By Corrie C This post may contain affiliate links. See disclosure policy linked in my footer.
When your auto and homeowners insurance renews each 6-months or annually, do you really take a look at your policy to see how much your premiums have increased?
It can take some work to compare premiums and switch companies, but it can be worth a lot of money (like thousands annually) when you do search for the best policy/premium - especially if it's been a long time since you've done a comparison.
I typically don't compare unless my insurance rate goes up over a certainpercentageannually, but it's usually worth a huge savings when I do. For example, last summer I was able to bring our auto insurance down from $2,000 annually to about $1,200 annually for the same policy.
How do you find the best rates?
Call your current insurer for their best rates. When I called my current insurance company to cancel, they were able to drop the price about $300. I had already committed to my new insurance company (and the rate was still higher than my new premium), but it might be worth it to try to lower the rate with your current company first.
Go directly to the insurer's website to get a quote(or call an agent). It's best to have your current policy information so that you get a quote on the exact same collision and comprehensive coverage that you currently have (so you can compare apples to apples). Some of these sites include Allstate, State Farm, AAA,Liberty Mutual, Progressive, and Geico.
Use an independent broker to compare rates for you. The last time that I compared our rates, I also called a local broker and asked him to send me some quotes for auto and homeowners insurance. I ended up going with another company, but it was nice to let them do the work for me!
Other general tips for reducing insurance costs:
Consider increasing your deductible amount. You want to make sure that you have money to cover the deductible in your emergency savings fund.
Ask about any membership or alumni discounts. For example, I have a discount through Liberty Mutual through my university.
Consider covering your auto and home under the same company to get multiple policy discounts. For example, my homeowner's insurance is higher with AAAthan with my previous company, but I switched, because the total package was less expensive with both auto and home.
Pay for your entire premium in one payment. If you make monthly payments, you are usually charged a service fee each month. Although it's only a couple of dollars, those couple of dollars add up fast. Instead, set money aside each month, so that you have the money ready when your premium is due. Also, some insurers give discounts if you have your premium automatically deducted from your bank account.
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That is a great post! I wrote one on my organizing blog (www.organizedlifebydesign.com) about improving your financial picture in '09 and looking at your insurance is an easy way to decrease your expenditures!
Reply
Jerralea
We've been getting auto insurance quotes and was really surprised at the difference between companies.
Reply
jamie
You can also try using a broker, who can compare rates for companies you may not have thought of...
Reply
Robert
If only the advertising budgets at many auto insurance companies were a bit lower, we might actually get to spend a few bucks less. Oh well!
I do like calling your current company first to see what they can do to lower your rate. I do this on a lot of services I use (e.g. DirecTV/cable, satellite radio, etc.) as the customer service rep is usually authorized to lower your bill a few bucks to keep you as a customer.
Comparing quotes can give you confidence that you're getting a competitive rate. Most companies offer discounts that can help you save on car insurance.
Both Geico and Progressive offer cheap car insurance to drivers across the country. Geico's rates are typically lower overall, but Progressive tends to offer better prices to high-risk drivers. High-risk drivers are those with a recent DUI, at-fault accident or speeding ticket on their driving record.
Deductibles are the amount of money you have to pay toward a loss before your insurance company starts to pay a claim, according to the terms of your policy. The higher your deductible, the more money you can save on your premiums.
Men tend to have higher premiums because they're more likely to take risks while driving and get into accidents. However, the following states don't allow gender to be used as a factor in determining car insurance rates: California. Hawaii.
A full-coverage policy costs two and a half times more than one with minimum liability coverage only. That's because full coverage typically includes comprehensive and collision insurance. These coverages pay to repair or replace your car if it is damaged.
State Farm is the cheapest large auto insurance company in the nation for good drivers, according to NerdWallet's 2024 analysis of minimum coverage rates. State Farm's average annual rate was $471 or about $39 per month.
In short, no. Insurance pricing factors are myriad, with car insurance companies factoring in a driver's history of infractions and collisions, their credit score, age, gender, location, the type of vehicle insured.
On average, drivers with poor credit pay 118 percent more for full coverage car insurance than those with excellent credit. California, Hawaii, Massachusetts and Michigan prohibit or limit the use of credit as a rating factor in determining auto insurance rates.
The insurer has some of the most affordable rates — our research found that Geico's average rates tend to be 26% cheaper than the national average of $2,508 for good drivers. This is in addition to the savings that drivers can get by participating in the company's discount offerings.
Comparing Allstate vs. Geico, we found that Geico offers cheaper auto insurance on average. We gave Geico 9.1 out of 10.0 points in the cost category in our industry-wide insurance review, while Allstate earned 7.4 points. But Geico doesn't just offer lower rates than Allstate.
Your Progressive rates may increase after six months depending on a number of factors. Like other car insurance providers, Progressive will typically raise your rates if you receive a speeding ticket or moving violation, cause an accident or make comprehensive insurance claims.
Can you negotiate car insurance rates? In short, no. Insurance pricing factors are myriad, with car insurance companies factoring in a driver's history of infractions and collisions, their credit score, age, gender, location, the type of vehicle insured.
Some of the most common factors that influence how much you're paying for insurance are your deductible, the kind of car you drive, driving record, claim history, commute, credit score, history of paying for insurance, your location, age, gender, and add-ons to your policy.
Our cost estimates show that 35-year-old married drivers with good credit and clean driving records pay an average of $144 per month for car insurance. Paying around $100 per month for quality auto coverage is a good deal.
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