Everyone wants to save money! And with today’s struggling economy, more than ever families are looking for ways to lower their bills. Car insurance is one of those bills.
Your car is incredibly important to you. It gets you to work, acts as a taxi service to your active kids, and helps you tote your groceries home. And when your car is out of commission, you feel the loss!
Making sure your vehicle is adequately insured is incredibly important, and in most states, required by law. It gives peace of mind to know that if your car is in an accident or gets damaged, your insurance will cover your repairs. Often, your insurance will also cover a rental to drive while you wait to get your wheels back on the road.
And while knowing your auto insurance will cover your needs, paying for it can be quite expensive!
So how can you save money on your car insurance?
As an independent insurance agent at Baily Insurance Agency, I quote car insurance every day. I work with numerous insurance companies to help my clients find the best rates on their home, auto, and other personal insurance needs. Like a detective, I look for various ways to help my customers save on their car insurance.
In this article, I will share with you the top 5 ways you can save up to 30% on your car insurance policy. You’ll find information on:
- Bundling your insurance
- Payment plans
- Telematics and Phone Apps
- Raising deductibles
- Account reviews
#1 Bundling
If you have car insurance, it’s likely that you also have homeowners insurance, renters insurance, or some other insurance policy. And it’s also likely that the company who writes your auto insurance policy also writes those other types of insurance policies.
When you have the same insurance company write two or more insurance policies for you that is called bundling. And most of the time bundling your insurance results in savings!
How much will you save when you bundle?
The amount you will save varies from company to company. Overall you might see a 10-20% savings on each policy — that’s right, you will get a discount on your homeowners policy, your auto policy, and any other policy you are bundling together.
What companies are known for offering great discounts to their clients who bundle?
Travelers, Progressive, Safeco (Liberty Mutual), Auto Owners, Encompass, Donegal
Are there any reasons I wouldn’t want to bundle? Any drawbacks to bundling?
Typically no – most of the time, bundling just ends up saving the policyholder.
But when you work with an independent agent, your agent will quote your policies bundled with multiple insurance companies, but they will also quote your policies independent of one another. Then your agent will advise you if it makes sense to place your policies with multiple companies or to bundle them together.
The other time bundling might not work for you is if you are looking for special coverages. Some companies don’t write a line of coverage for mobile homes, ATVs, motorcycles, etc. If you need special coverage, your insurance agent may need to find coverage through multiple insurance companies.
#2 Payment Plans
Insurance can be pricey, so many people opt to pay their premium monthly or quarterly. When you set up your payment plan, there are two ways to save money on your car insurance.
Automatic Withdrawal
When you set up an automatic withdrawal for your bill, your insurance company may offer you a discount.
Why?
Automatic payments are a way of guaranteeing payment. This means that you will not likely change insurance companies mid-year. Insurance companies like to insure customers that will stay with them for several years. With automatic withdrawals, your bill is guaranteed to be paid on-time, and the insurance company won’t need to send you a paper bill in the mail.
How much will you actually save?
When you set up an automatic withdrawal, you will avoid being charged a billing fee. Over the years, billing fees have become more and more expensive. I have even some companies charge customers a billing fee of $8 per month!
Overall, when you set up automatic withdrawal you can expect up to a 5% discount each month.
Which companies give discounts for automatic withdrawals?
Travelers, Progressive, Safeco (Liberty Mutual), Auto Owners, Encompass, Donegal
Paying in Full
The other time that insurance companies will offer a discount is when their client pays their entire premium amount. You will receive the best discounts for paying in full.
Why?
Again, insurance companies reward customers for staying with them – for being loyal. Insurance companies do not want their customers to switch companies mid-year. Also, when you pay in full, the insurance company knows that you can pay the whole amount and that they will not need to send out paper statements through the mail.
How much can you actually save?
You can expect a 10-12% discount when you pay-in-full.
Which companies give discounts for paying in full?
Travelers, Progressive, Safeco (Liberty Mutual), Auto Owners, Encompass, Donegal
#3 Telematic Devices or Cell Phone Apps
In the past few years, insurance companies have started discount programs for their clients who willingly use a telematics device or a phone app to track their mileage.
