Money Management

Money at 30: Is it Time You Got New Car Insurance?

It’s that time again — my auto insurance policy is due for renewal. In my younger days, this would be a time filled with stress and panic as I tried to come up with money but, now that my wife and I have our proverbial crap together, this event goes by without a second thought… but is that a good thing? I mean, we did save a ton on insurance by first moving to Springfield and then selling my car a couple of years ago, but I’ve had the same insurer since I was 18 years old. With that in mind, perhaps it’s time for a change.

Any time I turn on the TV it isn’t long before an auto insurance commercial comes on. Some star the funny little gecko, others have the perky girl who will compare rates with other companies for you, and yet others are narrated by the guy from The Office. So, with this abundance of options, where do you start? 

If it’s about time you (like me) started comparing policy prices for auto insurance to see if you could be saving money, here are a few things to keep in mind:

Getting a Comparable Quote

Shopping around for car insurance can be a pain. That said, at least it’s a lot easier than it used to be thanks to the Internet. Still, the trick is to make sure you enter all of your info correctly in order to prevent all that work from being a waste of time.  

First of all, it’s important to be honest when filling out your information. For example, when they ask if you’re been convicted of a DUI or been in an accident in the past few years, it’s not because they’re going to narc on you — it’s because that will factor into your pricing! Besides, they’re going to verifying everything later, so there’s no use in lying and ending up with an artificially low quote (sidenote: it is a good idea to make sure the site you’re on is secure before entering sensitive information like your social security number).

Next, you’ll want to play close attention to what your quote covers. In most cases, it will likely default to a certain amount of coverage that may not match your current policy. That’s why I always find it helpful to pull up my current auto insurance documents and customize my quote to match as closely as possible. Only with this apples-to-apples comparison will you truly be able to decern which insurer is offering a better deal.

Preparing and Getting Your Timing Right

The reason most people don’t bother to seek out a new insurer is that renewing your current policy is a much more passive experience. After all, your new insurance cards probably arrive in the mail weeks before you even have to renew and, if you have autopay on, you may not even realize you’ve started a new policy cycle. However, if you want to try to save money by switching, you’ll want to be aware of when your policy is coming to a close and make a decision before your coverage lapses.

Having a gap in your insurance is a bad idea for a number of reasons. For one, it could lead to disaster if you choose to drive uninsured and end up getting pulled over or, worse yet, get in a wreck. Furthermore, some companies will charge higher premiums to customers who were previously uninsured (of course there’s probably a bit of a grace period to that rule). For these reasons it pays to start your research early and have everything figured out ASAP so that you can transition from one insurer to another without missing a beat.

Other Considerations

Bundles– Often times your auto insurance is part of a multi-part policy that also includes your renters or homeowners insurance with it. Additionally, by having both policies with the same company, you’re likely receiving a discount on each. Keep this in mind when shopping around as 1) the company you’re looking to switch to may not offer these additional products, 2) they may charge more for them, negating the lower car insurance price, or 3) unbundling and buying each individual product from a different insurer might end up being more expensive.

App and Accessibility– These days, the customer experience goes beyond traditional customer service to include how much they’ll allow you to do on your own. At the forefront of this shift are websites and mobile apps that enable customers to view their policy, display documents/insurance cards, and even file a claim quickly and easily 24/7. If this type of accessibility and tech is important to you, you’ll likely want to take your potential new insurer’s app out for a test drive beforehand.

Comparison tools– You’re probably aware of a few auto insurance companies who not only include their own prices in a requested quote but also tack on rates for their competitors. While I can’t personally speak to the accuracy of these sites, it may be worth going straight to the source to verify each rate. And, once again, be sure it’s a true apples-to-apples comparison with your current coverage before getting ready to switch.

New types of insurance– If you’re willing to take a risk and try something new, various insurers now offer different types of insurance that could save you money based on your driving habits. Progressive’s Snapshot or Allstate’s Drivewise are just two driver-based programs that have popped up in recent years. These alternative plans require you to plug a device into your vehicle or use a special app on your phone that will assess your driving. In addition to looking at how often and how far you drive your vehicle, these trackers will look at how often you have to make a hard stop and even what time of night you drive (between midnight at 4 a.m. is considered to be the most dangerous). Because of this, these programs may not be for everyone but may be worth looking into for others.

Payment fees– One somewhat sneaky thing my auto insurer does is charge a $5 fee per payment if you pay monthly (we get around this by paying our six-month policy upfront). These types of fees may not seem like a big deal but could add up over the life of your policy, so be on the lookout when totaling up the final price.

While there are advantages to being loyal to your auto insurer, such as added discounts in addition to the overall familiarity, sometimes it’s time to say “goodbye.” If it’s been awhile since you last compared prices on your policy, it may be worth taking a look around to see if you could save money. Just be sure to seek accurate quotes, mind your timing (A.K.A. don’t lapse!), and look out for discounts/fees that could come into play.

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