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10 Ways to Save on Car Insurance

How to save on your car insurance

Is your teen driver driving you to the poor house? Did your insurance rates take a huge increase with no change in your driving record? It may be time to review your auto policy to make sure you’re not over-paying. Here are 10 tips to keep your auto premiums in tip-top shape.

  1. Check your driving record.

Your driving record can have a big influence on how much you pay for car insurance. When your insurance is quoted, they run two reports: 1) Clue Report, this includes claims data turned into insurance companies, and 2) Motor Vehicle Report, this comes from the DOT and includes information reported by police like violations and accidents. Either report can be inaccurate, so you should re-check for accuracy the driving records of every driver on your policy and record the date and type of incident, including:

  1. Traffic violations
  2. Accidents (both at-fault and not-at-fault accidents such as someone rear-ending you)
  3. Comprehensive claims (like deer strikes, hail, glass damage, vandalism, etc.)

Ask your agent (and anytime you quote new insurance) what incidents affected your rate. You can dispute inaccurate information, but you may need to show proof to get items removed.

  1. Maintain a good driving record

Obviously, if you obey traffic laws and drive safely, you’ll get into fewer accidents and violations. Make safe driving a habit. Consider taking a safe driving course, some companies offer discounts for doing so, but even if they don’t, it has its own rewards.

  1. Participate in telematics programs

Telematics are devices that monitor your driving habits, such as mileage, time of day, fast braking, speed, mobile distraction and others. Insurance companies offer discounts of 5% to as much 50% depending on your driving habits. Find out of the insurance company will raise your rates if your driving habits are unfavorable, some do not. Driving apps that you install on your mobile phone are gaining popularity among carriers as some offer both choices. Since you can monitor your own driving with these devices it is an opportunity to improve your driving habits.

  1. Check insurance before buying your vehicle

Not all vehicles are created equal when it comes to the cost to insure them. Obviously a more expensive car will cost more to insure, but other factors play into it as well. Luxury and less common makes are often more expensive to repair and get parts if they are in an accident. Sportier cars or vehicles that can be used off-road cost more too. Get the VIN of the cars you’re considering and have your agent quote them first.

  1. Maintain good credit

Credit score can have as big of a factor on your rates as your driving record. Pay your bills on time, keep credit card balances low and dispute any discrepancies on your credit report.

  1. Shop your insurance

This is perhaps the biggest key to lower rates and yet many people are reluctant to do it. Perhaps it intimidates people who think they may unwittingly end up with less or inferior overage. Always insist on getting an apples-to-apples quote with your current coverage so you can compare fairly. While many insurance agents sell only one carrier, you can get quotes from multiple carriers from independent agents and brokers. Search for independent agents on Google and ask what carriers they are appointed with. That way you can get competitive quotes from more companies.

  1. Don’t assume advertised insurance companies are any better/cheaper than non-advertised ones.

Advertising is very costly and adds to an insurance company’s overhead. While brand recognition may help instill your confidence, advertising in its self doesn’t make a product any better. Some of the best values in insurance can be with small insurance companies you never heard of before. Also don’t assume a particular brand always has a better rate. All insurance companies have their own rating factors to determine what type of customers get the best rates. The company that was good for your brother-in-law may be a poor choice for you.

  1. Maximize discounts

Some of the biggest discounts include multi-vehicle and multi-policy discounts. Therefore, bundling home and auto insurance with the same company is usually cheaper. Paying your policy in full gives you an additional discount vs. monthly pay. Ask what discounts you are getting now and what other discounts are available, but not currently getting.

  1. Consider increasing your deductibles or reducing coverage on older cars

The lower the deductible, the higher the premium so you will save money by raising your deductibles. If the car is financed be sure to check with your loan company to see if they require a maximum deductible limit. If you have an older car or is worth less than $5K and is paid off, consider dropping comprehensive and collision coverage. A rule of thumb is if your comp and collision coverage costs more than 10x the value of the car, consider reducing coverage.

  1. Go easy on optional coverage

You’ve seen the commercials that advertise “accident forgiveness” or “disappearing deductibles.” What they don’t mention is those options often cost you more and they aren’t necessarily right for you. Watch the cost of rental reimbursement, GAP coverage and roadside assistance to make sure you feel the benefit is worth the extra premium.

Getting your best rates requires some diligence on your part and combined with a little knowledge you’ll get the most for your money. Take control of your insurance today!

 

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Why chose an independent insurance agent?

Why chose an independent insurance agent?

When buying insurance for your car and home, there are three basic sources:

  1. Direct to Consumer
  2. Exclusive/captive Agents
  3. Independent Agents

Direct to Consumer

Insurance companies that sell directly to consumers include: Geico, Esurance, Progressive Direct, The General and others. These companies sell online and via call centers and offer the convenience of extended hours and online access. When buying this way you are probably making a lot of decisions on your own. For example, are state minimum liability limits adequate for you?  What coverage types should you have? Who pays when those limits are exceeded? If you’re making decisions based on paying the lowest price possible, you could be left under-insured or not covered at all. Instead of paying a little more on your premium, you risk paying the rest of your life for one mistake.

Many who buy insurance on their own believe it will save them money because they’re not using a agent. While it’s true that some people can get a cheaper rate like everything else, no one company has the best rates for everyone. Direct carriers may not pay an agent commission (typically 10-15%), however they do have other significant expenses. They pay people to staff their call centers, the website programmers and other overhead. Since there are no insurance agents bringing them customers, direct insurance carriers must pay more to advertise their services to you. Geico for example spent more than $1 billion in advertising in 2013, more than 6% of their premium revenue, according to data collected by SNL Financial. Since online carriers don’t assign you to a specific agent, you’ll talk to a different person every time you call rather than getting personal service from a licensed agent that knows you.

Exclusive/captive Agents

Exclusive or captive agents work for one particular carrier who sets the agenda for their agents as to what products they can sell. These companies such as State Farm, American Family or Allstate are often only sold through their own agents who are contracted or employed by the company. Therefore they generally have less options to offer their customers. If you want to check other carriers for a better rate or get coverage they don’t offer, you will need to find another agent. You may have noticed that many of the big exclusive carriers spend a lot of money on advertising to convince you that their insurance is worth more money.

Independent Agents

Independent are also local agents. However since they are independent from the companies they sell, they are able to offer multiple carriers. More carriers give independent agents access to different types of insurance coverage. This makes it more possible to find all your insurance needs at one local agency.

 

Benefits of an independent insurance agent

 

Since independent agents are not employed by the companies they represent, they are able to offer clients more carriers. Multiple carriers gives the independent agent more options to better fit your needs. For example one carrier may be a better fit for families with young drivers, one might have the best rates for empty-nesters and another may be better for drivers with multiple violations or accidents. And since these carriers have to compete for the independent agent’s business, they know they need to offer more competitive rates. Independent insurance agents are true business owners. Independent agencies are often locally owned and operated by people you have known for many years. Insurance Gurus will quote your auto and home insurance with Progressive, Le Mars, Safeco, AAA, Integrity, State Auto, MetLife, Dairyland, Foremost and others.

Cedar Rapids Insurance Agent – Ed Faber

You have many choices when it comes to finding good insurance coverage. For many people, their insurance decision comes down to trusted relationships. Yes, price is an important factor but when you need to use your insurance, what matters most to you? Is it the (well advertised) insurance company or is it your relationship with your local agent? An independent agent can offer the best of all worlds: personal service, professional advice and a competitive rate. Ed Faber is an independent insurance agent servicing clients in Cedar Rapids and the state of Iowa.

 

 

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