Frugal Car Insurance

I think I mentioned earlier this month how our Progressive car insurance renews next month and they sent the billing notice. I was surprised to see the premium for 6 months to insure our Camry and Explorer was over a hundred dollars more at $742. We've been with Progressive for all our mobile insurance since they have the best rates for motorcycles and boats, we decided to give them our car business too.

 

But not this time. When we called for an explanation, they didn't have one. We hadn't had any claims, and didn't move or anything so there was no justification for it. So we shopped around and found out that State Farm actually had the same level of insurance for the same rate we currently pay $637 for 6 months. In the past we have boycotted State Farm even though they have had our homeowners insurance for 15 years, because they raised rates so much and threatened to leave Florida. We never got dumped by them, even though our neighbors did.

 

So we sign up the cars with State Farm and paid for 1/2 the premium and have the start date of the policy for the middle of next month. Imagine our surprise when we got the billing notice for the 2nd 1/2 to be due 11 days after the policy starts. WTH! So when we had the vehicles inspected, we asked them what the deal is with the billing. Well it turns out they want the 2nd half just 30 days after the first payment. It doesn't matter if the first payment is way earlier than the policy starts. We asked to talk to corporate and it was very easy to change the billing so that its due 30 days after the policy starts, rather than 11 days after. It wasn't a big deal to us, but we questioned why offer to let the customer make 1/2 due now, 1/2 due later when there really wasn't a "later". It was the principle of the thing. Of course they have already charged the credit card for the first half of premium, even though the policy doesn't start for over 20 days. We suggested them give us our money back and we would pay them next month when it was due, but they didn't like that, they would rather change the second 1/2 payment due date.

 

Anyway, lesson learned. Don't pay your car insurance early, they take your money right away even though they don't give you services right away. Needless to say, it was not a very good first impression.

How to Save on Car Insurance

Yesterday we got our renewal notice that our car insurance is due again for the next 6 months, and to my amazement it had gone up $100 since last renewal six months ago. I checked back to the renewal a year ago and it had only increased $6 from the previous period. So why did it increase now? We haven't moved, haven't changed anything - same cars, same driving status, same address, no claims and yet it increased $100.

 

So DH who used to be an insurance agent, called and talked to the company to find out why our rates increased. They said it was due to Florida rates increasing, so supposedly everyone will get higher rates. Florida has more uninsured drivers than most states and the problem is expected to get worse, according to a study released by an independent research group.

The study by the Insurance Research Council says the recession will likely trigger a sharp increase in the number of uninsured motorists. The study estimates that one in six U.S. drivers will be uninsured in 2010. "An increase in the number of uninsured motorists is an unfortunate consequence of the economic downturn and illustrates how virtually everyone is affected by recent economic developments," Elizabeth Sprinkel, senior vice president of the IRC, said in a news release.
Florida had the fifth highest uninsured driver estimate at 23 percent, according to the study. The four states with higher estimates were: New Mexico, 29 percent; Mississippi, 28 percent; Alabama, 26 percent; and Oklahoma, 24 percent. The study found that the number of uninsured motorists was indelibly linked to each state's unemployment rate. Based on unemployment rate projections, researchers estimated that the number of uninsured motorists in the United States will increase from 13.8 percent in 2007 to 16.1 percent in 2010. It is estimated that only 50% of drivers in Florida have inadequate insurance or none.
So back to our story, we have good coverage with all the high amounts of liability, uninsured and bodily injury. But do we need it? Our truck is 12 years old, and our Camry is 6 years old. Why does the truck cost more to insure than the newer Camry? All of these answers elude me and the insurance representative was no help either. Anyway, here's how we try to be frugal with car insurance:

1. Don't get involved in any collisions or incidents. It always is cheaper to just not get involved. This includes incidents with police officers who may ticket you for something stupid that you need to go to court for to get adjudication withheld. I learned this many years ago when I was given an "improper use of horn" ticket by a traffic cop at Busch Gardens, I went to court to fight it on my perfect driving record and it was adjudicated but ended up costing $67 in court costs.
2. If you don't damage it, you don't have to fix it (or pay for it). We try to park in the back of parking lots with shopping carts, or on the edge of small lots to avoid having our vehicle bumped into by other things. Bummer this didn't work a couple weeks ago though, some big truck with a 4" tail pipe exhaust backed into the front of the Camry and left a large donut indent in our bumper.
3. Pay your car insurance in full. Usually companies will give you up to a 15% discount for paying in full rather than installments. If you can get yourself to save a portion of your premium each month and pay in full this will save a good amount.
4. Increase your deductibles. If you can save money to pay your deductible out of savings, this will decrease your premium because its cheaper insurance if you have a higher deductible.
5. Eliminate collision and comprehensive coverage if you have an old car. Experts say that you should look up your vehicles blue book value (BBV) at www.nadaguides.com and then subtract the deductible value. Divide this number by the annual premium cost and if your result is less than 3.5 it makes sense to eliminate the coverage.
6. Get comparable quotes from many sources. Use online quote calculators and compare insurance from many sources. We checked Progressive, Esurance, Geico all online instantly. This way even if you don't switch you can feel comfortable knowing you are getting the best rate you can.

So in the end we decided we just need to pay the new higher amount, its the price of living in the land of sunshine.