Auto insurance is one of the necessities in life, and unfortunately it can be quite costly. Of course, you could try to skimp by going without insurance, but you risk losing everything. So, since it is your legal obligation to have adequate coverage, you can at least try to minimize the impact on your wallet by shopping around.
Being Complacent Can Cost You
I’ll have to admit, for the past few years I’ve been content with our auto coverage. A few years ago when we purchased our house, we had to shop around for homeowners insurance. When we found a suitable policy for that, we were lured in to moving our auto policy over to them as well so that we could qualify for a multiple policy discount.
At the time, when we ran the numbers and determined that we could save about $170/year on the homeowners by bringing our auto policy over, and even though the auto policy was slightly more expensive, we would still realize a net annual savings of around $80. Granted, that isn’t a whole lot of money, but not only was it a small savings, but we consolidated with one company, which is convenient.
Well, a few years go by and we never bothered to look into our auto insurance as we were happy with the service and coverage, but last week I decided to run a quote on Progressive just for fun, which is who we had prior to switching. To my surprise, the initial quote for our two vehicles came in pretty low. I had assumed it was simply due to a high deductible or lower coverage amounts, which was partially true. It was a quote for a $1,000 deductible whereas we currently had $500. So, I adjusted the policy, and even then, the numbers looked good.
Long story short, after getting the policy to match our current coverage, it looked as if we could save close to $50/month, or $600/year. That is fairly significant, and even though we would lose the multiple policy discount on the homeowners, if we forget the $170 annual savings from that, we’re still up over $400 per year.
Shop Around at Policy Renewal Time
I’m not suggesting that everyone can go run a quote right now and save hundreds of dollars, but it is certainly to your benefit to review your options every six months or so when that policy is ready to renew. The insurance marketplace is constantly evolving, and you may find that there are better deals out there. Sure, it probably isn’t worth the hassle if you are only able to save a few bucks, but you won’t know if you don’t check.
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Filed Under: Insurance
About the Author: Jeremy Vohwinkle is a Chartered Retirement Planning Counselor® and spent a few years working as a financial planner. Today, he helps people make the most of their money by writing about personal finance here and elsewhere on the web. Jeremy is also Coach at Adaptu and a regular contributor for other publications such as Intuit, and American Express. Be sure to follow Jeremy on Twitter or Google+.