November 12, 2017
Affordable car insurance

Cheap Auto Insurance

We are always looking for a way to pay less for anything, especially for auto insurance. Who wants to pay for something they may never use or need… not me?  So, when we hear about a way to lower the cost we pay for something like cheap auto insurance, why not.

Let’s be honest, it’s not that complicated, RIGHT?

Auto insurance is all the same, CORRECT?

All I need to do is call an insurance agent or insurance company and give my info and get a rate, easy.

Sure, but what are you getting

1.  Are the rates going to change after I buy?

2.  Am I getting the same coverage?

3.  Do I have to pay more to get my car fixed?

4.  Is this a quote for the final price I’ll pay each month?

The truth is most insurance agents are on a commission and their #1 goal is to sell you a policy and get paid.

You could get lucky and reach an agent/broker who asks smart questions, reviews your coverage’s, asks about what’s important to your like; price, protection, ease of doing business, etc.

What’s the most common practice some agents will use to make their quotes look lower to get your business?

Drop the liability limits – example: 100/300 lowered to 25/50. The liability coverage is the amount of money an insurance company will payout if cause bodily injury and you are found at fault.  State liability minimum limits very by state, but the most common is 25/50 or $25,000 per person or up to $50,000 for all parties injured.  That’s not a lot of money if only one person is hurt let alone multiple people. 

Remember, you are personally responsible for any amount over your liability limit.  Lowering your coverage puts you at risk financially.  Nobody files a $10,000 lawsuit for being injured in a car accident.  Everybody shoots for the moon with a $1 million-dollar suit.

2. Change the deductibles or increase higher – example: $250 collision increased to $1,000.  You have a small fender bender which totals $1500 - $250 deductible and the insurance company cuts you a check for $1250.  You are presented with a cheaper quote by an agent wanting to get your business with a cheaper policy.  The insurance agents only way to make their premium lower is increase your insurance deductible.  Now, instead of paying $250 out-of-pocket to fix your car it’s going to cost you $1,000.  Cheap policies are sometimes just that…cheap for a reason.

3. Simply remove or don’t add the same coverage(s) on your current policy.  What, I don’t have rental car coverage…I had it on my old policy.  After you file a claim is not the time to find out what coverer’s you are missing.  The car is in the shop for 30 days and the rental car is $30/day.  You just added $900 on top of your higher deductible. 

At this point you might be asking, “what am I paying for?”

Most people have no clue about what coverage’s or deductible they have and why should they.  If you are working with a trusted insurance advisor, they should be guiding you to affordable option you can afford.

cheap auto insurance

I thought I was covered when I bought cheap auto insurance

As you can image we receive many quote requests daily.  As we obtain information necessary for the quoting process about current insurance coverages with prospective customers the most common response we receive about current coverages is “I don’t know.” 99% of the time if a person doesn’t have their policy in front of them they wont recall what they currently have.  Typically, we get: “I don’t know other than I have FULL coverage.”

Unless you’re sitting in front of your policy declarations page most people wouldn’t know either. what you want to do, if you’re getting quotes from other insurance companies or agencies, is know your current policy limits.  Ask your current agent or insurance company for a copy of your “Declaration Page.”  This will provide a detail description any insurance broker will understand what you currently have, coverage wise.

If you’re not able to forward your insurance declarations page to be reviewed, make sure to read the coverage’s over the phone or enter when completing an online request.

Agents and brokers may seem like they are asking a lot of questions, but the truth is there are a lot of discounts available. As a matter of fact, every question is a potential discount; yep that’s right. Except your name and phone number, pretty much everything else could save you money.

