Yesterday was my birthday, and also the day that my 16 year old son got his driver’s license. That meant that I had to add him to my car insurance. When I called my agent, who I have used for years, except for one 6 month period where I found cheaper insurance elsewhere, she told me that because he has good grades (3.0 GPA), he would get a discount. Instead of being $135 more per month, it would only be $95 more per month. Whoa! That’s a lot of money. I immediately began shopping around. This post is about how to save money on insurance, which I ended up doing after a lot of time and energy.
Shop Around
When I say I shopped around, I mean it. I went to the website of every car insurance company I could think of and tediously put in all our information to request a quote. Then I went to all the ones that showed up on my Facebook feed and did the same thing. Most of the quotes came back in the same ballpark as my original company. Some services where they have you input your information and it is supposed to automatically compare multiple company quotes didn’t really work. Some ended up only giving me a list of websites to go to. Others ended up wanting me to call them. Who has time for that?
Compare Coverage Side by Side
What is important to do is to make sure you are comparing apples to apples, so to speak. By that I mean making sure you are asking for a quote that includes the exact same coverage as the one you are comparing it to. Otherwise, you could end up buying less than, or more than, you actually want or need. Insurance has to meet your state minimum, but it also needs to provide for the reason you are purchasing it-enough coverage in case of catastrophe. The last thing you want when you get into an accident is to find out that that cheap insurance you bought didn’t cover what you thought it did. You could end up on the hook for a ton of money in damages. Often, you will see advertisements saying things like, “pay $3 per day for car insurance” that sound initially very enticing. Read the fine print before you buy, though, because often they are lacking what you really want in your insurance. You have to decide what amounts and types of coverage you really need or want, and then compare the prices for those coverages side by side.
Buy Direct if Possible
Another thing to know is that many websites you run across for insurance are actually insurance agents or affiliates. What that means is that if you purchase through them, they will be earning a percentage of your premium. That can also mean that you pay more than you would if you bought directly from the company. Always compare, compare, compare before you buy. That was how I ended up saving myself tons of money. I ended up buying directly from an insurance company online. I combined my auto and home insurance, which is a common way to earn a discount. The interesting thing about this one was that my home insurance itself is about $150 more per year now, but because the auto insurance saved me about $1,000 per year, I still came out way ahead. If you are looking at combined offers like this, you have to be able to look at the bigger picture to see how your wallet will be affected overall. If I had given up just because the home insurance quote was a little higher, I would have ended up paying so much more than necessary between the two.
It took me two full days of shopping, but in the end I ended up getting the coverage I need for a fraction of the price. I feel like it was time well spent. There is nothing as satisfying to me as knowing that I did my research and got the best deal for my money.
Take Aways
Make sure you take the time to really compare different companies when looking for insurance. Try going to the company’s direct website first.
Choose your coverage wisely. You want enough insurance to cover a devastating event, but you don’t want coverage you don’t need. When comparing companies’ quotes, make sure their coverages match so you are comparing like to like.
Don’t stick with one company out of sheer, blind loyalty. It is a good idea to check around every 6 to 12 months to make sure you are not overpaying.
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