How does this work?
The insurance company provides you with a telematics device to install in your automobile or asks you to sign up using an app on your phone.
Then, over six months, the insurance company tracks your daily distance, the amount of time your vehicle is used every day, the time of day that you do your driving, and any hard braking. After six months, the insurance company reviews the data and determines if you qualify for a discount.
One good thing to note is that if you don’t qualify for the discount, the insurance company will not penalize you for anything they learned in their data. They will not raise your rates.
What are insurance companies looking for?
Drivers who are on the road less are also less likely to be involved in an accident and less likely to file claims.
Insurance companies also look at the time of day you are driving. People driving early in the morning or late in the day are more likely to have claims.
How much can you actually save?
If you qualify for a discount, you can save up to 30% on your car insurance premiums. That’s significant savings!
What companies offer this discount?
Travelers, Progressive, Safeco (Liberty Mutual), Auto Owners, Donegal
#4 Raising Your Deductibles
One way you can always save money on your auto policy is by choosing to raise your deductibles. By raising your deductible, you are decreasing the amount the insurance company will have to pay on your claim.
Are there reasons I shouldn’t raise my deductibles?
When you raise your deductibles, you are taking more of the risk or responsibility on yourself. Because the insurance company won’t have to spend as much on any claims, they lower your overall premium.
If you lower your deductibles, you want to be sure that if you have an accident you could quickly come up with the money to pay your deductible amount. If you can not pay the deductible on your policy without difficulty, you should not raise your deductibles.
#5 Ask For an Account Review
Insurance companies update their rates often. In fact, they are permitted to request rate changes every year. So, what you are paying this year is not a guarantee next year.
Not only do insurance rates change often, your personal situation often changes too! You might have a teenager that you need to add to our policy. Or maybe you have a young adult who you need to take off of your policy. Maybe you were recently married. Maybe you moved homes and live in a different location. All of these changes can impact your auto insurance rates.
Whether you have had personal changes in your life or not, it is always a good idea to set an appointment with your insurance agent to review your account. While it is not necessary to have an account review yearly, you should schedule it every two to three years.
What does an account review look like?
Your account review can be scheduled in-person, over the phone, or through an online technology like Zoom. During your review, your insurance agent will ask you for current information about your automobile, home, and drivers listed on your policy. They will ask you a host of questions so they can find the best rates for you.
Your agent will review the current coverages you have and help you identify any additional coverages you might need. They will also look for any changes you might need to make on your policy.
Lastly, your insurance agent will look for any extra savings you might qualify for. If you are working with an independent insurance agent, they might advise you to keep your policy with your current insurance company or they may suggest switching to another insurance company that they work with.
You might qualify for better rates by switching insurance companies. But because independent insurance agents work with multiple insurance companies, your agent will have several options to present to you. An independent insurance agent will help you find the best products for the best price.
How much can I save from an account review?
Depending on what changes you make to your policy, you might see a savings of between $200-$300. If your rates were recently raised, your agent may help you save even more by finding a different insurance company to write your policy.
How can I start saving right away?
Now that you’ve educated yourself on the top ways to save money on your car insurance, you’re ready to call your insurance agent for an account review. You can make sure that your agent is doing all that they can to help you save money.
When you call your insurance agent, be sure to ask these questions:
- Are my insurance policies bundled? Would I save money if I bundled my policies together?
- What payment plans are available for my policy? How much would I save if I set up an automatic withdrawal? What would the price difference be if I pay in full?
- Does my insurance company offer a low mileage discount? Do they have a mileage tracking program that might help me save money?
- What are my current deductibles? How much would I save if I raised my deductibles?
At Baily Insurance, we pride ourselves in directing our customers to great insurance rates with fantastic insurance companies. But we don’t stop there! We also make sure that your car has the coverage you need to help you if you are in an accident or your vehicle is damaged.
Our personal insurance team is available to help you file your claims and locate resources you might need during a crisis. We value our customers! We are committed to supporting you in all of your personal insurance needs.
If you are looking for an insurance advisor to quote your auto, homeowners, life, or other insurance policies, please reach out to us! We would love to add you to our list of satisfied customers!
