Auto Insurance – A Policy Review Could Yield Big Dividends.

Posted by on Jul 21, 2014 in Frugal For Everyone, Product Information | 30 comments

insuranceMy auto insurance is coming up for renewal in September, which means this is a good time to do a review of my current provider, policy and premium.

It was always my understanding that premiums were based on car model, driving record and type of coverage. While that has a big impact, what happens within the Insurance Company also plays a role. Corporate changes like new upper level management, a new mandate, and/or bigger payouts, can influence what the premiums are going to be. Since this can change from year to year, occasional reviews of not only your policy, but also of the insurance provider, may very well result in better coverage at less cost.

Circumstances change.

Things in our own lives also change and some of these changes can make a big difference to the amount of coverage we need and the premiums we pay. Case in point, before retirement I drove 60,000km a year, on all kinds of roads and in all kinds of weather conditions. Since retirement, between my husband and myself, we drive 8,000km a year, mainly on roads with very little traffic, and never if the weather is bad. Obviously, we don’t need the same kind of coverage and increasing the deductible for collision is a pretty safe gamble, one that will reduce our premium cost.

Comprehensive Coverage.

Comprehensive  protects against fire, theft, vandalism, hail, and windshield damage. In order to increase the deductible on this you need to satisfy yourself there is very little chance that damage from any of those things could happen to your car. Since we drive on gravel roads where there is always a chance a stone could fly up and crack the windshield, it seems risky to increase the deductible, so we won’t.

Comparing Premiums.

There is a tremendous difference in premiums from one company to the other. There are a couple of websites that compare rates and where you can get actual quotes from Insurance Companies.

  • In Canada: http://www.lowestrates.ca/                                                                         In USA:  http://www.lowestrates.com/                                                                     For my small 2009 Mazda pickup, the lowest quote was $65.75/mo. while the highest quote was $231.67/mo. (that is not a misprint)
  • In Canada: http://www.insurancehotline.com/                                                          In USA: http://www.insurancehotline.com/us/                                                           Lowest Quote for my truck: $55.08/mo and highest $75.00/mo.

Customer Service – Claims Processing.

For me, rates are only part of the equation. Service is a big consideration and I’ll gladly pay a bit extra if it means questions, complains or claims will be treated promptly, friendly and courteously. For that, I’ve found some sites that compared Companies and ranked their claims experience and customer service.

  1. For Canada:     https://insureye.com/
  2. For USA:   http://money.msn.com/auto-insurance/best-auto-insurance-companies.aspx

Ways to save.

  1. Billing: Making just the one payment for the full amount instead of monthly payments could save quite a bit. Monthly interest charges can be as high as 3% of the unpaid balance.
  2. Bundling: There are savings to be had by combining car and home insurance.
  3. Discounts: Discounts for having a car alarm or a defensive driving course  may be available and certainly something worth looking into.

It certainly paid off for me to spend an hour or so reviewing policies, coverage and Companies. I found my current provider is no longer listed in the top ten Companies for service or rates, but I did find another Company that is – one that is able to provide me with the coverage I need, the service I want and savings of around $230.00 over the year. That sounds pretty good to me – and it’s simply being frugal.

Talk to you again next week,

Lenie

 Image courtesy of Stuart Miles / FreeDigitalPhotos.net

30 Comments

  1. Interesting decision you have coming up. I just bought insurance when purchasing my car here in Korea. I really didn’t have too many options but it was reasonable enough. The process is much different here and went very quickly. Good to see a sum up of rates you are dealing with back States/Canada-side. Thanks for sharing.

  2. I think too often we get don’t even think about these kinds of things…we know we have coverage and just keep paying the monthly premium and hope we never really need it. I completely agree that service is a huge factor for me. I recently went back to a particular company because the service I received from them was always stellar and the rates were competitive.

  3. My husband is very good at comparing the rates from different companies and finding us the best Insuarnce deals for the cars as well as the home. I tend to let the camparative websites to find me the deals but sometimes you can missout on the extras that a direct contact can give you.

  4. This is on my to do list so your post is right on time. I’m all about saving money as well as getting good service. Thanks for the information. I will be using these sites soon.

  5. My insurance policy will be up in December. I will have to check other companies out to see if I could get a better deal.

  6. This is really good information Lenie. Thanks for including both the Canadian and the US resources!

  7. Good advice. I switcvhed providers recently and may annual cost dropped about $800.

  8. I like your comment about paying the entire year at one time. When you look at some bills you do that with, it does not seem much money, but when you add up all your bills and pay them at once there is a significant savings.

  9. Hi Lenie. This is really useful as we all inevitably need insurance. Thank you for the links to the different sites to compare rates. When I found my policy, it was so much cheaper than the competition. It has been a few years so it definitely wouldn’t hurt to check again. My policy renews in August so this is perfect timing.

