Travis, a regular Free Money Finance reader, left a comment on this site saying he had saved a bundle by shopping around for car insurance. I emailed him and asked if he would share his story with all of us. He was gracious enough to do so -- here's what he had to say.
Have you ever had the feeling that you’re getting screwed but you don’t have proof yet? That’s how I felt about my wife and I’s insurance policies. The thought had been plaguing me for two years, and yet I did nothing about it. I was once mentored by a millionaire who told me that people always want to learn how to get rich, but the first step should be plugging the leaky holes in your bucket. If you get more money, you’ll just lose it twice as fast as you did before unless you plug the areas where you’re losing money now. And one major area is home and auto insurance. I “knew” this and yet did nothing for two years. I hope this helps you see that the secret in getting rich is not in the “how to”, it’s in the “to” (the actual doing). I just recently got married so changing insurance was on the endless list of things to do, so I explored my intuitive feeling, of being screwed, and here is what happened:
1.) I got out the phone book and called around to all the insurance companies in the area who’s names I recognized (Geico, Allstate, Farmers, Progressive, etc. etc.). Geico had the lowest quote.
2.) I called our current carriers, Statefarm for me, and Farmers for my wife. Explained that we had a lower quote and wanted to see if they could match it (I’ve been with Statefarm for 16 years, talk about loyal). No luck, they couldn’t match it, and to be honest they didn’t even seem to care one bit that I was thinking about leaving. They were very short with me.
3.) I was ready to call Geico and guess what, a had another intuitive feeling that there was more to do so I did a quick Google search for “how to save on home and auto insurance”, searched all of my favorite blogs, and somewhere I found a link to this site. I went there and grudgingly filled in all of my information (I hate filling out online forms). It printed out a sheet of matches for insurance carriers, and said that they would contact me.
4.) About four of the eight contacted me within a day or two and a small local company had the lowest quote. It was a company that I had never heard of before. The name of the company was merely the owner’s last name. His quote was so darn low, I became skeptical. He explained that since he is not under one carrier anymore (Allstate) he can now shop around to different carriers and get the best deal for his customers. We settled on a quote from Safeco.
5.) Because of my skepticism I went to www.bbbonline.org and did a Better Business Bureau search for his company, no complaints (I forgot to check our local chamber of commerce).
6.) I went to https://www.naic.org/cis/index.do to see if the insurance company (Safeco) had any complaints.
7.) I went to https://www3.ambest.com/ratings/default.asp to check out the rating of the insurance company (Safeco). (a shortcut to steps 5-7 is to simply ask the sales agent to send you the information that you want)
8.) I checked out an unusual but helpful site https://www.badfaithinsurance.org/. This is a site that my former millionaire mentor uses.
9.) I called the sales agent back and signed up. I went in to meet him, talked about life, family, and got to know him. I paid for a year up front (it’s cheaper that way).
Oh, and in case you’re wondering the coverage’s are higher than we had before. This was about an hour and a half of work spread out over a week, 10-15 minutes a day. Our deductibles are $1,000 for house and car. I drive a 1989 Honda Accord (my focus is now on riches not reputation). My wife drives a 2005 Suzuki Forenza (she’s jumped on board too).
- 1989 Honda $176.42 every six months
- 2005 Suzuki $642.80 every six months
- Homeowners $542.75 for the year
- 1989 Honda $77.40 every six months
- 2005 Suzuki $192.60 every six months
- Homeowners $355 for the year
Yearly Savings: $1286.19 or $107 a month that will now go to paying off debt and then to some kind of investment (mutual fund, index fund, ETF, Stock, etc. etc.)
TIPS THAT I PICKED UP ON WHILE SEARCHING FOR CAR INSURANCE
1.) Get a pen and paper and write all of your quotes on the SAME piece of paper. (I used to just grab whatever was near me to write on)
2.) Every time you get a quote ask the sales agent what discounts you qualified for. WRITE THEM DOWN, on the same piece of paper! They will come in handy.
3.) Each new quote you get, ask the sales agent if you qualify for the following discounts: (the ones you wrote down in step 2). If you keep doing this you will notice that some insurance agents don’t automatically apply all of the discounts that you qualify for when they quote you. You have to be proactive.
4.) My credit score is lower than my wife’s and my lovely banker gave me a secret that has saved us thousands of dollars. Whoever has the better credit put them as the applicant and the lower credit person as the co-applicant. Even though I was on the application they used my wife’s credit score and hers only. My new insurance agent said insurance works the exact same way. So…whoever has the best credit ask the agent to quote you using their name and social. The bad credit person I believe will just be a co-driver. I’m not sure how it works with insurance but I did ask him to run the quotes both ways with me first, then my wife first, and as we expected the quote came back less with her name first (because of her good credit).
5.) I also noticed that on his quote he had the policy effective date about 3 weeks out. I asked him why and he explained that it’s a little insurance trick. He said that with some insurance carriers if you quote the insurance far ahead in the future it triggers another discount. Something along the lines of, you are reward for shopping around early instead of waiting to the last minute and shopping for insurance the day your policy is about to expire.
6.) Have a conversation with the sales agent. Ask them do they enjoy their job, does their family carry the insurance that they are quoting you. Just get to know them. A friend will try to save you money before a stranger will. You’ll be surprised how much “insider information” they will share with you once they get to know you.