Your car insurance is one of the biggest expenses you’ll have. Paying for it each month to ensure your protection on the road is essential. You never really know when you’ll need it. With that being said, ask your self the following:
Are you satisfied with your insurance payments?
I’m sure there are more that come to your head like, how do you get cheaper insurance? Well COMMON CENTS MIKE made a video all about how you can save on your car insurance and what you need to know to do exactly that. Its a great watch that will help you with taking the right steps to being properly covered and not overpaying.
If you don’t feel like watching a video, that is totally cool, check out the transcript if you’d like a quick read!
Michael: Hey, what’s going on everybody? Hope you having a good day as always. My name is Michael and thank you for joining me. Today, I’m very excited to talk about a subject that I’ve been meaning to make videos on for a very long time. That is car insurance and saving money and everything that you need to know about the subject. The reason why I haven’t made a whole lot of videos is because it’s really just not my area of expertise. I worked at a credit union and I loved helping people refinance car loans and help them learn about credit scores and all that and save money on interest but insurance wasn’t really my department.
I was really really fortunate to have someone reach out to me, Dale Hansen. He said, “You know what, you’ve got a lot of good content on your YouTube channel why not talk about insurance stuff?” That’s what we’re doing today. I emailed him all the questions that I would have as a consumer and that’s what I want to share with you guys today. Again, Dale, thank you very, very much. I really do appreciate you agreeing to do this. Guys, if you’re at all interested in finding out if you’ve got the right policy or if you’re overpaying, if you can just save some money, definitely reach out to Dale and his group.
Here’s his phone number and his email address. Also, if you’ve got any questions at all about insurance in general, put it in the comment section down below. But again, Dale, thank you very much. Now, here’s what I’m going to do. I’m going to break it down into the questions that I had asked him because I really just wanted to know for my own information and I’m also going to share a few things that you can do to save some money on your car insurance policy. Let’s go ahead and start off the questions. Question number one was, do you need to wait for your current policy to expire before you can switch over to a new insurance provider?
The answer is no. It doesn’t matter if you just signed on for a renewal maybe two months ago, and you’ve got 10 more months ago, you can switch on ever you want. That was good news for me because I had to switch my condo policy. I lived in it for about two and a half years but now that I rent it out, I don’t need the same level of coverage and protection as if I lived in it. I was able to switch that policy over, save a couple hundred dollars and I thought I wasn’t have to wait for my current policy to expire. It was very very nice and convenient not having to do that.
The next question I had was, isn’t it always better just to stay with your insurance company for a long time so you can get their discounts? Apparently that’s not true. In fact it’s the opposite. Apparently insurance companies, if you’re someone that’s been there for let’s say 20, 25 years, they look at that policy and say well, they’re not going anywhere. Even if I steadily increase certain premiums every single year, they’re not going to go anywhere and that’s just easy money. It doesn’t always work out in your favor to stay with the same place for a long time. Brand loyalty and car insurance don’t necessarily go together, not always at least.
Another way of looking at this is this way. If you’re an insurance company and you want new business, well, you may be giving discounts to new people and not those that have been there, again, 25, 30 years and you have no real concern that they’re going to leave. A lot of times, insurance companies aren’t going to give those discounts to new clients and you’re going to be benefiting from shopping around and making sure, hey, if there’s a discount out there take advantage of it. If you’re a new member, you’re going to get that new discount. Always make sure that you’re doing the best you can to make sure you’re not overpaying for your policy premium.
The next question wasn’t really a question directly, but I’d asked you know talk about full coverage versus liability only and he pretty much put it this way. It’s pretty simple. If you’ve got a car loan, you’re going to need full coverage. Not only for your protection, but for the lenders protection. The lien holder is going to want to make sure that their asset is fully protected and that makes sense. Whereas if your car is paid off, now you have the choice of whether or not you and go liability or full coverage. Again, this is pretty simple too.
If your car’s not worth very much, if it’s only worth maybe $2,000, you’ll probably want to go with the liability coverage and use that monthly savings to offset any total loss that you could experience in the future. On the other hand, if your car’s paid off but it’s still worth let’s say like $15,000, $20,000, you’re probably going to want to protect that as well with full coverage. Again, it’s not really a matter of how am I going to save the most money when it comes to full coverage versus liability? It’s about how am I protected most efficiently?
Another question I had asked Dale was, how long do your accidents and your tickets stay on your driving record as far as insurance is concerned? I was surprised to find out that it’s different from state to state. For me, in Texas, it’s going to be different than Dale who lives in Arizona or any other viewer who lives in a different state. For me, apparently, it’s going to be about three years which is actually convenient because that means that my one speeding ticket that I’ve ever had is going to fall off in about 45 days. Once that happens, I’ll be able to switch over the auto policy as well and save another couple hundred dollars.
If you’ve got anything as far as a bad driving record and it’s about to fall off take advantage of it once that time has expired because that really, really does a number on your policy premium. There’s no point in overpaying if you don’t have to. All right, the next question I asked him was how often should you shop around for a new policy quote? He put it this way. He himself pretty much every single time this policy comes up for renewal, is going to find out if there’s a better deal out there. Now, maybe that’s overkill but because he works in the industry, he knows that he’s probably doing the best he can for himself by doing that.
