We completed the first two out of three parts to making sure that we’re getting the best deal we can on our auto insurance: comparing prices and calculating the price with various deductibles. Today we’ll do the final part to make sure that you’re receiving all the discounts for which you qualify.
Insurance companies base their rates on risk analysis studies. They do extensive studies to find out who is more likely and who is less likely to make an auto insurance claim. If you fall into a group that is less likely to make a claim, this will often result in a discount on your insurance rate while if you fall into the more likely group, the chances are that you’re rates will be increased. While you most likely know of the main discounts which are available to you, the risk analysis often turn up areas which aren’t readily obvious. These are some of the discounts that auto insurance companies may offer:
Coordinated Benefits: If you have medical or work loss insurance benefits from your employer, you can choose to coordinate your medical and work loss insurance with your auto insurance. What this basically means is that your primary insurance in these areas is covered by your work policy and the auto insurance in these areas only kicks in when the work policy benefits run out. Since this makes it much more likely that the auto insurance will not have to pay out for medical costs in the event of an accident, coordinating your benefits can dramatically lower your rate.
Drive safely to get a discount
Drive Safely: Many auto insurance companies offer a discount to policyholders who haven’t made an auto insurance claim in the last 3 to 5 years.
Defensive Driving Course: While many think of a defensive driving course as something that driver’s who are young or with poor driving records must take, they can usually be completed by anyone. If taken within the last three years, they will often times will reduce your auto insurance costs.
Drivers Education Training: If someone in your family is young and just beginning to drive, they may qualify for a discount if they have completed a driver’s education training class.
Anti-Theft Device: If your car has certain anti-theft devices, you may qualify for a discount on the comprehensive and electronic equipment portions of your auto insurance. These anti-theft systems usually have to be “passive” meaning that the device arms itself and requires no intervention on your part such as inputting a code each time.
Auto Recovery Device: Any auto recovery devices (often referred to as a Lo-Jack) which activate when your car is stolen may qualify your for a discount. These make it possible for the police to track the location of the vehicle making it much more likely that it will be recovered. If combined with anti-theft devices, it will often lower the comprehensive portion of you auto insurance.
Wear Your Seat Belt: Many auto insurance companies will reduce the cost of the personal protection portion of your insurance if you sign a form stating that you wear your seat belt in compliance with the law when driving your vehicle. If you sign, however, make sure that you always wear your seat belt. If you have an accident while not wearing your seat belt, this can cause a lot of headaches.
Passive Restraint Systems: Passive restraint systems such as airbags or automatic seat belts can lower the bodily injury portion of your auto insurance. Also auto safety equipment like anti-lock brakes will often provide a discount.
Multiple Vehicle Discount: If you have multiple cars and insure them all with the same auto insurance company, you will likely receive a discount for the additional cars.
Wear your seat belt to get a discount
Multiple Product Discount: Most insurance companies are large entities and provide a wide range of other insurance coverage in addition to auto insurance. If you use the same company to insure more than just your cars (for example fire insurance), you’ll usually qualify for a discount.
Policy Renewal Discounts: If you have been with the same auto insurance company for a number of years and have not had any moving violations or at-fault losses during the previous policy period, you may qualify for a renewal discount.
New Business / Transfer Discount: If you were insured with another auto insurance company and are switching to a new company on your own accord, you may qualify for this discount if your driving record has been clean for the last few years.
Senior Citizen Discount: Auto insurance often gets lower with age because the elderly don’t drive as aggressively as those who are younger. If you are 65 years or older, you may qualify for a discount.
Public Transportation / Carpool: If you travel to and from work by public transportation or by carpool instead of driving your own car, you may be entitled to a discount on your auto insurance.
Low Mileage: If the number of miles you drive your car each year is lower than the average, then you will likely qualify for a discount.
Good Student: If a young person on a policy is still in school, their good grades (usually 3.0 or better) can qualify them for an auto insurance discount.
Military Discount: Some auto insurance companies offer discounts to members of the US military and military reserves.
Occupation Discount: Believe it or not, your occupation can tell whether you’re a a high or low risk for auto insurance companies. For example, studies show that engineers have a lower accident risk than average and may qualify for a discount on their auto insurance. Different companies offer discounts for different occupations, so ask specifically which occupations, if any, qualify for a discount.
Professional Organizations & Clubs: Being a member of certain professional organizations such as AAA can mean a discount on your auto insurance.
Improve Your Credit: Your credit matters when it comes to your auto insurance premiums. Why? Because if your credit is good, you are less likely to commit insurance fraud to try and get money. If your credit has recently improved, you may be entitled to a discount on your auto insurance.
Use public transportation to get a discount
What’s important to remember is that although many insurance companies offer discounts for the above mentioned items (and possibly more), they won’t usually offer you the discount unless you specifically ask for it. Since most people don’t even know many of these exist, they don’t know to ask for the discount even when they may qualify.
In the time you have set aside to do today’s Financial Challenge, you should locate your policy book and take the time to read through it to see all the discounts that your auto insurance policy offers. If the book is several years old, call your insurer and request a new one. If you found a quote that was lower than your current auto insurance policy, call them and request a policy book too (the quote was given for basic information you put in – it could actually be lower if you qualify for other discounts that weren’t taken into account when you input your information).
Once you have all the information, you’re ready to lower your auto insurance rate. This information includes a competing quote, knowing how much you want your deductible to be and what other discounts you may qualify for. If you simply want to switch to a new insurance company that gave you a better quote, contact them to arrange a switch. If you like your current insurer, give them a call and explain:
“I have been offered auto insurance from XX company for $XX and I’m considering their offer. I really like your company and that is why I have been with you up until now. Is it possible that you can match their offer so I can remain with you?”
If they can, then there is nothing else to do and you’ve saved money. If they can’t, be sure to ask:
“What is the best price that you can give to me?”
Auto insurance is like any other business. Competition is tough and keeping good customers is far more economical than trying to find new ones. This means your agent will do his or her best to provide low rates to keep you if you look like you may be ready to move to a competitor.
Once you receive the answer from your auto insurer, thank the agent for their time and say you will need some time to think about it. You now have all the offers and pertinent information so you can make a decision that best fits your budget and needs.
NOTE: The entire challenge series is what I would do with my money and is merely my opinion. You should do thorough research and seek professional advice and decide to do what is best for you. My Disclaimer