You want to save money on your insurance, but it’s often easier said than done. You approach your insurance agent, tell her that you want to pay the lowest premium possible, and she just smiles and nods. While not all agents are out to maximize their commissions at your expense, some agents just don’t know how to save you money. Why? Because they work for one insurer and can only offer one product line. What you need is the flexibility to get what you need at a price you can afford.
Comparison Shop There’s no substitute for shopping around. This simple act can save you thousands of dollars over life of your policy. Thankfully, comparison shopping is pretty simple to do on your own thanks to online quote engines. These software programs will locate quotes from companies authorized to do business in your area and itemize the quotes in an easy-to-read format. From there, it’s a simple matter of signing up with the insurer that you like. Most quote engines can show you up to 20 different company quotes.
Bundle Other Insurance Products Together
Most insurers will offer you a premium discount if you bundle two or more policies together. Why? Because part of the way insurers make money is through something called “premium float.” The “float” is money that is collected from policyholders but is not yet needed to pay claims. This money is invested until it’s needed. The profits made from the investment go toward paying future claims or straight to the company’s bottom line. By bundling policies, you’re providing the insurer with additional investment funds – something they will gladly reward you for.
Get A Broker
Brokers can do research that is difficult or impossible for you to do on your own. If you’ve had problems in the past with speeding tickets, or anything else license-related, a broker will be able to search for companies willing to deal in adverse risk – policyholders that represent higher-than-average risk to the insurer. By doing a sort of “prequalification,” a broker can make sure you get fair treatment by an insurer, find premiums that are affordable with coverage you need to drive on the public roads. In the end, it doesn’t really matter whether you go through experts like BrokerLink or contact someone directly. What matters is that you have an advocate to shop around for you.
Ask About Special Discounts
Insurers almost always offer discounts – even if they don’t advertise it. VIN etching in automotive glass, being an alumni of a local college or university, having good grades as a student driver, being a member of a fraternal or social organization, and having taken a defensive driving class are all easy discount wins. If your vehicle comes equipped with an active alarm system, you’ll get a discount but auto insurers will also offer you discounted premiums if you install an aftermarket unit. So, don’t get discouraged if you drive an older vehicle without an alarm.
Ask About Deductibles
Deductibles can make a huge difference in your premium. In general, low premiums are associated with high deductibles. Conversely, high premiums are associated with low deductibles. Want to save money instantly? Raise your deductible. Just be sure to save some money so you can meet your deductible when you need to file a claim.
John Wilber is a retired insurance broker and grandfather of five. When he’s not visiting with his grand kids, he likes to write about what he learned in the insurance business at BrokerLink in order to help others.