The same thing happened to me a few years ago! I saved the “or more” part of 15% or more by switching to Geico. :-) The best part is that it wasn’t a bait and switch, my rates have never gone up since I switched 5 years ago. Great insurance.
@FI Pilgrim, Yup, usually rates go down slightly each period where there is no incident. I was actually disappointed at how little they were going down, so I ended up switching from Progressive to GEICO at the beginning of the year.
Changing your coverage amounts is a solid way to save some money, but it’s important to consider the ‘what if’ situation and to be covered, so if you raise your deductible from $500 to $1000 you should make sure you have access to $1000 should the need arise.
@Money Beagle, we could definitely cover the deductibles, and while it would definitely be a hassle, I can’t imagine we’d total one of our cars every 5 years or so, so the savings ends up being worth it mathematically.
Very timely post as I’m looking into this right now with my car insurance. I got some good quotes from other car insurance companies with the same amount of coverage I currently have but I haven’t heard good things about their customer service. I have had a great experience with nationwide so far so I’m going to try to decrease my unneeded coverage as much as possible before switching. Thanks for the great post!
We review our coverage and rates every renewal. I actually left USAA to go to GEICO which shocked me because USAA was always cheapest by far.
@Lance@MoneyLife&More, yah, I’ve never heard anyone ever say USAA was more expensive. Nice job with checking every renewal period. Sometimes it sneaks up before I have time to do my due diligence.
I just wish I didn’t need a car. They are so expensive.
All makes sense to me except Comprehensive. This covers total loss of the vehicle, so of course you’ll need a new car. The $1,000 deductible just means that if your car is worth $5000, you’ll get only $4000 to apply to the new car you will have to buy. So, it seems to me that the decision about Comprehensive should be determined solely by how much your car is worth. The more its value exceeds the $1000 deductible, the more worthwhile.
true, but if my car is worth $5,000, how much should I be paying each year just for the $4,000 in insurance if one of those unlikely events happens? Theft, vandalism and glass damage likely wouldn’t be enough to hit my deductible, so natural disasters and hitting animals are likely the only uses for this.
Insurance by definition is a bad deal. Mathematically, I’m likely to pay for something I won’t use. I can afford if it something were to happen, so I guess I’ll roll the dice that I won’t get into a large accident with a deer in the next 2-3 years.
Another consideration is the amount of liability coverage you currently have.
Most people don’t have an umbrella liability policy, so the only liability they have is their auto insurance, or perhaps their home insurance. If you have high liability coverage on multiple policies, you can likely save money by reducing those and buying an umbrella liability policy.
‘Saving’ eight hundred dollars or more (for example) by paying less for the same coverage product is absolutely possible. This arises because of the spread of ‘Base Rates’ that exist for a driver’s basic profile and location. It represents the difference between a comparatively low tier rate carrier and one that is expensive for the given driver in question. A standard policy premium (that contains comprehensive and collision) could differ in price by $1,000 on account of base rate variation. Average savings reflect average (modest) shopping effort. Switching carrier is the principal route to a cheaper premium above all other techniques.
Collision and comprehensive is considered essential for most drivers. Only when the vehicle has greatly depreciated in value (kelley blue book worth under $2,000 for example) does it indeed become economically viable (on balance of risk) to consider dropping such coverage, because of the associated cost and deductible scenario.
If you lease or have an auto loan, you will be required to hold Collision and comprehensive under contract regardless.