Today we’re going to talk about the 10 ways that you can avoid overpaying for your car insurance, if you’re currently looking at Insurance we’re noticing that the rates are raising, we’re seeing an average of 5% or 4-5% across the board, this is just about every state in the U.S almost every company, some states may have had some issues where they didn’t raise the rates during certain times, and now they’re double rating and that’s what you see with some of these articles, you’re noticing that we did several videos on Allstate having up to a 30% or 40% increase, that’s not the end there are a few other companies that are doing the same thing, so let’s take a look at some of the things that we can do to avoid having those rate increases.
1- Know What Coverage You Need
Is to know the coverage that you need, so especially if you’re going to shop you’re going to want to check different companies, and some of the things that a lot of the agents will do, is they don’t realize that when they switch to a different insurance company they may be getting worse coverage, that’s one of the reasons some of those companies are cheaper not always the case because clearly shopping does make a difference every several years for if some companies go up and some go down, it really just depends on who’s where and who’s a good fit for which company, in that case, know the coverages that you’re going to shop for ahead of time, essentially don’t get scammed don’t let an agent just take advantage of you just to get you into their door, it’s not worth it, especially when you file a claim that’s what makes or breaks agencies.
2- Know When You Need Full Coverage:
To avoid paying more for car insurance, you have to know when you need to have full coverage, and full coverage honestly is a made-up word it means comprehensive and collision, and It can add other pieces to it depending on the company you go with, but 99% of the time that’s what we’re talking about, if your car is older you may not need that full coverage option, I’ve had several people that have written across the Decades of insurance that I’ve done that have really wanted full coverage because it felt good to have but in all honesty if they filed a total loss they may have gained a couple hundred dollars it’s just not worth the extra pay to pay for something that you’re not going to use that being said when an economy goes down one of the things we have to be mindful of is the used car market goes up, and right now press Metals certain parts to a vehicle and certain values of cars are almost a third to more than a third higher than they were in the past several years, so the value of your car you may not want to remove the full coverage, but just debate whether the value of that car is worth you paying that extra cost on your policy.
3- Check Your Policy Discounts:
One of the more powerful ways to avoid paying more for car insurance is to check your policy discounts, there’s actually a page with almost every company that you can find that has a discount section on your declarations page, so if you pull out that 50-page packet or most people are paperless now so you grab out your phone, you go to the document section and you go to What’s called the Declarations page or evidence of insurance, otherwise, they may call it your policy but go through it, it should be 50 pages and when you go through there’s a page that lists all of your coverages that’s called your declarations page, and that page also lists the discounts that you are getting on that policy.
4- Try To Keep Bodily Injury Coverage Above 100/300 Limit:
Don’t go below the 100/300 and that essentially stands for a 100000 per person 300000 per accident, that’s your bodily injury limits, if you were to hurt someone that’s how much most people’s insurance will pay, the thing is a lot of people don’t understand is risk is a huge factor, that’s what the whole piece of insurance is, you’re a risk and everything that you do creates different levels of risk, you have a dog there’s a higher risk, you have kids that could be a high risk, not usually you have an older car a newer car has anti-lock brakes doesn’t have anti-lox brakes do you have an alarm system, there’s all these different things do you have tickets do you have accidents so the those are determining your profile or your risk, and one of the things that people don’t realize is coverage is a risk, in almost every state, so when you carry that lower limit, if you go below that 100/300 level, and you shop your insurance, that usually will get you a worse rate in most cases, especially if you’re trying to upgrade that coverage, most people realize at some point that the lower than that is usually not recommended, because they’re opening themselves for a lawsuit, and if that happens and they try to raise that coverage, there’s a risk Gap, and that’s going to cost you more, now don’t worry if that is the case and you pay it, that’s fine but once you renew that policy or re-shop it in the future, now you’ve erased that risk Gap, so you can get out of it, you’re just going to have to deal with the pain of going that next 6 to 12 months with trying to fix it, the same goes the opposite like we talked in level one where people lower your limits, so if you have a higher liability limit, and someone lowers it they’re going to give you kind of a fake discount, it’s giving a lower risk because you’re lowering that risk but when it evens out that following year, it’s going to be a higher risk or a level risk and you’re going to notice a price increase in most cases.
5- Check Your Time With Your Current Carrier Before Shopping:
I actually recommend if you are right on the edge of a certain time frame with your company, you may want to stay longer with the current agent that you have, one if you like the agent then that’s very powerful and you trust them, that’s really big, the other piece is if you can get kind of close to the price you want, but for those of you that are thinking of shopping look at your policy, and look at your Inception date that’s the date that you originally started with them, if you’ve been two and a half years or two years and nine months with a company, you may want to go that extra few months to get to that third year, when you shop your insurance with the higher end carriers or the middle line carriers, they’re going to give a discount for longevity and the longer that you’ve been with the most recent company, they’re going to give you a discount for that, and it starts at three years and it maxes out at five years, so between that three and five year period if you’re right near that border, it may not make sense to switch it because you don’t get that discount back you have to go another three to five years with your new insurance company before the next company is going to give you that deal, if you end up having to shop again.
