Save Money on Car Insurance- Tips from an Agent!

Car insurance is honestly one of my least favorite bills and I am so happy that I only have to pay it twice a year right now. I recently started wondering if I could save any money on my current car insurance rate.

I read a ton of articles and all the information they gave about saving money on car insurance was just really vague and just not helpful. So, I decided to reach out to a friend of mine that is an insurance agent to get some clarification.

Car Insurance just like any other insurance is highly regulated in each state and every company has different guidelines, so always check with your provider and your agent about any specific discounts and money saving measures that will apply to you.

The following information is based on personal experiences and opinions, not every instance is available to everyone in every state.

Common Discounts Available for Car Insurance

So, when I first contacted my friend Nikki about saving money on car insurance, I really wanted to jump right in with some common discounts. These are discounts that many companies offer that you may not know are available.

• Good Driver Discount- the amount of this discount can vary a lot but if you are a good driver without any accidents or tickets, this could be an easy way to save money!
• Bundle Discounts – by combining more than one insurance policy, you can typically get additional discounts. (We bundle homeowners and auto and get a pretty good discount on both versus having separate companies)
• Good Student Discount- full time students under 25 who have a GPA of over 3.0 can typically qualify for some savings.
• Defensive Driving Discount- if you are over 21 and are accident & ticket free you can take a defensive driving class to save money. Look for online classes offered by AARP and myimprov.com to save on the cost of the class (typically about $30 or less). If you take an in-person class at your local DMV it could cost you $100 or more. Each course is good for 3 years once completed and the discount could be as much as 10% off your car insurance!
• Tracking Discount- Recently some companies are now offering a discount for proving that you are a good safe driver with a small device that is put in your car. Some people get weary of this tracking device, but in reality it tracks all the same stuff that can already be tracked on your cell phone. It is only looking at stats about obeying speed limits, typical miles driven, maps of where you drive, etc. This discount is pretty big and can be about 20% off. There are a few companies claim that it can save you up to 40% off, but this is usually only going to apply if you never drive the vehicle.

Now these are just common discounts offered by a lot of companies, so don’t be afraid to speak up and ask your representative about any additional discounts that may be available to you!

Discounts for Paying Monthly vs Yearly

I have read a zillion times where you have to pay your car insurance every 6 months or yearly to get a HUGE discount. But is that true?

Nikki informed me that this is not always the case. Some companies like State Farm do not offer a discount at all for paying the policy in full.

Many others, like Alfa Insurance may not offer a discount but they do charge an installment fee. This installment fee is applied to the bill each month and is around $3.00. By paying your car insurance policy in full you will save about $36 a year.

Now saving $36 a year is a cost reduction, but not nearly as big of a discount as I was hoping it would be.

Some companies like Progressive do offer a paid in full discount when you pay every 6 months or yearly. So definitely compare the monthly price to the full policy price. Also ask about any additional fees for paying monthly.

If saving up for an insurance policy all at once seems difficult, check out our different monthly savings trackers like “Get Lucky! March Savings Challenge-Free Printable“. They are free and easy to print at home!

What Other Insurance can you bundle with Car Insurance?

I already knew that I got a pretty good discount for having my home owners insurance and car insurance with the same company, but what if you don’t own your home?

If you rent your home or apartment, definitely check to see if you can bundle your renters insurance. This is typically a low cost premium but it can get you additional discounts.

Do you have more than one vehicle? My husband and I each had our own car insurance companies when we got married, so I immediately called both companies to check which one had better discounts for a multi-vehicle plan.

Also check to see if your insurance company offers life insurance or health insurance. There are additional discounts that can applied when you use the same company for all of them.

Bundling insurance can save you on average between 5 and 22%, so definitely ask your agent about other services that they offer.

What your Insurance Agent should be telling you!

Nikki shared with me that before she was an insurance agent, she had no clue about her personal insurance policies and what exactly they covered. Whew! I felt so much better when she told me this, because I also felt like insurance was something you had but didn’t know how it worked. Nikki explained to me that she was actually underinsured for a long time and had no idea.

Your insurance agent should take the time to explain to you exactly what your policy covers as well as how much it costs. Now sometimes these conversations can be tough, but your agent works for you, and they need to know exactly how to best serve you.

