Is Your Insurance Policy Ready for the New Year? Part 2 - Car Insurance

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So you want to be smarter about your money in 2020. How about starting out by saving money on car insurance? Is that a New Year’s resolution you can get behind? Especially if we tell you we’re going to make it crazy-easy for you?

In part one of our blog series, we made the case for starting your New Year off right by taking a fresh look at your insurance. It really is easier than you think to uncover potential insurance savings and make sure your coverage is fit to purpose. It’s also a quick and highly satisfying adulting win. Let us explain.

6 Reasons Why You Should Reshop Your Car Insurance

1. Maybe You Moved

Did you know that auto insurance rates vary depending on the zip code of your home address? If you’ve moved recently, it’s worth checking whether rates are lower in your new zip code.

Different locations have different risk factors. Even if you just moved a few miles, your new neighborhood may have less risk in insurers’ eyes. Factors that tend to reduce auto insurance rates include lower population density, crime rates, unemployment, claim rates, or litigation activity; increased traffic law enforcement; and better road conditions.

In addition, auto insurance laws are regulated at the state level. That means insurers’ risks vary widely from state to state based on the laws in play and the state’s overall risk profile. For example, states like Florida, Oklahoma, and Louisiana suffer from having more high-risk drivers, making them higher-risk for insurers. Conversely, less densely populated states like Iowa, Maine, and Idaho have fewer drivers, lower rates of uninsured drivers, and fewer accidents, making them lower-risk for insurers.

2. Maybe You Had an Accident

If you recently had a car accident or traffic violation, your auto insurance rates may have gone up. It may sound counterintuitive to renegotiate your car insurance following an incident, but it actually makes sense. Because insurers calculate risk in different ways, you may be able to find a better deal with a different insurer.

3. Maybe You Qualify for a New Discount

The auto insurance marketplace is highly competitive. Discounts are one way insurers strive to differentiate themselves in consumers’ eyes. Over time, insurers may introduce new discounts, or changing circumstances may qualify you for different discounts. It pays to investigate which car insurance discounts you may qualify for.

Potential discounts run a wide gamut from insurer to insurer, and you may be surprised by what helps you save money on car insurance. Discounts may include bundling/multi-policy, multi-car, paperless/autopay/ETF, pay-in-full, military, senior, homeowner, good student, safe driver, good payer, continuous insurance, low mileage, new vehicle, safety features, early quote/signing/renewal, or affinity groups and professional associations, and more.

4. Maybe You Got a Different Car

A different car could unlock different auto insurance rates and discounts. Newer cars come equipped with tons of safety features. More sensible, sedate car models — both new and old — may have better safety ratings, since they’re viewed as better able to protect the car’s occupants.

5. Maybe You’re Driving Less

Does a job or lifestyle change mean that you’ll be on the road significantly less? It’s worth getting new car insurance quotes. If you’re driving less, your risk of being in an accident is similarly reduced.

6. Maybe You Added or Removed a Driver

Most people know that teenage drivers are more expensive to insure. But different insurers offer different deals. And it’ll likely cost you less to add your teen to your car insurance policy than to sign them up for their own. Similarly, when that teen grows up, aging out of the “danger zone,” your rates are likely to go down again.

Even if we’re not talking teenagers, it still matters to insurers which drivers are being insured. Age, driving record, insurance history, and claim history all impact rates. Further, different discounts come into play based on which drivers you’re insuring.

3 (BIG!) Potential Benefits of Reshopping Your Insurance

Whether we’re talking about reshopping homeowners insurance or car insurance, the same potential benefits apply. But they’re worth restating and revisiting. In addition, there are some differences worth mentioning.

1. Save Money on Insurance

Why should you reshop your auto insurance? This part will sound eerily familiar from part one, but don’t we all love hearing about how we can potentially save money? Reshopping may help you save money on car insurance…

  • Due to changing rates. Insurers’ financial circumstances change, too. Market conditions fluctuate, and insurers need to stay competitive and profitable. Hoping to find the right balance between attracting new customers and covering their risks, insurance companies change their rates change from year to year. Those changing rates could mean car insurance savings for you.
  • Due to new discounts. New auto insurance discounts may have become available since you signed up. Also, your changing circumstances may qualify you for different discounts.
  • Due to bundling. Many insurers offer discounts for bundling different insurance policies. This may or may not make financial sense for you, but it’s worth checking.
  • Due to removing optional coverage. We’ll talk more about this below (see “Fine-Tune Your Coverage”), but you may have auto insurance coverage that you don’t actually want or need. For example, did you know that signing up for roadside assistance from insurers can negatively impact your auto insurance premiums?

Remember, unless you ask for new car insurance quotes, you won’t be able to take advantage of these opportunities. Because your insurance carrier isn’t going to automatically tell you about ways you can save money on insurance. That cheeky insurance gecko is dead right about car insurance savings being worth a few minutes of your time!

2. Genuinely Understand Your Coverage

Most likely, you were a teenager when you first learned about car insurance. Amidst all the other things you were learning about back then, did you really take the time to understand how car insurance works?

You probably understand the basics of car insurance. You know how your deductible works. You know there are minimum requirements you must meet. But many people are confused about if and when they should purchase more than minimum coverage, how collision and comprehensive coverage work, what’s excluded from auto insurance policies, and what it means to have an accident in a no-fault state.

Revisiting your car insurance coverage with an online quoting tool like Covered’s is a great opportunity to finally figure it all out. Quick ToolTips explain basic terms and definitions. Side-by-side comparisons help you easily understand the differences between policy options. Best of all, our expert, unbiased Covered insurance advisors will be happy to explain anything you’re unclear on via phone or online chat.

3. Fine-Tune Your Coverage

Remember all those reasons we listed above? The overarching point is that the various factors impacting your auto insurance rates change a ton from year to year. The coverage you first bought years ago may no longer fit your needs today.

On top of that, depressingly, that car is depreciating by the second. Eventually, it’s worth asking whether collision and comprehensive coverage are worth the cost. These (generally) optional coverages are often more expensive for older vehicles. Also, they’ll only pay your car’s actual cash value, or ACV. If your car has depreciated significantly, that may not be much. The insurance savings may outweigh the risk.

So Why Should You Reshop Your Car Insurance?

We’ll say it again: There are no benefits to be gained from doing nothing. There are many potential benefits to be gained from reshopping your insurance. Auto insurance savings may be much closer than you think.

So what the heck are you waiting for? If one of your New Year’s resolutions is to be smarter about your money, annually reshopping your car insurance policy is an easy, painless way to work toward that goal. Let’s all drive off into the sunset together, feeling — for at least a little while — like eminently capable adults who know exactly what we’re doing.

Seriously, why wait to feel all smart and self-satisfied? Find out now if you can save money on car insurance, getting new quotes in mere minutes. Call us at (833) 487-2683 or send us a message. And if you’re a homeowner, make sure to check out Part 1 of this blog series!

Cover Photo by Claudio Schwarz on Unsplash