10 Ways to Save on Auto Insurance

by Vered DeLeeuw · 8 comments

I was so fed up with my insurance company! Premium hikes every single year, even though we never filed a single claim; an indifferent agent; and a premium that was outrageously expensive to begin with.

For a few years, I was so busy raising small kids that I neglected our finances. But as soon as my kids grew up a little, and I had more time on my hands, I knew it was time to start shopping around for a new insurer.

So I cleared up a morning, and started making phone calls.

My first step with each insurer I was considering was to check its financial strength on the A.M. Best website. Admittedly, if you don’t purchase life insurance, this is not as important, but I still wanted to make sure the insurer I was considering was not about to collapse anytime soon. Of course, these things change, and after the recent financial crisis, it probably makes sense to pay another visit to the A.M. Best website (it’s on my to-do list!)

Next, I talked with several insurance companies’ representatives. Remember the GEICO tagline, “fifteen minutes could save you fifteen percent or more on car insurance?” Well, this is not exactly the case. The truth is that if you really want to save, you will need to spend at least half an hour with each representative. This is actually a good thing, as you WANT them to walk you through every possible way you can save money with them.

Here are the things you should be asking/ discussing:

1. Can I get a group discount? Some insurance companies offer group discounts. For example, when I bought a BMW, I received an offer from Liberty Mutual to enjoy its group discount for BMW owners.

2. If I insure all my vehicles AND my home with you, will I get a discount? Most insurance companies offer a discount if you carry more than one policy with them.

3. Do you offer a good driver discount?

4. Do you offer a Professional Group discount? – Some insurance companies offer a discount if you belong to certain professions – just because you belong to that profession, even if you don’t actually belong to any group or organization related to that profession.

Next, go over the policy (whether an offer from one of the companies you talked with or your current policy), line by line, and make sure you do the following:

5. Raise your deductibles. The higher the deductible, the lower your monthly premium. I have raised our collision deductible to $1000 and our “other than collision” deductible to $500.

6. Do you NEED coverage for damage to your car? Liability coverage and uninsured motorists’ coverage are probably a must. But if your car is very old and very low in value, you could decide that you don’t really need to pay for damage to your car at all – whether collision or otherwise.

7. Do you need “transportation expenses?” I’ve decided that even if we can’t drive one of our cars, we’ll be able to manage without renting a car, so removed this section from the policy. I did however keep towing coverage.

8. How much do you drive? The default mileage on your policy is likely the average US mileage. If you drive less, your premium could be lower, especially if the car is classified as “pleasure use” rather than “commute.”

9. Make sure you get any vehicle discounts such as discounts for an anti-lock braking system, for anti-theft devices or for air bags.

10. Review your policy at each renewal. Tedious – yes. But important. Make sure that all your discounts still apply, and check to see if you may be eligible for additional discounts.

I was able to save several hundred dollars in annual premiums after switching to a new insurance company and making sure I was receiving all the discounts. It didn’t take me fifteen minutes – it took several hours of research – but I think it was well worth it.

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{ 8 comments… read them below or add one }

Justin May 19, 2011 at 7:20 am

I couldn’t believe how much I saved when I switched from esurance to Progressive once we rolled our home owner’s insurance in, I’m saving about 400 bucks every six months over what I used to pay.

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Molly May 19, 2011 at 9:14 am

This article is good. I had state farm for 10 years and never bother to look. At every renewal, the premiums just kept going up and up. The staffs at the state farm was so kind and it felt like family…yeah right ripping me off. So, finally last year I finally got my lazy butt off the couch and started to make phone calls. I saved over 65% and didn’t even bother to call my old agent.

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Amy Saves May 19, 2011 at 11:07 am

cool, I didn’t know that about deductibles. Thanks for the tips.

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Jane May 19, 2011 at 7:58 pm

Thanks for the tips. I never would have thought to ask about group discount. I have to get over my fear of switching from Erie after 15+ years and no claims. I have this superstition that if we switch we will get into an accident. Silly I know. Doesn’t hurt to call around to get quotes.
Any tips on how to check the response/service of the insurance company. It’s one thing to save money but lousy service and getting dropped with the first claim is something to consider.

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Mike May 20, 2011 at 11:08 am

Loyalty means nothing. I know they’d like you to think so but it doesn’t anymore. I do 12-month terms and shop around every year. I’ve been with Progressive on 2 separate occasions, did Erie for a bit then they went way up (said it was because the state law required them to, bs), now I’m with Allstate.

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Paul May 20, 2011 at 11:59 am

I reviewed all my insurance policies in 2010, and the best group discount I was able to find was through my college alumni association. I also implemented all the ideas in this article. I am convinced that the auto insuarance companies make quite a bit of profit off of the fact that most policy holders don’t realize that they are overinsured and don’t take advantage of all the available discounts.

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Mike May 21, 2011 at 3:26 pm

You know, these are great tips. I actually review my rate every six months because that’s the type of policy I have.
I am currently blogging about ways to save money to pay off my mortgage and this was one of the areas that I tackled first. I have Progressive and I tested out the new Snapshot discount. Basically, they sent me a gadget that tracks my driving. You get a small discount off the top, 4% I think. Then based on your driving, you could get up to 20% off at renewal. If you’re a safe driver and don’t do too many hard brakes– might be worth looking into. But even with the discount, I’ll still take an hour to shop around every six months because I have saved hundreds of dollars in the past.

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Cin May 21, 2011 at 8:33 pm

I had to switch carriers after several robberies in my home. 21st century only had the usual deductions of whatever you set but when I switched to AllState I got many deductions at the level I set. It ended up I got a lot less then I should have so make sure to get a written quote with all deductions before switching, luckily I had very lttle left worth anything other than the house at that point but you might be so lucky in a similar situation. Cin

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