If your insurance agent is not having a conversation with you about your needs, you may need to start asking them some questions.

Here are some possible questions to ask your agent and have them explain:

1. Liability Coverage – Do I have enough coverage to protect me and my family? There is no point in saving a ton of money on the policy if it isn’t going to be enough coverage when you need it.
2. Is an umbrella policy right for me?
3. Do you offer a mortgage protection plan in the event that I pass away, so my family doesn’t lose their home?
4. What happens if I have an accident? What do I do? What is a typical claim process?
5. What does this policy not cover? (In some cases, regular car insurance will not cover you if you use your vehicle for business related uses like driving for Uber or delivering for DoorDash)

Your insurance agent should be more than happy to go over your policy line for line with you. If at any time you are not understanding something, speak up and ask them to explain it again.

Insurance is extremely important so it is understandable that it may take some time to get it done correctly the first time. Nikki explained to me that she had no idea that she was actually underinsured for a long time.

You don’t want to find out what your insurance doesn’t cover when you are filing a claim. You need to know what exactly you are paying for upfront, before you need the insurance.

Is Company Loyalty Important when it comes to Insurance?

I have seen where people are constantly changing their car insurance every year in order to save money, is this a good idea?

Nikki says that it is always a good idea to call around and make sure that you’re getting a good deal for your insurance but to resist the urge to constantly keep changing companies.

She explained that this is a common misconception about saving money on insurance. This is because at first you may save a little bit every year, but you usually start to notice that the rates tend to go up and stay higher across the board.

Insurance companies actually look at many factors when rating your insurance and how often you change companies is a big one! So, by constantly changing insurance companies to save money, it will actually cost you more money because companies know that you won’t stick around.

Nikki says it is typically best to stay with a company for at least a year, but preferably you will stick around longer.

While it may be tempting to save a few dollars every month by switching companies, make sure that the savings is significant enough and the coverage is comparable before making that decision.

Does your Credit Score impact your Insurance Rates?

Insurance companies don’t actually run your credit to determine your rates. They do look at your Insurance Score.

The Insurance Score is a combination of many things like how often you change companies, how many accidents or tickets you have had, age of the drivers, on time payment history, type of vehicle you drive, and your location (state, city, and county).

The on-time payment history is similar to what is on your credit report, but the rest is more specific to insurance. Just another reason to make sure you are paying all of your bill on time, because it does make a difference!

All of these factors go into deciding what your insurance rates will be, but it also can vary a lot from state to state.

What can you do to lower your Car Insurance Rates?

So we went over all the discounts, and important things to consider, but is there even more you can do to lower your car insurance rates?

Nikki was wonderful enough to give me a list of her best suggestions to keep your rates low:

• Take advantage of any discounts and whenever any changes occur, call your agent to see if any new discounts may apply.
• Even if you don’t own a home, get a small renter’s policy or life insurance policy. It not only gives you more protection, but it usually comes with better discounts too!
• Maintain a good driving record.
• Do not hop from company to company every few months to chase a deal.
• Put your bills on autopay so it is never late.
• Go with a reputable company and one that is easy to get in touch with. There are a lot of online companies that seem to have good rates, but when it is time to file a claim there is no local agent to help you. You can end up spending more money because your claim does not pay out the way you expected it to. It is worth the few extra dollars on the front end to save thousands of dollars out of pocket when you have filed a claim.

Real Advice and Tips from an Insurance Agent

I am the first to admit when I have no clue about something, and insurance in general is just overwhelming to me. I have insurance and thankfully I have never really had to use it, but other than that I am limited in knowledge about insurance.

Insurance agents like Nikki that take the time to answer all your questions and explain the complex web of information are a huge asset to have on your side.

Please call around and speak to a few different agents, until you find one that is actually helpful for your family’s needs. Yes, you can do some research online, but in the end you will probably get a better experience by actually talking to an agent that is educated in all things insurance.

If your located in Georgia, Alabama, or Mississippi, consider looking into Alfa Insurance for Auto, Home, Life, Business, and lots of other insurance options.

If you have more questions about insurance and are located in Georgia, consider contacting my friend Nikki to find out more information!