If you have ever watched TV, listened to the radio or driven past billboards, you are doubtless familiar with the ubiquitous phrase “15 minutes could save you 15% or more on your auto insurance.” Although 15 minutes on the phone with that particular company may not result in any discount for you, a little insurance comparison shopping may still afford you some relief on your monthly premiums.
Insurance Is Not One Size Fits All
When purchasing car insurance, you are actually paying for a number of products. Some of these you need and others you don’t. The components of an insurance policy may include separate coverages like collision, PIP, uninsured motorist, medical, rental car, etc. some of these coverages may be required by your state or by the lender carrying the loan on your car. In any event, it is important that you understand which coverages are mandatory and which non-required coverages would serve you best. Many people are over budget on car insurance because they carry coverages they do not need. It is also important to remember that a less than honest agent, because he works on commission, may try to tack on such unnecessary coverages.
The cost of these coverages varies from company to company and can come with a broad range of prices. Insurance companies consider several factors when calculating the cost of your premium. Such things include:
- Make and model of car
- Home ZIP Code
- Credit score
- Driving record
Most people make it a point to diligently research vehicles before purchasing one, but few work as hard to acquire the insurance necessary to protect that purchase. The Progressive Insurance company did a consumer survey and found that only 20% of drivers make it a practice shop around for insurance. A companion study illustrated why not shopping carefully is a foolish thing to do. Their research showed that, for the same coverage on the same car on the same driver, the difference between companies could be as much as $600 for a six-month policy. If a driver’s intention while doing car research was to find one that would save them some pennies on their gas cost, they should remember that they can buy a lot of gas with $600 worth of pennies.
The moral of the story here is that you shouldn’t just go with your father’s insurance company, the first one that pops up on the Internet or even stick with the same one you’ve been using for years. As Smokey Robinson once said, “My mama told me, you better shop around.”
How to Shop Around
Whether shopping by phone or online, be sure to get quotes from at least three different insurance companies. Doing so will offer three different baseline quotes and may give you an indication of the kind of price differences mentioned before. While these quotes are relevant, price should not be your sole consideration. Just because two companies offer coverages with the same name, it doesn’t mean that both coverages supply the same protections. Besides reading the fine print, it may also be beneficial to check the company’s claims service and customer satisfaction track record using sites like JD Powers and Associates.
Shopping around does provide the possibility of greatest savings on your premiums, but there are a few other ways to keep some money in your pocket. Some of these methods can be performed easily while others are a bit more impractical.
- Get married
- Get older
- Take a defensive driving course*
- Have a car alarm installed
- Pay six (or even 12) months of premiums in advance. This will help you avoid any interest charged for “financing” your premiums.
- Move to a “better” ZIP Code. If an area has a high percentage of uninsured motorists, premiums will be higher.
Since insurance is a product that is at its best when it is never used, it’s an expense that can be a bitter pill to swallow. On the other hand, the prospect of saving as much as $100 a month may turn doing a little homework into the spoonful of sugar that will help the medicine go down.
Contact your insurance agent about how much you could save with a defensive driving discount and then check out ApprovedCourse.com.