But even if you don’t want to go necessarily that route, every couple of years, make sure you’re going out there doing what you can to find out if there’s a better provider or a better cost. Or maybe you keep the same dollar amount for your policy premium but you can get more coverage for that same dollar amount. Either way, do your best every couple years to shop around and find out if there’s a better deal for you. The next question that I had asked him was what age do you get your first discount? It’s at 25-years-old. If you’re 24 and a half and you think your car insurance is a little bit expensive, definitely know that relief is on the way.
After that, there’s a bunch of other factors that come into play like when you get married, when you bundle and we’re going to talk about that here in a second. Your driving record, all of that stuff comes into play more so than your age later on down the road, but once you hit 25 just know that there should be a discount coming. The last question that I had asked him was why use an insurance broker as opposed to just going to these companies directly? It really comes down to convenience and discounts. From a convenience standpoint, an insurance broker is someone that doesn’t necessarily work with one company.
They work with a whole bunch of different insurance companies across all 50 states and they say look I’ve had a client that needs this level of protection, who’s going to give me what deal and you’re not probably to get the best deal that is offered. That’s very convenient. In addition to that, there’s discounts. That broker may get a discount from going through X company and if they get that discount, that savings isn’t going to be passed along to you. Would you rather take the time to get individual quotes from let’s say Allstate, State Farm, Geico, Progressive, Liberty Mutual? Would you rather have to take the time and get quotes from all of them and pay extra?
No. That’s what an insurance broker is for and that’s all pretty much new to me. We had a similar system back at the credit union but it wasn’t quite as diverse, but either way, take advantage of an insurance broker because it just makes things easier. Now I want to start talking about some things it will actually save you some money on your policy. Let’s just start off with a few things that I think are really really simple. Number one, I had asked him to talk about six-month policies versus 12-month policies. This was new information to me that I really want to share. Always go with a 12-month policy if you can.
The reason being is that pretty much every time your policy comes up for renewal where your insurance provider has an option to increase your premium. If you have an option to renew every six months, well, that means that the insurance company has two times every single year to increase your premium. Well, if you’ve only got a 12-month policy, they can only do that one time per year. Again, the less opportunities you give them to increase your premium, the better it is for you. Yes, always go for the longer term policy. Next, let’s talk about bundling and this may not apply to everyone, but it’s really really simple.
If you do have multiple assets, you can tie into one policy. Do it because you are going to get the discount. For me as a homeowner, it made sense to tie in my condo and my vehicle under one policy and I wouldn’t have gotten those discounts if I would have kept them at separate companies. Perhaps you’re a renter and you want to tie in your renter’s policy to your auto policy, that’s a discount. Maybe you’ve got life insurance pretty much everything you can do to bundle together is going to save you money in the long run. That’s probably nothing new but a lot of people don’t always take advantage of that.
Another thing that is car insurance-specific is if you are someone that doesn’t put a whole lot of miles on your car each year, definitely let the insurance company know. There is a discount for that. If you work from home or maybe you just live really, really close to work and you don’t put a whole lot of miles on your car, let the insurance company know because that’s just another discount that you can take advantage of. Next, another discount that I took advantage of when I switched over my policies was if you have the ability to pay for your full year in full, you’re going to get a discount.
I think, for me, it was about a 10% discount. It may have been a little bit less than that. I can’t quite remember but either way, if you’ve got an emergency fund covered, if you’ve got money in the savings, if you’re not living paycheck to paycheck and you can afford to pay for your insurance in a one-year chunk, do it. Because that’s just another amount of savings that you can add on top of all the other savings you’ve already accrued. Now, the last thing I want to mention is something similar to bundling your home and your auto. If you’ve got multiple people on your policy, you’re going to get discounts for that as well.
Even though me and my girlfriend aren’t married, but us being on the same policy, we’re going to get discounts. If you live with your girlfriend and it’s a relationship where you know you don’t mind necessarily being on each other’s policies, and there’s actually extra protection that goes along with that, definitely take advantage of that well because it’s just, again, another savings and I’m all about getting all the savings I can. All in all, those are just some really really quick things about car insurance, how to save money, what you need to know.
Dale, again, I cannot tell you how much I appreciate it. Guys, if you’ve got any question, make sure reach out to him. Let him know that you came from the YouTube channel and that we greatly appreciate all of his help and support. But either way, thank you so much for watching. Don’t forget to like, subscribe, comment, share. You guys know what to do, but thanks for watching. I’ll see you guys next time.
Hi guys. I know I just said this stuff but let me say it again. Thank you so much for watching this video. I appreciate all the support that you guys give me, and to support you, here’s two more videos that I made in the past, in case you haven’t seen them. Don’t forget to share these with your friends and family so we can help all the people achieve their financial goals. Likewise, if there is anything that you would want to see made that you haven’t seen thus far, definitely don’t hesitate to let me know. But thanks again, take care, and have a good day.