6- Request an Updated Rating if Your Insurance Score is Better:
If your credit gets better, it makes sense to let your agent know that, now you have to actually request it, but what most agents can do and don’t be surprised if they don’t know what to do it’s very rare that an agent does or is asked this question, but you can always rerun your insurance score, so if you know your insurance rate or your credit has gotten a lot better that’s only a small factor I’ll link the full version of how Insurance scores are calculated if you want to learn more about that, but if you know that your insurance score or your credit has gotten better, then you can have them re-rate your policy to check for better deals.
7- Avoid Small Claims:
If you have a minor claim or your deductible is really high, and you’re going to file that claim but you’re only going to get 100-200 maybe even $500 out of that deal, you may want to think if it’s worth it to have that claim processed, first just pay it out of pocket, I know the insurance guy is trying to get me to pay out of pocket, but hear me out, you have a claim in a state that counts not at fault claims against you or comprehensive claims, not all companies do that even though the state does so you’ll have to talk with your agent to find out for sure, but if that’s the case you’re going to see an increase, let’s just say it’s only 10% not that bad, if I’m paying $200 a month it’s $20 a month more $240 a year extra, Most states do five years so you may be paying if you’re in a three-year State $600 or more and you may be in a five-year State be paying almost a $1000 or more because of that small claim, now you only got a few hundred dollars out of it, but you’re paying over time, now I get it there are some people that just can’t afford either which way it’s just some of the times you have to go that route, I recommend talking to your agent before filing any claims to see what kind of impact that that could or would have on your current policy.
8- Ask About Previous or Pending Rate Changes:
Is very hard to get because I’m not going to lie, most agents don’t know this and I’m fairly know this with most of the companies that we work with, is when you go shopping ask if they’ve had a rate increase recently, expect them to have one because in the next couple years or next few months, you should notice rate increases this is a very common issue in the insurance industry, that this is going to be a on-going piece for the next at least 12 to 18 months, in this case if they haven’t had a rate increase find out if they’re going to have a rate increase, that helps you determine whether or not you should do a six month or a 12-month policy, but if you are going to go that route and you know that there’s a rate increase coming, it may be a perfect time for you to find out what that rate increase will be, it’s good to have the better deal now, but if that goes back to our previous statement where you’re no longer with that old company for three or four years, that could hurt, you so if the agent has the data, it’s always good to check with that, just know agents are usually within the month before it have the rate increases go up so if that’s the case they may not be able to give you that information.
9- Shop With a Rated or Higher Insurance Companies:
It’s a way to avoid overpaying for car insurance is to stick with the ‘’A’’ rated or better companies, honestly I only work with a rated or better and there’s an ‘’A’’ ‘’B’’ and hopefully never below ‘’A’’ ‘’B’’ because now we’ve got problems, what that is? is it’s called an ‘’AM BEST’’ rating, you can go to a company called ambest.com or you can just Google ‘’am best’’ put in the name of the company they’ll give you the rating, what that means is that’s the stability of the company, if the company is an ‘’A+’’ or an ‘’A++’’ those are the different ratings that they can give or even an ‘’A’’ that means they’re stable, they’ve got income, they’ve got money in the bank, that doesn’t mean that they’re necessarily is going to Shell out money for claims, but it tells you that they’re less likely going to have those rate changes, because they do have the ability to sustain some of the lower prices for a longer period of time, now that’s not the end of the research clearly there’s a lot more research you should do just because they have a stability rating that’s good, it doesn’t mean that they don’t focus on profits, so even though your ‘’A’’ and ‘’A++’’ or ‘’A+’’ companies are out there, they may still have those rate increases just because they have shareholders it’s a business, if they have a certain profit margin they’re trying to make, they’ll try to keep it low as long as they can, but it’s just naturally going to come back, if they’re start losing profits to the point, where it starts to disrupt their company.
10- Changes in Rated Household Members:
This reason on how to avoid overpaying for car insurance is know the members of your household, different states have different guidelines but most companies follow this rule, we want All or Nothing is a common rule for most companies, and what that means is we want to know all of the drivers that live in your house because we either want to rate them or we want to exclude them, there are scenarios where you don’t have to do either and obviously if they’re not drivers then it depends on what kind of medical limits that your state requires, most states don’t require one so in most cases you’re okay, other states do so you have to list certain people or a certain number of people on your policy, clearly the number of people you have, the number of drivers could affect it, sometimes it actually goes down so don’t be scared to have a spouse or someone a significant other on the policy as long as they have good insurance, and no major claims so when I say household members, I mean think of the changes this works in the opposite so if you had friends that lived with you or family members that lived with you and they moved out, that risk could be gone and you can remove them from your policy, so if you are currently insuring someone just because they live with you, and they don’t live with you anymore, you’ll probably have to show proof, but as long as you can do that you can remove them from your policy and pay less.
