Author Topic: Lower Our Car Insurance costs  (Read 1576 times)

OneDayAHouse

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Lower Our Car Insurance costs
« on: February 17, 2017, 02:12:52 AM »
My girlfriend bought a car in March of last year and we wound up getting an auto insurance plan together. We are insured through mercury.

Auto Insurance Provider: Mercury
His Car: 2012 Mazda 3 Sedan (Financed)
25/50/25
Her Car : 2014 Hyundai Elantra (Financed)
25/50/25
We pay about 340 a month to keep both cars insured.


We are both 25 and have had our license since age 16 with no accidents or tickets on our records. We live in Northridge, CA close to Los Angeles and within walking distance to CSUN (University).

I'm not the most well learned person when it comes to Auto Insurance rates but I feel like our rates are really high, and when I try to get quotes online from a bunch of different companies all the quotes come back higher than what we are already paying. I know of an ex co-worker of mine who has a dui on her record and just recently got her license back that is paying less in insurance than us and has a fancier car. What are we doing wrong and is there anyone that knows of a way we could reduce our car insurance rates?

ShoulderThingThatGoesUp

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Re: Lower Our Car Insurance costs
« Reply #1 on: February 17, 2017, 11:50:25 AM »
Well, you could drive less fancy cars. Are they parked on the street?

therethere

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Re: Lower Our Car Insurance costs
« Reply #2 on: February 17, 2017, 11:58:04 AM »
You neglected to divulge your deductibles which can make a huge difference. The best way to lower insurance rates is to quote everywhere. I really do mean like 10-20 different companies to quote. I've had best rates with Progressive and State Farm.


In my opinion, 25k/50k is extremely low. It wouldn't cover one at fault accident totaling a BMW or causing injuries. Think about it most newer cars on the road in some areas are worth more than 25k by themselves. Also, it may be counter intuitive, but having the lowest coverage can sometimes cost more than higher coverage. They assume you are a risky individual because you aren't knowledgeable about how much liability you really have.

NathanP

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Re: Lower Our Car Insurance costs
« Reply #3 on: February 17, 2017, 12:01:52 PM »
Car insurance is largely based on these factors:

  • Your driving history. (Doesn't seem to be your problem)
  • Your credit score
  • Your location (high crime or lots of uninsured or bad drivers?)
  • Details such as age and marital status

Assuming that you have good credit and aren't willing to relocate you might not have many options other than to downgrade your vehicles. Another thing to consider is where the cost is coming from. Is it liability or from comprehensive or collision coverage? In a high crime area I would expect the comprehensive coverage to be high and in an area with many bad drivers, the collision cost would be high. If this is true for you, definitely consider getting low cost vehicles with only liability insurance.

Edit: +1 to the post above. If you own a home or have other assets then RAISE your liability coverage.
« Last Edit: February 17, 2017, 12:03:50 PM by NathanP »

Future Lazy

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Re: Lower Our Car Insurance costs
« Reply #4 on: February 17, 2017, 12:04:13 PM »
$340 per month is about $4080 per year, which really does seem like a lot. Here are some tips:

Sell one car and share one car, easy way to cut this significantly. Pay the other car off entirely, and get rid of collision and comprehensive. Slightly less easy way to cut this significantly, but with the added benefit of no more car payment. Ideally, sell both cars, buy a couple of bikes, and get this drag off your plate entirely. :)

Raise your collision and comprehensive deductible. A deductible is the amount you would need to pay out of pocket before your insurance kicks in to pay for damage to your car. If you could easily come up with $2000 to pay out of pocket, raise your deductible to that. Different carriers will have different deductible limits.

GAP insurance covers the difference between your car's value, and what you owe on your financing, so your insurance can pay off the financing in the case your car gets totaled. Do you have GAP insurance, and where at? Some car financiers include GAP in the cost of the payment, and some require you to get GAP through your insurer. Check it out.

Check on how far your insurance company thinks you are driving one way to work/school. This can make a big difference in how "risky" you look to an insurance company.

Check on your credit score, and improve it if you can. Credit does factor into your "insurance score" (like a credit score, but for insurance), which is used to rate your riskiness as an insured.

