Tuesday, May 29, 2012

Getting the best deal on your car insurance

Perhaps you can't see it very well, but our car currently has
 a large dent in the driver's door. It was hit while parked, in
a parking lot. Now we have to do the legwork to get it fixed.
There are many ways, I could write about, to save you a few dollars here and there. But this could be the biggest saver I'll write about this season.

Are you getting the best deal on your car insurance? You are now probably thinking I'm going to suggest that you shop around for a less expensive insurance company. But if you are otherwise satisfied with your current company, wouldn't it be better to negotiate a better rate with them? And no. I'm not talking about haggling with your agent. I'm talking about asking a few simple questions.

When was the last time you discussed your policy with your insurance agent? We should be calling in and asking about possible discounts once a year. But we don't. Why? In part because we're busy people. But also, because it feels awkward to tell the agent that we are interested in saving money. As if we're admitting some deficiency in ourselves, for wanting to save some money.  Big corporations don't feel awkward when they want to shave a bit off their expenses. And we shouldn't either.

Now I know you have some questions for me. Like. . .

How will I benefit from calling my agent?

For one, it will clue the agent into the knowledge that you are looking for ways to trim costs. If they know that, they will make suggestions to you which can put money into your pocket.

What do I say or ask?

You simply say that you're calling to see if there are any additional discounts you might qualify for.

A good opener, if your car has an anti-theft device installed is "Is there a discount for anti-theft devices?" These devices generally earn you a discount. Your agent may not know if you have one.

Do you have more than one car with this insurer? If you do, ask your agent, "Do I qualify for the multi-car discount?"

Next ask about going paperless. Say, "I'm interested in going paperless and automating my premium payments. Will this earn me any savings?" This one seems unbelievable to me. . . they provide you with the service of taking care of your payment (you won't lose the bill in the stack on the desk, or forget to mail it, or not have a stamp handy), and they give you a discount on top of the service.  What's more, some companies will allow you to have your automated payments charged to your Visa card, which may earn you reward points or rebates.

There are driving courses that will earn discounts. If you are a senior, AARP offers defensive driving courses for a small fee.  Ask your insurer, "I'm looking into taking a defensive driving course through AARP (or the community center, or parks and rec, where ever you find a course). Do you provide discounts for seniors who take these courses?"

If you have a teen learning how to drive, have them take a driver's training course.  You'll save quite a bit in premiums by doing so.  Make sure to ask your agent, "my teen is taking a driver's training course. When she/he gets her/his license, how much will this save on my premium?"

Also for parents of teens, if they're good students, ask "Do you give a good student discount?" In most cases, you'll need to fax a copy of their transcript. But this will earn a continuing discount for years to come.

Do you own a home? And is your home owner's insurance with this agent? If so, ask "Am I getting the auto/home discount?" Insurers like to keep you as clients for all your insurance policies, hence the auto/home discount.

Your credit score can impact your premium, as well. Ask, "Has your company done a credit check on me recently? Can you tell me if my score has affected my premium?" If your credit score has caused your premium to go up, you are entitled to one free credit report (and I think this is one free with each reporting firm, someone check me if I'm wrong here).  Go over that report, and call the credit reporting bureau for questions as to what all the info means (I thought it was confusing to read myself, but this was 10 years ago).  Take the appropriate action to remedy your report and boost your score. If you've found an error, you can bring this information to your insurance company and get your premium back to where it should be.  This whole deal with using your credit report to determine who's the greatest risk for a claim, does not seem fair, but it's a practice common these days.

Do you have a car sitting in storage right now? Many retirees go south for the winter and north for the summer.  And some keep cars at both ends. If their car is in long-term storage for half the year, they can drop a portion (but not all) of their coverage. Ask, "how many months must be car be in storage for me to temporarily drop a portion of my coverage?" Another scenario, you may have is an elderly relative, who still owns a car, but no longer drives.  Many elderly don't want to get rid of their cars, even when they're not driving any longer.  I think the thought of selling their cars make them feel even more dependent and helpless.  Not something any of us want to feel. But, if their car is not being driven at all, you can ask their insurance, on their behalf, for reductions in coverage due to the car not being used.

Next, this is not about discounts per say, but could save you a bundle over the long-term. Ask about increasing your deductible. Of course you need to feel confident that you will be able to come up with the out-of-pocket money to cover that deductible, should you need to file a claim. But if you feel confident about your ability to do that, you could save quite a bit in just a few years. So, ask, "how much will I save on my premium each year if I raise my deductible up to the next level?"

When we were first starting out, with our first cars, many of us were more at risk for accidents, simply because of our age and inexperience, and we didn't have the additional cash on hand to handle a high deductible.  This made a low deductible the best choice for us at the time. As we've gotten older (and hopefully better drivers, too), we have a bit more spare dough, so a higher deductible is feasible.

And now you likely have one last question.
But I just paid my premium, shouldn't I wait until the next one is due?

Absolutely not. Make the call today and say "I know I just paid my premium, but I'm working at reducing some of my spending. Are there some discounts that I might qualify for that I'm not already receiving? And how much will I save if I raise my deductible?" (Same questions as before, just in this scenario, you preface your questions with acknowledging that you've just recently paid your bill. )

This is a call today! sort of thing.  Put it on your to-do-immediately list. You may save a hundred or more over the course of a year on your car insurance. Go out to your car. Get that slip of paper that says proof of insurance (you're supposed to keep that in the glove box, it is in there, right?). On that paper should be your agent's phone number. Give him/her a call. And begin reading off the questions above. What could you lose?

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