Today in Money Matters I’m going over getting good Auto Insurance.
It seems like everytime you turn on the TV you see an ad that says Insurance Company A can save you $500 on average than Company B. Then Company B says they can save you $500 on average over Company C. Then Company C comes on and says they’ll save you $500 over Company A. It’s a big confusing circle. How do you navigate it?
Remember: You are Just a Number
To an insurance company you are just a number and that number is the potential risk you are to the company. There are all types of risk factors and they are weighed differently by different companies. These factors aren’t just how many tickets or accidents you have. They also consider how old you are, how old your car is and how far you drive on average each day. There are some factors that don’t even take driving into consideration, like your occupation.
There’s More to it Than Price
You don’t always want to go with the cheapest plan. Most states only require liability coverage but you will probably need more coverage than that. If you are getting a rock bottom price, be sure it isn’t just for basic coverage.
Also, be sure you do a side-by-side comparison. When you go to the grocery store you probably look at the price per ounce portion of the price sticker. Often times you’ll find an item that is cheaper but it’s competitor, while slightly higher, is cheaper per ounce. Auto insurance is the same way. Make sure two equally priced plans really are equal. If all the terms are Greek to you, go HERE to better understand coverages.
If you find more than one plan that seems reasonably priced and is a good fit for you, research to see which insurer has the best record for claims service and financial stability. An A rating (or higher) from Standard & Poor’s or a AA ranking (or higher) from Moody’s is a good indicator of financial strength.
What is the Worst They Can Say
Auto insurance is a very competitive industry. Be honest and tell the company you are shopping around. If Company A comes in higher than Company B, tell them. Ask for a discount. Tell them the price Company B quoted you. They very well may beat the price or offer you some kind of discount. Then you can call Company B and tell them Company A beat their price, and ask if they would be able to come down any lower. The worst they can say is no.
However, be sure BEFORE you sign the paperwork that the new discounted rate includes all the features that you started out with. You don’t want to get stuck in a bait and switch situation. Also, for more tips on maximizing savings, go HERE.
Longevetity Isn’t Always Key
For people in my generation, many of our parents worked at the same job for 20 years. They buy their cars from the same dealership their parents did. And they use the same insurance they have for years and years because they have a personal relationship with the agent. Remember, it’s not personal. It’s business.
Be sure you shop around every couple of years to be sure you are getting the best rate and the best plan for your needs. Your situation will change and you may find a better option elsewhere. Your kids will start driving, You may have an accident. Anytime something happens that affects your rick factors means you could get a better deal elsewhere.
If you haven’t priced around in while, try doing it soon. Most companies have operators ready 7 days a week so you can add it to the Saturday to-do list.
Happy (and Safe) Driving!
Shellie loves to share her frugal living tips as well as deals and bargains to help you get more with less. A spender at heart, she balances her frugal lifestyle with the occassional splurge. 
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I once told Progressive what Geico quoted me. The operator told me… and I quote:
“I guess you should sign up with Geico then.”
I laughed at that all day.
When we bought our home I got quotes from several companies and found that our state Farm Bureau beat everyone out by a large margin. When I asked about it, the agent told me that by getting coverage through a state-specific agency ( in my case, Texas) the only thing aside from my personal stuff that affects my rate is what happens in my state. When everyone else had to raise rates because of hurricane katrina, the local companies weren’t affected.
I was also surprised that many “farm” insurance companies offer coverage to city dwellers like me as well. Just a helpful hint I thought I’d pass along – and yes, the coverage is identical to that quoted by other bigger companies. :-)
Ps that reads like I said “state farm bureau”… I’m not talking about “state farm”. I meant the farm bureau respective to your personal state. (for me it is Texas Farm Bureau)
Thanks so much to Laura for the Farm Bureau sugestion. I also live in Texas and I am in the process of checking both Auto and Home and so far the Auto was much lower from them than any others. I never knew about this option.
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