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.