You are probably trying to save as much money as you can on various utilities, food and everyday goods. But are you overlooking your insurance policies? You can save money on those, too!
Last year, I wrote about how I was able to save about $400/a year when I called to review our car insurance policy. That’s quite a savings! Sometimes insurance companies will give you even greater savings if you bundle all your policies with them (vehicle, home, life, etc).
Some items that you’ll want to bring up with your agent (if you haven’t already) are the following:
- Single/married (some insurers think you’re more cautious if you’re married)
- Car stored in the garage
- 55 or older (if so, you can take a defensive driving class and have your rates lowered even more)
- Anti-theft device on the car (they’ll want to know if it is always on or you have to manually turn it on)
- Liability or full-coverage (if you’ve paid off your vehicle and it’s kind of a clunker, I might go with liability coverage)
- Have you participated in a safe driving course
- Your profession (for example, if you’re in the military – you may be eligible for certain breaks)
- Good driving record (they typically go back 3-5 years)
- Non-drinker (you can throw this out there – but many insurance providers can’t actually verify this info)
- Multi-policy discount (as mentioned before, insurers will give you a break if you have other policies with them as well)
What About Driving Less?
Another important item to bring up is the frequency of your driving. Is it mainly for pleasure or work? How much do you drive it on yearly basis? Where do you do most of your driving?
Personally, I have a long way to travel to work every day and the mileage on my car adds up. So, I typically don’t qualify for a lot of the discounts.
If you are someone who has very little drive-time and lives on the outskirts of the city or in a rural area, you could qualify for some good savings.
I asked my own agent about driving habits, how insurers reward those who drive less and how you can qualify for those discounts.
“Some car insurance companies give you a lower rate for Pleasure Use (which is less than 3 miles one way to work). Typically the next higher rate is commuting less than 10 or 15 miles one way (depending on the company), then the rate is a little higher for any commuting 10-20, over 20 or over 15 (depending on the company). Business Use is the highest premium,” she relayed to me.
Other Factors
My agent also told me that where you live is just as important as driving frequency.
“If you live in the city and use your car for pleasure use, you may still pay a higher premium than if you live in Small Town, USA and drive 15 miles to work one way.”
One last item of information my agent passed along to me was that many insurers are now giving people the option of using a device that plugs into your car to track driving habits.
“The driving habits they are measuring include: how fast you accelerate, how fast you break, how many miles per day do you drive and how often you drive after midnight.”
I found that Progressive offers a program based on these variables, called Snapshot. You are provided with a “plug” that goes near your steering wheel, which you drive with for 30-days. Afterwards, Progressive figures out your savings based on how much you drove.
Whatever your situation may be, now is a great time to call and review your insurance policies with your agent or insurer. I have found that if I can get a real person on the phone, I’m more likely to get better savings.
Have you reviewed your car insurance lately, and were you able to get deeper savings because you were driving less? Leave a comment!
{ 10 comments… read them below or add one }
Good article, well written. I will call and and review policies with my agent.
Never drop your comprehensive and collision coverage, even on a clunker! It could end up costing you alot of money!
We get a discount for low mileage. My husband is handicapped and only drives to doctor’s appt. So, yes, driving less can bring down your premium.
Rule of thumb is to shop identical coverage every 3-5 years. Then bundle with home owners, etc.
The selling agent makes 50% of the first year’s premium and 10% every year after that. Therefore, there is a lot of room to move on price for the first year.
I remember my homeowners went up after 9/11 because so many insurance companies took a loss the the Twin Towers. That is true, but my insurance company never insured the Twin Towers. Another implication comes from the insurance “that is the only one endorsed by AARP.” The insurance company came first and THEN invented AARP to endorse it. AARP is not an independent 2ND party. I’m a great guy. Just ask my mother.
Want to make better than CD money with no risk? Shop for no cost credit cards that pay you 1 or more % back on each purchase. Many have a sign up bonus of $100 for using the card 3-6 months. Chase Bank gave me $100 for just adding $10,000 to my existing checking account and leaving it there for 3 months.
I went to Chase Bank to see if they would match .8% offered by TCF Bank. They would not because they would LOSE money. They never could answer my question, “How is it that TCF will not lose money?” Next, they wanted to sell me some non-FDIC product that even made money in 2008. No thanks. I feel there is a big double dip coming with the new Obama Care tax.
Obama care will be run by insurance companies. Government can’t pay the bills now. What will the cost of our insurance be when people can’t pay the insurance premium for religious or other reasons and we have to pay it? I even heard the penalty for not paying is less than the cost of insurance. The penalty goes to the government and not the insurance companies. So what will happen to our premiums? This will take years and years to work out
Thanks for the comments/input.
As a former auto insurance agent I find the article well written and informative. Some of the comments are interesting to say the least. Annie, the most you can lose by dropping comp and coll is the value of the “clunker.” If the car is worth, say, $2,000, that is all you will lose. A small accident, like a dented fender, won’t matter. Just drive with a dented fender.
Joe, some companies offer additional discounts after you have been with them for 6 years and are claims free. The company I was with had big discounts for claims free driving after 3 years and even bigger discounts after six. Bundling with the home usually gets you the best rates for both the autos and the home. Captive agents who are employees of the company they work for are not likely to make the same high commissions as the person who owns his own agency. But the agency owner usually has to foot all the bills also.
Nearly all companies now look at credit scores to quote rates. The people with the highest credit scores get the lowest rates as a general rule. Why is that? Probably several reasons but the most obvious is that the people with the highest credit scores are the ones with the best driving records—and vice versa. There is a direct (although not absolute–there are exceptions) correlation. There is less likelihood of policy lapse and the cost of collecting past due premiums and reinstatement of those lapsed policies. Additionally, the drivers with the best credit scores and driving records are less likely to move around from one insurer to another every few years. In the long run, moving too often will not save you much money because you will never be with one company long enough to qualify for all the best discounts.
Many of the established, well known companies with offices and agents in your community are likely to give you better service than insurance you buy online—but not always. If your driving record and credit score are so poor you have to go with a sub-standard insurer, not only will you pay more for the insurance but you may also be in for the hassle of your life if you have a claim.
If you want to know how well auto insurance companies pay their claims and how difficult they may be to deal with, just call about three established local auto body shops and ask them about the insurer you are considering. Ask about the best and worst companies to deal with and why. Speak to the owner, manager or clerk who deals with the adjusters and insurance companies. If they are not happy with a company chances are good you won’t be either.
Great info Ron – thanks.
Insurance is an intangible. You really don’t know how good the company is until you need it. For home damage, the adjuster is there fast and settles fast. By allowing you think, you remember a lot more stuff that was lost. Best to video tape the whole house and store the recording other than in your house. Check a video of your garage: gallon of new paint, $50, paint brush, $6, clock $12,coffee pot, $12, light bulbs, $35………..it ads up quickly.
Ron, great insight on the comments section. Thanks for sharing your expertise.
Also, the deductible is something I always ask about when shopping and play around with the options. Find out the premium at different deductibles. If you have a solid emergency fund, there is no need for a really low deductible and in many cases it’s well worth taking on a little bit more risk with a higher deductible to save on premium.
For a former insurance agent like Ron who has professional experienced in insurance industry, it is a good information that we acquire insurance policy from the insurance company within our community but since people are becoming more indolent, online insurance companies are being on top of the insurance industry. It is also important that we acquire information from other people about the insurance companies in our community to know which ones the give the best offer.