  10. Insurance can be very annoying. Our bundled car and house insurance took a big increase because of the fires in AZ this year. We are 5.2 miles from our fire station and you can’t be over 5 miles without paying a premium. Bah, humbug!

  11. I am too frugal in this area as I do not have both car and house insurance. I know I know….I have been pondering both and will definitely sort it out. I am a bean counter. We are frugal by nature.

  12. This is good information. I need to remember to take the time to review my coverage when it comes due again. It’s so easy to just continue paying whatever amount they tell you is due without giving it much thought; especially when it is set up for automatic withdrawal.

  13. Superb post, Lenie. It’s so important to compare rates. My husband always compares rates and there has been huge differences in the quotes. He’s saved us money on a number of occasions, by checking rates and then switching insurance companies (for instance we had a low rate with Geico back in NYC but once we moved to LA, he found a better rate with a different company and then when we got a second car, we switched yet again). Funny!

    Michele

  14. Our full-coverage insurance in NC as nearly twice as much as it is here in ID. I did opt to try Progressive’s car monitor, which meant listening to a beep for six months every time my husband and I used the breaks. Our driving habits didn’t save us more 😉

  15. Very timely Lenie as my premium is due at the end of August. I had always just paid it but I think I will take your advice and do a bit of shopping around.

  16. My husband and I review all our insurance policies – from P&C to health care – every year. He’s in the health care industry side so it definitely is an asset when coming to our auto and home insurance. We were with one company for too long to mention, without giving away my age which I loathe doing! But let me say, after a nightmare of a service with them, we never looked back. So many options to consider.

    Thanks Lenie.

  17. Hi Lenie, I try to review our policies at least once a year to make sure we have the best coverage for our situation. But you are right, Service is a huge factor. Before I would just randomly switch to another insurance company because their rates were lower, I’d check them out to make sure their customer service was up to my expectations.

    • Absolutely Susan – I think having to haggle with the insurance company when settling a claim, when you’re undergoing a great amount of stress anyway,is the worst. That’s why for me – service is a must.
      Lenie

  18. This is excellent advice Lenie. I hadn’t thought much about reviewing my policy until I moved 2 years ago That forced review really opened my eyes! Now I’ll make a practice of checking every few years. I have always paid in full and tried to bundle as much as possible to get the best rates:)

    • Hi Jacquie – A lot of what I shared was stuff I knew but taking the Company’s situation into consideration was a new one for me. Yet, I don’t know why I was surprised, those kind of corporate events always impact the consumer.
      Lenie

  19. Nice to know about insurance policy review. Can’t believe your car can get that big range of insurance quotes.

    • Hi Bindu – wasn’t that wild? I couldn’t believe when I saw that $231.00 quote, that’s why I noted that it wasn’t a misprint. Who would deal with a company that costly.
      Lenie

  20. Lenie- To cut the cost of car insurance in New Jersey, they are trying to make it a no fault state to stop the lawsuits. If you choose no fault your premium will be less. The thing they are finding is the less accidents happen to people over 65 and one needs to check that reduced rate as well.

    • Hi Arleen – Ontario has no-fault insurance but I’m not sure how much difference that makes in premiums. I haven’t compared Ontario to other provinces but I constantly hear rumblings in the news about the high cost of our auto insurance. As far as the age factor, we do get a discount for age. I think the thing to do is just check out all the options.
      Lenie

  21. When it comes to any insurance you have to shop around. Usually you find the best prices with some kind of consumer cooperative that takes pride in giving customers a good deal. If you are not careful with insurance companies you can end up paying far too much in order to pay top executives enormous pay packages at the expense of customers.:-)

    • Hi Catarina – I know some of those consumer cooperatives and they all seem to start out with great intentions but after a while, they all become more of the same. We had one we dropped about ten years ago because in one year they wanted to almost double our premiums. So we’re back to checking premiums and service.
      Lenie

  22. Hi Lenie,
    You’re wise to shop around and save as much as you have.
    It sounds like it could be a Geico commercial.. reaging this blog post could save you up to 15% on your car insurance. 🙂
    In British Columbia, the province controls liability insurance through ICBC. All other aspects are paid separately through insurance brokers.

    Kind Regards,
    Bill

    • Hi Bill – Taking the time to review the policy really does make a difference and why should be pay the Insurance Companies more than necessary. They’re talking in Ontario about changes to Auto Insurance, but like everything else, we’ll see when that happens.
      Lenie

  23. Hi Lenie; this post is different than what I usually hear about insurance rates. I find it interesting that you mentioned knowing your situation and using it to determine your needs. I think most people aren’t as knowledgeable about this. also, I think it is important that you mentioned not only price but service. good post my friend. take care, max

    • Hi Max – I think a little research goes a long way. I do appreciate having Insurance, otherwise we could end up in some horrendous situations, at the same time, I don’t want more coverage than needed or pay more than necessary. And service is a biggie – when I was in the position to provide customer service I went out of my way to ensure customers received the best – now that has changed I insist on receiving the best.
      Lenie

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