential oversight in exploring all available options. Moreover, I refrain from repeatedly requesting proposals, as it could strain our relationship.
To gain a broader understanding of the market, it’s wise to periodically seek out quotes independently. Nowadays, accessing quotes is a breeze—simply visit the insurance company’s website, input basic information, and receive a quote within minutes. If you stumble upon a better deal, you can prompt your broker to match it. If the quotes align, great! Carry on, and revisit the process in a few weeks. It’s that straightforward!
Some Insurance Companies Offer Unlikely Discounts
Numerous insurance companies extend discounts to members or employees of specific organizations. Some even provide additional perks for individuals affiliated with them. Take Geico, for example, a subsidiary of Warren Buffett’s Berkshire Hathaway, which offers discounts to shareholders.
A friend of mine secured this discount by simply informing the agent of his stock ownership. Interestingly, no proof was requested; the agent readily acknowledged it and applied the discount.
Don’t Just Use Whoever Your Friend Uses
Every now and then, a friend will inquire about my car insurance provider, triggering a flurry of recommendations based on individual premium rates. Yet, premiums vary widely among individuals due to various factors, such as the type of vehicle owned, driving history, location, and even credit score. Each insurance company assesses these factors differently.
Some insurers may impose harsher penalties for accidents, while others might charge higher premiums for luxury vehicles. The true picture only emerges when you compare policy prices. Unless your circumstances mirror those of your friends—same area, same vehicles, same driver profiles, which is highly improbable—your rates and discounts will differ. So, while your friend’s insurer may be a good starting point, it’s essential not to limit yourself.
Shop Around… Constantly
The factors considered by car insurance companies are continually evolving based on real-world data. Your own circumstances also change over time, as you age. Hence, it’s prudent to regularly explore your options, as much as your schedule allows. While bombarding your broker with weekly emails for new quotes would be unreasonable, it’s advisable to check in at least annually or biennially.
Neglecting this entirely could prove detrimental to your financial future. So, take the initiative to conduct some research yourself. There’s a high likelihood that it will yield dividends. After all, I managed to save $600 annually—but only because purchasing a new house forced me to reassess my insurance needs. Who knows how much I could’ve saved if I’d checked earlier.
You Don’t Have to Wait For Renewal to Switch
Unlike many services where prepayment of premiums is common, car insurance allows for switching at any time without financial loss. It’s not bound by a rigid contract. Even if you’ve prepaid for six or twelve months, you’ll receive a refund for any unused portion upon early cancellation. This flexibility is necessary, considering many individuals sell their cars before their insurance renewal date. You can leverage this to your advantage.
There’s no need to wait until your renewal month to switch car insurance. If you find a better deal, you can make the switch immediately, regardless of whether you prepaid just a few weeks ago. Simply inform your current insurer of your decision to cancel. Despite their efforts to retain you, remember that you’re legally entitled to cancel at any time. Moreover, if you used a rewards credit card for payment, you’ll likely retain the rewards earned even after receiving a refund check from the insurance company.
Make Sure To Do An Apples-to-Apples Comparison
Insurance brokers can be invaluable in this regard. The array of insurance options available is extensive, allowing for customization of aspects such as deductibles, comprehensive collision coverage, and rental car reimbursements. When seeking multiple quotes, ensure that you’re comparing identical coverage. Otherwise, accurate price comparisons become impossible.
Verify all information provided to these companies meticulously. While you’re unlikely to mistake your birthday, don’t overlook details such as your driving record, VINs of your vehicles, or memberships in various associations. Sometimes, these particulars carry significant weight. Otherwise, what initially appears to be a great deal may turn out to be a subpar policy.
Ask About Discounts
When communicating with insurance companies, ensure you inquire about all potential discounts available to you. Common ones include multi-policy discounts, safe driving incentives, and affiliations. There’s a plethora of both obvious and less apparent discounts you might qualify for.
The evident ones encompass discounts for military personnel or senior citizens. Additionally, as previously mentioned, there are more obscure ones like the shareholder discount offered by Geico. Some insurers extend discounts to first responders, healthcare professionals, and students. You won’t know what additional savings you could secure unless you inquire. Utilize resources like Google to conduct research and uncover potential discounts.
Favor Raising Deductibles Versus Lowering Liability Coverage
What should you do if you receive multiple quotes and they all come back with high premiums? While it might be tempting to reduce your coverage, doing so could increase your potential liability. Instead, consider increasing your deductible. Although you’ll be responsible for more out-of-pocket expenses in the event of an accident, your coverage level remains the same.
It’s a balancing act, no doubt. You might worry about affording a higher deductible if an incident occurs. However, that expense pales in comparison to potential legal ramifications from a major injury resulting from an accident. The prudent approach is to select a deductible that you can comfortably manage financially. Whether it’s $500 or $5,000, raising your deductible will result in lower premiums.
If you’re in a bind, you can also trim other aspects of your coverage. For instance, if you have access to a backup vehicle (such as your partner’s or parent’s car) in case of an accident, you may opt to forgo rental car coverage. While this adjustment may not yield significant savings, every little bit helps.
Don’t Assume You Get the Best Rate with Multi-Policy Discounts
One of the reasons I neglected to change my car insurance prior to moving was because I believed I was securing a good deal by bundling my home and vehicle coverage together. As it turns out, I should have conducted a closer examination. My assumption, unfortunately, proved to be incorrect.
While I did receive a modest discount for bundling, the potential for greater savings existed. In fact, I ended up saving even more money by opting for separate insurance companies to cover my home and cars. If you had asked me six months ago, I would have incorrectly asserted that this wouldn’t be the case. Now, however, I am more informed. While bundling insurance can indeed be a fantastic way to save money, it’s crucial not to assume it’s the sole method for securing the best rates. If spreading your coverage across multiple companies ultimately results in savings, it’s worth pursuing.
Check Insurance Rates Before You Buy a New Car
It’s surprising that more people don’t consider this, but they really should. Did you know that in my area, a pickup truck valued at only one-third the price of a sports car costs the same to insure? I’m not entirely sure why, but it’s a fact. It could be because pickups are larger vehicles and thus capable of causing more damage in an accident, or perhaps they’re driven more frequently than the average sports car. Whatever the reason, pickup drivers aren’t receiving any discounts—at least not where I live.
The key takeaway is to never assume what your insurance costs will be when shopping for a new car. Various factors such as the year, make, model, size, and engine power all play a role. Even the frequency of car thefts can influence insurance premiums. So if you’re on a budget, it’s essential to factor in insurance rates when considering a new car purchase. Once you’ve narrowed down your options to a few vehicles, start reaching out for insurance quotes. You might discover that one of your choices will cost significantly more (or less) to insure. Most people only think about insurance after the excitement of driving off the lot in their shiny new car. It can be quite disheartening to later realize that insurance premiums will be a significant expense.
In Conclusion
Obtaining car insurance has become quite simple nowadays. You can either reach out to a broker or visit car insurance company websites directly to obtain quotes. Additionally, numerous online services are available that can automatically send quotes to multiple insurers on your behalf.
With these convenient options at your disposal, there’s truly no excuse not to search for better deals more frequently. While there are numerous ways to save on insurance premiums, they typically require some effort on your part. As with most endeavors in life, the more effort you invest, the greater the rewards.
