When it comes to car insurance, we have all seen the numerous commercials and advertisements where insurance companies try to lure you in with the promise of low rates and multiple discounts. It is important to know that not all insurance companies are created equal. Simply put, they do not all offer the same discounts and they do not all determine your premiums the same way. Here are some tips that may help you save money on your car insurance.
1. Ask your prospective insurance company about what they consider a ‘claim’.
In other words, when shopping around, it is important to know that every insurance company has different guidelines they use when determining what types of incidents will affect your rates. For example, some insurance companies will only count an auto claim against you if the incident was determined to be your fault. Any not-at-fault accidents or comprehensive losses (such as hitting an animal, weather related events or claims involving falling objects like trees) will also not count against you.
However, it is very important to note that more and more insurance companies are considering absolutely any claim to be a chargeable incident. It is crucial to know the particular underwriting guidelines your company uses in this regard because you do not want to be charged more for car insurance simply because you were the victim of an incident beyond your control, like striking a deer or being caught in a hail storm.
2. Ask about bundling.
Nowadays, most people have more than one insurance policy. Many households have a car insurance policy, a homeowners/renters insurance policy and maybe even a specialty insurance policy for their recreational vehicles such as motorcycles, snowmobiles or even motor homes. Not all companies offer a discount if you have more than one policy with them, but many do. When getting a quote for auto insurance, be sure to tell the representative about any other insurance policies you have and see if they can offer you a better rate if you purchase more than one type of policy from them.
3. Ask for discounts.
Lots of them. Know what discounts competing insurance carriers are offering and leverage that knowledge when speaking to the insurance company. Some insurance companies have a standard policy that certain discounts may only be available for new customers for their first policy term, such as a one time discount for enrolling in paperless billing. Other times, insurance companies may come out with new discounts which are usually reserved for new customers. Knowing what’s available and not being afraid to ask for an additional discount gives you more of a chance of getting a more affordable rate. Remember, you catch more flies with honey, so be nice to your insurance representative. Be up front if you are thinking of switching companies and call your company first to give them to opportunity to lower your rate to possibly match that of their competition. Believe it or not, there is sometimes flexibility here if you get the right person on the phone in policy services.
Taking your time when shopping around for car insurance and doing your research to ensure you lock in the best rate possible can save you hundreds and sometimes thousands of dollars each year. Different companies offer different incentives to their customer and they are all vying for the same pool of business so leverage your resources when possible.
Also remember that insurance companies are always adjusting their rates based on their assessment of risk and past financial performance. Therefore, just because an insurance company gave you a high quote this year does not mean their rates will be the same next year. In fact, most companies change their premiums every year on existing customers. If you’ve stayed with the same insurance company for several renewal periods, you may have noticed how your rates slowly creep up a few dollars every time you are due to renew, even if you haven’t made any claims. Now you know why. As painstaking as it can be to shop around for car insurance every couple of years, it is a good idea in order to ensure you are getting the most competitive rates possible.