In today’s world with the price of EVERYTHING going up, we are all looking for places to save a few bucks. If you haven’t reviewed your insurance with a local agent in a while, that may be a great place to start. Today, I’ll talk about a few things specifically you can do to save money on your Car Insurance. I’ll do another article soon on Home Insurance.
The first thing to consider is raising your deductibles. If you’re still rolling around with your grandmother’s $250 deductible, it might be time to bump it up. Chances are, if you had a $300 accident you aren’t going to file the claim; and if you had a $3,000 claim you could scrounge up a $500 or $1,000 deductible. I like to check what I call the “break even point” on deductibles. If I raise my deductible from $500 to $750, I’m taking on $250 in risk. If this only saves me $10/year it’s not worth it. It would take 25 years to “break even”. If it saves me $100/year I could make a very good case for switching it.
In our post-covid / work-from-home world, many people still have rental car coverage that don’t need it. It’s not very expensive (on average about $50/year per car in the household), but if you have four cars that adds up. And if you have 4 cars and only 3 drivers, you probably don’t need it. If something happens to one of your cars, you’d just drive the other one. Don’t pay for it if you don’t need it.
Ditch The Kids
Ok, so this is easier said than done, but eventually it’s time to leave the nest. What most people don’t realize, is often times it’s cheaper also. Let’s pretend you currently are paying $2,000 every six months for you, your spouse and your 25 year old “kid”. Putting your son or daughter on their own may bring your insurance down to $500 and their insurance may only be $800. Saving you $700! In our agency we like to start looking at putting kids on their own policy around 22 years old. If the home has lots of expensive cars in it, it may make sense even younger. They can still drive your cars if they have their own insurance (just like I can borrow your car even though I’m not on your insurance). They just MUST have their own insurance. If it’s going to save you money consider retitling the car into their name and letting them set up their own policy.
Most car insurance companies have become discount heavy, and you’ve got to make sure you are playing the game. Sometimes people say, “I’m oldschool, I still like getting my policy in the mail every six months.” But then when I tell them it’s about $35 in savings, they quickly change their tune. With Allstate we have great discounts for going paperless, doing automatic drafts, paying in full and participating in telematics. These discounts combined can nearly cut the premium in half. If you aren’t getting them on your current policy let us help you.
Lastly, while we are at it, here are a few things we DON’T recommend for saving money:
DON’T Reduce Coverage
It’s pretty rare that I run into somebody that has too much liability protection. Find your savings somewhere else, and be weary of a sales person who is trying to get you to drop your liability coverages. You could lose EVERYTHING by being underinsured.
DON’T Constantly Shop Your Rates
One factor in insurance pricing is your longevity with your prior carrier. If you’ve had the same policy for 10 years and never spoken to your agent, then yes, it’s probably time to review. But don’t change every six months. You may save from company to company, but over time you’ll increase the overall cost of your policy.
DON’T Go “1-800” or “WWW”
For the past 20 years the companies who operate online and in call centers have paid billions for ads to convince you that it’s cheaper to get your insurance that way. It’s simply not the case. Our agency acquires new customers every day from these direct insurers and often save them hundreds if not thousands. You can buy your clothes online. Buy your groceries online. DON’T buy your insurance online.
Are you still unsure if you’re paying too much on your auto insurance? Contact me and let me help. Whether your a current customer that just wants to improve your policy with us, or if you have another carrier and you want help comparing I’m happy to help!
*All advice in this article represents just general recommendations and should not be taken as direct advice. Please talk to myself or another licensed insurance agent for specific recommendations regarding your insurance before making any changes.