Disclaimer: I work in insurance in Colorado, so this advice may not apply to California.. But! In Colorado, you can reject medical payments coverage, and also reject uninsured/underinsured motorist coverage. Medical payments is handy, as it can kick in to cover medical costs up to your health insurance deductible. UMUI is handy if you get in a hit and run situation, or if you get hit by someone without insurance, or without enough insurance to cover the damage to you/your car. I'm not sure if California will let you reject this or not, but rejecting it can lower your costs. That being said, if you *do* need that coverage, don't just throw it out. Insurance is supposed to be there for when shit hits the fan.

Check with your insurer, and see if you can qualify for any discounts when bundling with other types of insurance. Be careful with this! Don't buy renter's insurance or life insurance just because it will make your auto insurance go down - in the end, you'll probably just raise your insurance costs overall. Insurance is about offloading financial responsibility onto a 3rd party that weighs the risk of insuring you against the money they charge to insure you. Only buy the coverage you really need. Exploiting discounts is usually best done through an Agent who understands how to work their carrier's system.

All of that being said, there are some things that are futher outside of your control. For example, car insurance rates are more expensive if you live in a Denver zip code, as opposed to living in an Adams County zip code. They could be right across the street from one another, but still have a cost difference based on statistics. In addition, rates increased across all carriers in the Denver Metro Area this spring because of how many people are moving into Colorado. A broad situational shift like that affects the riskiness of driving in general, and so everyone gets a rate bump, even if they're a really responsible driver, or never use their car, or have been insured with Company Y for 30 years.

Hope this helps!
Kayla
« Last Edit: February 17, 2017, 12:06:40 PM by Future Lazy »

doneby35

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Re: Lower Our Car Insurance costs
« Reply #5 on: February 17, 2017, 12:06:28 PM »
Have you tried Geico? is that an option in your state?
I switched from State Farm to Geico for my 2 cars (both are 2014 cars) and it saves me $900 annually. I'm paying $80/month for both.

boarder42

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Re: Lower Our Car Insurance costs
« Reply #6 on: February 17, 2017, 12:15:04 PM »
call lots of insurance companies

ALL of them.  call brokers that manage multiple agencies.  make sure you compare apples to apples and take the cheapest one.  it varies wildly geico isnt usually the lowest for most. but its better than state farm which is likely way over priced.

Future Lazy

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Re: Lower Our Car Insurance costs
« Reply #7 on: February 17, 2017, 12:27:06 PM »
call lots of insurance companies

ALL of them.  call brokers that manage multiple agencies.  make sure you compare apples to apples and take the cheapest one.  it varies wildly geico isnt usually the lowest for most. but its better than state farm which is likely way over priced.

^----- As an insurance producer, make sure you're comparing apples to apples! That means identical coverage across multiple carriers. The EASIEST way to do this is to send over a copy of your current coverage and ask them to quote the coverage as exactly as possible. Otherwise, I have no idea what I am matching, so I have no idea if my carrier is going to be less or more than what you already have.

Alternately, you could come up with a dollar amount you'd prefer to pay, and make agents/producers work to meet your demands. This is a little more "cruel", from the standpoint of a producer, as I have to start removing coverage to lower your price. This can feel unethical and dangerous, especially if I think you don't understand the potential gravity/consequences of rejecting uninsured motorist coverage just to get a lower price.

Also, have all your details (SSN, Driver's license number, VIN number, birth dates, etc) handy when you are shopping around. Insurance agents/producers really can't give you an accurate price without all the information. If we don't know these key details, we're really just guessing.

lbmustache

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Re: Lower Our Car Insurance costs
« Reply #8 on: February 17, 2017, 12:53:29 PM »



In my opinion, 25k/50k is extremely low. It wouldn't cover one at fault accident totaling a BMW or causing injuries. Think about it most newer cars on the road in some areas are worth more than 25k by themselves. Also, it may be counter intuitive, but having the lowest coverage can sometimes cost more than higher coverage. They assume you are a risky individual because you aren't knowledgeable about how much liability you really have.

I agree, this sounds low to me too.

Anyway, a coworker saying "I drive a newer car but pay less," means nothing. Do they have a higher deductible? Live in a different zip code? Are they older? How many miles do they drive? Are they skimping out on some aspect their of insurance policy?

FWIW I live in the greater Los Angeles area myself, and I pay a little over $2k/year for 12k miles, 2016 Honda, and 2 accidents on my record (this is what's killing me). My insurance went up by about $20/mo when I moved from 10k miles to 12k miles. If you don't drive that much it's worth looking into what mileage the insurance company has you set at.