Questions that may be discounts on your auto insurance

1. Address – where do you live? Think city vs. Suburbs; rates are always lower the further from city’s

2. Age – younger drivers generally are having accidents more than older drivers.

3. Vehicles – what kind and how many? The more the cheaper and safer the better

4. Prior Insurance – It’s required by law and if you don’t have it will cost more to insure now

5. Residence – Do you own or rent? Homeowners get better rates; more stable

6. Method of payment – Pay-in-full, vs. EFT, Credit/Debit or Direct bill monthly. 10-20% savings if you can pay-in-full.

7. Education – do you have a four-year degree or higher? Highly educated folks get better rates

8. Occupation – Fireman, Nurse, Teachers and other jobs can qualify for lower rates.

9. Driving distance – are you a pleasure only driver or short commuter vs. business use

10. Driving history – Do you have tickets and accidents. How many and when up to 10 years

The more information you can provide the better opportunity a cheap auto insurance broker might have at finding the best possible premium.

Some people are also hesitant about providing their current premium and want to play a game of give me your best rate.

There are a few reasons why agents and brokers would like to know what you are currently paying.

A. You might already have a great rate and it’s time consuming for you and the insurance agent to go through the process. Insurance brokers have multiple companies to check.

B. The agent has other customers needing quotes and it can be a bit of juggling act to provide quotes on time.

C. Your quote request may fall to the bottom of the stack in favor of folks who want to provide full disclosure and want help with getting the best cheap auto insurance policy and best rate.

D. Brokers have 10 to 15 more companies to quote which can take even more research

E. While we appreciate your need to shop for lower rates, not disclosing your current or renewing premium says you don’t value the agents time.

Trust us when an agent or broker says based on the information you’ve provided and the premium you’re currently paying it’s a good rate or we can help. Insurance brokers are not trying to turn down business we must manage our time to provide the best customer service.

What goes into building a cheap auto insurance price?

After the agent gathers all the info needed, they will need to enter in the quoting system. Insurance agents are quoting one company. Whereas and insurance broker is quoting many companies usually using a rating program. These rating or rater programs are linked to the insurance companies which bring back preliminary quotes.

Often insurance brokers receive premiums based the information entered, but because each company asks different questions you still need to visit the respective company’s website. This is where it can be time consuming for insurance brokers. Even though the broker receives an early sign of a favorable rate thing's can change when clarifying different insurance company questions.

So, it’s very helpful for insurance brokers understand your current premium, so they can drop a company early on and spend more time running accurate reports with other carriers.

I’ve got a Great Cheap Auto Insurance Rate for You!

Once rates are run based on the information provided by the individual or what we call the insured, we can now review as they say: Apples to Apples.

Do We Have a Winner – Can we save you money, are the coverages the same or better.

Great, based on your current policy limits we have a better rate. Now that you feel comfortable, we can be competitive and often hundreds or even thousands a year lower, let’s dig into what you have and what you need.

Getting better coverage's provides protection for you and your family’s financial future. If we now have an opportunity to save money and get better coverage, who wouldn’t want that.

You might be able to lower your out of pocket deductibles if involved in an auto accident or had a windshield crack. Personally, I had the need for a rental car after my vehicle was hit with hail damage. Or, it could be the need for an excess umbrella liability policy. You might be the one sued in an auto accident with someone claiming permanent disability. Can you afford to have your wages garnished, or your home sold to satisfy a claim that exceeds your current liability limits? 

Insurance in most cases is a long-term relationship and often generational. A Family may use the same insurance broker or agent from parent to children and even grandchildren.

Finding an agent or insurance broker you feel comfortable with is as important as price. But, that’s not to say it might be worth your while to shop around for lower rates. I can’t tell how many people we speak with a day that has been with the same agent or company for 30, 40 and 50+ years. Chances are they have some pretty good coverage’s, but they are paying too much.

We can do a quick review of your coverage’s and premium with multiple insurance companies that are competitive in your state.  For more information or to start getting quotes call 800-459-6060 or online quotes HERE

Read More Articles:

Could a Dash Cam Reduce Your Auto Insurance Costs?

John Espenschied is a long-time veteran of the insurance industry. He's worked with thousands of clients over the years, helping to protect their personal and business needs. John's goal is to provide the best advice possible to assist customers in saving money while protecting their property and securing their financial future.
He truly enjoys helping others and takes great satisfaction in providing top-notch customer service. When he's not working, John has fun spending time with his family, golfing, bike riding, and blogging on insurance topics.

 Get Quotes!

Compare Local Insurance Rates