How To Save Money On Car Insurance

August 22, 2018

Has your auto insurance been going up and up despite no new claims or changes to your situation? This is common, and a great reason to shop around for new insurance. The last time I went through this process, I did end up finding a new company to insure my vehicles, but not without learning a few things along the way. If you’re in the market for car insurance, here are some things you should know:

Always compare apples to apples

Any insurance company can “save you 15% or more on car insurance” just by changing the amount of coverage or the deductible, so review your current policy’s declarations page and be sure you have the right level of coverage before shopping around.

If you have an existing relationship with an insurance broker, ask them to review your policy. You may also want to ask friends or family what they are paying. I prefer to use online resources such lowermybills.com or insure.com to do my comparison shopping.

Since the rates quoted online were comparable to the rates quoted by a local agent, I decided to work with the agent. That way, if I should ever have to file a claim, I will have a name and a face I can hold accountable.

See if your current policy has a fee for discontinuance

Once you find the policy with the best value for your preferred level of coverage, check with your existing policy issuer to make sure there are no fees for cancellation. I learned this the hard way when I procrastinated buying new insurance and found out that my previous insurer charged a fee when canceling during the policy year. Had I made the switch three weeks earlier—at the time of renewal—I would have been spared the 17% cancellation fee.

Not all insurers have this fee, so if yours does and you are looking to make a switch, wait until the policy is up for renewal. Needless to say my new insurer does not have this fee.

Bundle to save (if you can)

The policy I ended up with will save me around $20 a month, but it could have saved me more. Most insurance companies offer a multi-policy discount on their auto insurance policies when you carry another form of insurance, such as a homeowner’s or renter’s policy.

It’s worth noting that some insurance companies will require you to be claim free for a certain period of time before they are willing to underwrite a policy. Because I had made a claim on my homeowner’s insurance policy about a year before, my new auto insurance carrier was unwilling to underwrite my homeowner’s policy for at least another two years.

Saving on roadside assistance

On a final note, if you have roadside assistance through a travel club such as AAA, you may want to see what kind of roadside assistance is available through your insurance company. Sure, they may not have flashy bumper stickers or give you a 10% discount when you check in to a hotel, but if all you really need is a tow truck in case of a breakdown, your auto policy may be able to provide you this service at a fraction of the cost.

I’m not saying the cheapest policy is always the best, but all things being equal, saving $20 to $30 a month in car insurance adds up. And besides, it’s your money! I’m sure you can find some better uses for it.