You Can Save Money On Your Car Insurance By NOT Switching Companies

When trying to balance an unhealthy budget,  one of the first things to look at is your spending habits.   You need to determine if your monthly expenses are worth the cost that you are paying, and to identify if there are savings opportunities available that can help drive costs down.   Here in the See Debt Run household, we found ways to eliminate costs from our phone bill, utility costs, cable television, fuel expenses, groceries, and more.  Another expense that we put under the microscope was our car insurance bill, which seemed like a good candidate to find some savings.

I have written in the past about how paying for car insurance each month really feels like money for nothing, but all the same– it is required by law, which is a good thing.  The car insurance industry is a highly competitive field, where companies battle each other with massive advertising budgets to try to siphon customers from their competitors.  Some of these companies, like Geico and Progressive, focus their advertising on the fact that they should be able to help you save money on your monthly premium, if you are just willing to spend a few minutes checking out their rates.  In my quest to identify savings opportunities in our monthly budget, I decided to put their claims to the test.

To start, let me provide some background on my own car insurance history.  My parents have been long time State Farm customers, and when I turned 16, they added me to their plan.  State Farm is by no means a discount provider, instead opting for an approach where their customers are assigned to an individual agent in their town, and they try to keep customers happy by offering a variety of discounts to customers who have good driving records, and who stay loyal to the company.  State Farm also covers the costs of emergency roadside assistance and towing with their comprehensive insurance, which is a nice perk.  Of course, they also advertise as much as anyone, especially during football season.

When I graduated from college, I left my parents plan but stayed with State Farm.  My monthly car insurance costs were hundreds of dollars when I first turned sixteen, but over the years, my bill has been gradually decreasing to the point where it is only a fraction of this.  I got a huge discount when I turned 25, and even larger one when I got married, and further discounts for multiple cars and having a homeowners policy with the same company.  All and all, my current coverage comes out to $289.17 every six months, or $49.17 monthly for my primary vehicle.  This is further broken down in the table below:

Keep in mind that my wife and I both have very good driving records, with few speeding tickets and no at-fault accidents in the last ten years.  The numbers above include the previously mentioned discounts, and as you can see, the rates are actually very competitive.  If you add in the costs of our second vehicle,  it comes out to about $85/month for my wife and I to get comprehensive car insurance with reasonable deductibles.  Considering that this total has been steadily declining year after year, and I was very skeptical to see if Geico or Progressive could compete.

When I ran the numbers, my suspicions were correct.  You are only required by law to have liability insurance (to cover the repairs/injuries of someone else’s vehicle), and you could certainly save money by dropping the comprehensive insurance (to cover our own vehicles as well).  Both sites were quick to point this out, but I would never go this direction.  Additionally, both sites tried to push me towards a higher comprehensive and collision deductible ($500/$1000 respectively), which could drive my costs down.  But even with higher deductibles, their prices were fairly close to what I was paying today.

If I were to get the exact same coverage (comprehensive coverage with same deductibles, and same liability caps) that I had today, my monthly cost would be an additional $25 monthly with Geico, and an additional $40 monthly with Progressive.  It was clear that at least for me, the only way that these companies could save me money on my car insurance, was to switch me to an inferior plan.  On top of all of that, I would lose the higher level of service that comes with having a local agent.  Without a doubt for my family, switching insurance companies was not going to be a good route for cost savings.

One final note of warning about this.  When submitting for online insurance quote information, you might be subjecting yourself to dozens of solicitation phone calls from every insurance company in the book.  Instead of using the aggregator sites, I would recommend reaching out to individual companies yourself to see if you can get a direct quote.

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