The following information is not advice, it’s just my thoughts and opinions. I’m just a girl on the web, not currently licensed in insurance or anything else in any state. You should absolutely seek the counsel of an insurance agent licensed in your state before taking any action at all. Coverages and programs discussed may or may not be available in your state.
I read an interesting article over at Single Guy Money about Auto Insurance. He has some great tips about making sure we’re getting all of the discounts we’re entitled to, and encouraging us to shop around for the best rates.
As a retired insurance agent, I thought I’d give my perspective. In fact, I’d been meaning to do a series on different insurance topics, but I’ve been more interested lately in talking about things like politics, conserving water and my husband’s new computer. But I digress.
This is the first installment of that three part series.
Before we shop around for auto insurance we should make sure we are being charged correctly for our current policy. We want to make sure that our current insurer is rating us correctly, both in our usage of the vehicle and the discounts we’re getting. So, let’s pull out our Declarations Page, call or visit our current insurance agent and ask the following questions:
1. What are my current coverages? Sometimes Declarations Pages aren’t so easy to understand. We not only want to know which coverages we have, we want to know what they do for us.
2. Are any of these coverages possible duplications of coverage I have elsewhere? Although they can’t really answer this question for you, they can help you figure out if you do. Do you have AAA? Then you may not need their coverage. Or their coverage may better suit your need. Have excellent, broad health insurance? Perhaps you don’t need Medical Payments coverage, or perhaps you should keep it if you often transport your friend who has none. Don’t work? Then you might not need the lost wages coverage under your Personal Injury Protection.
3. How do you show me using the vehicle? Is it rated as going to and from work, or for pleasure driving only? Most insurers only ask about your usage of the vehicle when you first take out the policy, so if you’ve had a change in your circumstances (changed jobs, stopped working) then chances are you’re not being rated correctly. Realize, though, that they could be undercharging just as easily as overcharging you.
4. What are my current discounts? Every company has their own discount programs. These discounts are applied after they’ve already given us the base rate. We need to ask them about all of the discounts they offer, and how we qualify. Some common discounts are:
- Multiple Policy – having more than one car insured with the same company
- Multiple Line – having more than one type (auto and homeowners, for example) insurance with the same company
- Accident Free – not having a claim for a specified period of time with that company
- Good Student – typically a 3.0 or higher GPA, usually as a full time student, and only up to a certain age
- Vehicle Discounts – Airbags, alarms, VIN etching
- Defensive Driving Discount – voluntarily taking a defensive driving class
- Age-based discounts – Over 50 , single head of household (my company rated young single parents that lived on their own as if they were over 30 – a huge savings)
Now that we know our policy is rated correctly, let’s get quotes to make some changes. We may or may not make any changes, but let’s make sure we’re getting the most bang for our insurance buck.
1. Get quotes to raise deductibles on any coverage that has one. Find out how much can be saved by going to the next highest deductible. For example, if the current policy has a $250 deductible for Collision, get quotes for $500, and perhaps even $1000. Then weigh the savings against our ability to pay more out of pocket and our risk tolerance. I know lots of people who take high deductibles on everything, take the savings and put it in the bank in a “deductible fund” so the money is there if needed.
2.Get quotes for more and less Bodily Injury and Property Damage liability coverages. Get quotes for at least one step up and one step down from where we are now. For example, if the current liability limits are 50, 000 per person/100,000 per accident get quotes for 25,000/50,000 and 100,000/300,000. If we can double our coverage for, say, $50 more per year – and we have assets enough that we could use that additional protection, would that be worth it?
Okay. Now we’re ready to talk to other insurance companies. That’s the subject of Part 2 of the series, so look for it soon!