How to Shop for Auto Insurance the Smart Way

Editor’s Note: This is a guest post from Cole Sileven, Author of Low Insurance and Security, an online resource for comparing insurance quotes online as well as an insurance blog with tips to help shoppers learn more about insurance.

Have you shopped for auto insurance in the last 12 to 24 months? Rating structures are consistently changing which is why comparison shopping is so beneficial if done periodically. Now you’ve probably already heard of all the discounts offered through TV Commercials and radio. I’ve found that some of these discounts can be very helpful while others are not as great as they appear to be. I will expand a bit on these discounts below. I also hope to bring some fresh discount tips which I have found that most Drivers do not know about.

Common Auto Insurance Discounts Reviewed

How about that Multi-Policy Discount?

By combining your home with your auto insurance carrier, Companies may offer up to 15% off your auto insurance premium. If your annual auto insurance premium is several thousand, this could really pay off. However, it’s not uncommon for an auto policy with Company “A” and a homeowner’s policy with company “B” be less expensive than a package policy with Company “C”. For the best bottom line, It helps to ask for three quotes, one package policy, one stand-alone homeowner’s policy and one stand-alone auto policy. If you ask for an Independent Agent to do this you may end up with a package policy with Metlife, a stand-alone homeowner’s policy with Travelers and a stand-alone auto quote with Progressive. Shopping this way can take some time but you may save a couple hundred a year.

Will Multiple Car Discounts Save You Money?

The multi-car discount is given when you insure two or more cars with the same Insurance Company. Now when I started out as an Agent I thought this was always the cheapest way to go with auto insurance, but it isn’t. If you have multiple Drivers this definitely isn’t going to be the best way to go. Once again, Company ‘A’ may have their rating structure set up well for younger drivers while Company ‘B’ may work well with Drivers in their late 60s early 70s. Now if one driver is 20 while the other driver is 80, putting both drivers and both vehicles on the same policy could possibly be much more costly than that of two separate stand-alone auto policies.

Smart Shopping Discounts

Did you know higher limits of liability can increase your “insurance score”? Like a credit score, an insurance score is used by insurance companies to help determine your rate. Liability coverage covers the other Driver in the event you are negligent in an auto accident. While some Drivers opt for the state minimum requirement, others are more concerned about protecting themselves from the loss of assets. These Drivers often opt for much more coverage. A few examples of higher limits of coverage include limits of 100/300/100 or 250/500/100. The first set 250 represents $250,000 of (BI) or bodily injury coverage for each person you may injure in an auto accident. 500 represents $500,000 of total (BI) Bodily Injury coverage for all injuries caused in an auto accident. The last digits represent s coverage for property damage (in thousands).

Now that you know more about this coverage this is how it will affect your quote. During the quote process the company will ask how much prior coverage you have. You will find that all Drivers currently insured will see a lower rate quote compared to those without prior coverage. Also, a Driver who currently has higher limits of coverage will see a lower rate quote while shopping, compared to if he or she had the state minimum liability or lower limits of coverage. In short, the higher your current limits, the better insurance score you will have which will result in a better rate quote.

Make Insurance Shopping an Early Priority

So let’s say it’s early January and your policy expires in early February. You’re tired of the problematic company you’re currently insured with. When is the best time to start shopping? The answer is today. Many companies have what is called a future effective discount. If you pay today for your policy to start next month, there’s a really nice chance you’ll save more. Shopping in advance shows responsibility and guess what, insurance companies love insuring responsible individuals. It will also be assumed that you are not the type of Insured who will be late on payments or lapse a policy. By shopping in advance you get on the companies good side early on.

I hope these auto insurance discounts and tips help you save more on your next auto insurance policy. Whether you’re shopping for a basic liability policy or a policy with higher limits, these tips should help you get the coverage you need at the most competitive price.