Insurance

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Tips to Save Money on Insurance

  • Shop around for multiple quotes
    • Get at least three insurance quotes
    • Each insurer has their own pricing algorithm and you can receive vastly different rates from each one
      • You may find some websites that claim certain insurers offer the lowest rates. However, this is not true. Since each insurer has their own pricing algorithm, the least expensive insurer is the one that gives you the lowest quote, not a particular insurer for everyone.
    • When shopping around, make sure to quote all of your policies at once, including auto, home, and any other policies. Many insurers offer a discount if you have multiple policies or multiple vehicles with them.
    • When shopping around, make sure to get a quote for a policy at least seven days into the future. Many insurers offer a discount (between 5%-15%) to customers that get a quote for a future effective policy (rather than a policy effective today) because they find that customers that shop for policies in advance have less claims.
  • Shop around for multiple quotes every year. Insurers change their rates each year and the insurer with the best price for you may change every year.
    • In addition, many insurers offer new business discounts. Try to always stay on a discounted new business rate.
  • Raise your deductible to the highest deductible amount (assuming you can afford an unexpected expense equal to your deductible)
  • Only purchase coverage that you need
    • Get rid of comprehensive and collision insurance on old cars where you don’t care about repairing the car’s cosmetics or the car is not worth much
    • Get rid of rental car coverage if you have multiple cars and can get around without renting a car
  • Take advantage of new car insurance technology
    • Some insurers offer a discount if you allow them to track your driving and they determine you’re a ‘safe driver’
    • Some insurers offer pay-per-mile coverage
      • If you do not drive many miles, pay-per-mile coverage will save you a LOT of money
  • Buy a safe, ‘boring’ car
    • Regular, boring, and safe cars cost less to insure because they are less likely to be driven by reckless drivers, have more safety features, and sometimes can’t even be driven ‘dangerously’ because of how slow the car is.
  • Maintain good insurance rating characteristics
    • Maintain a good credit score (credit scoring is used by many insurers to price your insurance)
    • Don’t get into accidents
    • Maintain high liability limits
      • High liability limits offer coverage to you in case you are sued (you may pay more in premium, but your risk of losing your money is reduced)
      • Some insurers offer discounts to customers with high liability limits (up to a 8% discount)
      • Generally, you pay less per dollar of coverage when you pay for high liability limits
  • Look for discounts
    • Affiliation Discounts (such as a discount for being a member of AAA or a local motorcycle club)
    • Defensive Driver Course (usually for young or old drivers)
    • Good Student Discount
    • Automatic Payment Discount (enroll in auto-debits from your checking account or credit card account)
    • Full-Pay Discount (some insurers offer up to a 3% discount for paying the entire insurance premium up-front)
    • Military Discount
    • 55 and Retired Discount (Allstate offers this discount on their automobile policies)