You are probably aware of the GEICO commercial where they say 15 minutes could save you 15% on your auto insurance. Well, recently our auto insurance came up for renewal. I have made it a habit to email over my policy to a couple of places to see who has the best deal for the coverage we look for. I like to shop around because it’s so easy to do. Especially now that I’ve got a few different people to have giving me their best quotes.
About a year ago, we were able to save a good deal by splitting up our homeowners and auto insurance policy by going with an endorsed local provider of Dave Ramsey. He ended up insuring our auto with a company called Grange insurance. We were happy to save the money and paid our policy in full for a year long term. Of course, this made our homeowner’s policy go up, but the net policy change was still a good amount of savings for us.
After working through the below things, we settled on going back to our Illinois Farmers agent, Corey Divietro. We ended up saving about $350 over another year by bundling the policy and grabbing some great policy discounts.
Things To Look At When Shopping For A New Policy
Check price differences by how often you pay.
Whether you pay monthly, quarterly, bi-annually, or yearly can affect your premiums. Make sure to go over these with your agent or broker before signing up. Most of the time, when you pay monthly, you will be paying the most.
For us, we ended up going with the bi-annual term since it was actually cheaper than the annual premium. When I asked about this, I was told that it’s because of the duration that your policy is locked in for. I’m betting that we won’t be getting into an accident in order to lock in the savings over the next year.
Email multiple agents and brokers to get their best price.
We got quotes from three different places.
Geico was cheap, but couldn’t insure us for some of the terms we got with others on the auto policy. Their maximums for property damage was only $100,000. We currently have it set at $250,000. This quote was also with a deductible of $500, the same as we had.
Grange Insurance was more expensive but came in at around $521 for 6 months.
Farmers ended up coming in at $532.90 but also saved us $350/year for our homeowner’s insurance. On top of that, we were able to drop our deductible from $500 down to $100 and get all the same terms as we had previously!
Check to see if upping your deductible is actually worth it.
This was kind of interesting for us. I was thinking about going from a $500 deductible to $1000, but it was only going to save me $30 over 6 months. And that was actually going down to the $100 comp deductible! Upping our deductible didn’t make sense since spending $30 every 6 months to save $900 if we had a problem made more financial sense.
It’s definitely worth it to ask to see how big the savings are. But do the math and see how long you’d have to go without an accident. Plug it in like this:
Increased Deductible/savings over one year = time without an incident
For us, this means 900/60 = 15 years. This is not very probable. I do think we are good drivers but you never know who else is out there.
Look for discounts
There are lots of discounts that are available with different insurance companies. Make sure that you are qualifying for them since they can add up to some big savings! Some savings that we were able to take advantage of were: Safe Driver Discount, Multi-Car Discount, Homeowner, EPolicy Discount, Auto/Home Discount, Paid In Full Discount and Good Payer Discount.
Definitely ask your agent if there are any new discounts that you can qualify for when shopping for a new policy.
When is it worth dropping full coverage?
We opted to keep full coverage even though the value of our older car is only $2000 since dropping the coverage would have saved us only about $300/year. It’s nice to have the peace of mind and we’d have to go 7 years with no incident for this to actually pay off… To come up with that 7-year number we had to go through another simple equation:
value to replace/savings per year= number of years to break even
For us, the equation was: $2000 value of car / $300 a year savings = 6.67 years
For us, almost going 7 years without being in an accident and having our car fixed would be too long. And with only having a $100 deductible, we were willing to transfer that risk.
Is it time you checked your policies?
If your auto or home policy is coming up soon, you may want to shop around. You may be leaving money on the table! All you have to do is grab your policy documents from your current policy and then send them to agents of the big companies and see what they can come up with or just find a broker that can shop around for you.
What has been your experience? Do you have any stories where you’ve saved more? I’d love to hear your experience in the comments!