Written by Bob Kelly, Agency Principal at PolicyVisor, with over 20 years of insurance experience
Everybody wants to pay less for car insurance.
That part is easy.
The harder question is:
How do you lower the premium without cutting coverage you may actually need later?
I see people get cheaper quotes all the time.
Then we compare the quote to what they currently have and realize the deductible went way up, liability limits dropped, rental coverage disappeared, or uninsured motorist coverage was reduced.
Yes, the premium is cheaper.
But the policy may also be worse.
At PolicyVisor, I would rather look for savings first without creating a big hole in the coverage.
Here are five places I usually start.
1. Shop the Policy
This is probably the easiest place to start.
Insurance companies do not all price the same person the same way.
One company might really like your combination of drivers, vehicles, location, insurance history, home ownership, and other rating factors.
Another carrier may not.
And that changes over time.
We have seen a number of carriers become more competitive again after a few years of pretty difficult auto insurance pricing.
The problem is that a lot of people are still sitting on policies that were priced during a much harder insurance market.
If your rates went up substantially over the last few years and you have not reviewed the policy since, I think it is worth looking.
That does not mean you should switch insurance companies every year.
Sometimes we shop someone and tell them:
Stay where you are.
There is nothing wrong with that.
The point is to know whether your current company is still competitive instead of assuming it is.
2. Look at Your Deductibles
I usually explain deductibles as a small gamble.
Let’s say you have a $500 collision deductible.
Moving it to $1,000 saves you $15 a month.
That is $180 a year.
In exchange, if you have a covered collision claim, you are taking on another $500 of out-of-pocket risk.
So the way I look at it is:
How long do you have to go without a claim before you are actually in the money?
In this example, you would need to go almost three years without a collision claim just to make up the additional $500 of deductible.
If you go five or six years without a claim, maybe that gamble worked out pretty well.
If you have an accident six months later, it did not.
That does not make a higher deductible good or bad.
I just want to see the actual numbers.
If moving from $500 to $1,000 only saves you $4 a month, I probably would not be excited about that trade.
If it saves you $25 or $30 a month and you have the money available if something happens, that is a different conversation.
The question is not just:
“Can I lower my premium?”
It is:
“How much am I saving, how much extra risk am I taking, and how long do I need to go without a claim before I come out ahead?”
3. Make Sure You Are Getting Every Discount You Qualify For
This sounds obvious, but discounts get missed.
Depending on the carrier, you may qualify for things like:
- Home and auto bundling
- Multiple vehicles
- Good student discounts
- Driver improvement discounts
- Lower annual mileage
- Telematics programs
- Certain payment-plan discounts
- Safety equipment discounts
One discount I particularly like is the Pennsylvania mature driver improvement discount.
For eligible drivers age 55 and older, completing an approved driver improvement course can qualify them for a premium reduction.
At PolicyVisor, we make that course available free of charge to any insured age 55 or older as a value-added service.
I like that because it is simple.
You take a course, hopefully pick up a few things that make you a safer driver, and you may qualify for a discount at the same time.
As with any discount, the actual savings and eligibility depend on the carrier and policy.
But if you qualify, I think it is worth doing.
4. If You Are Open to Telematics, Say So Before We Start Quoting
Telematics can completely change the quote.
This is one of those things I like to know before I start shopping a policy.
If you are willing to let an insurance company monitor your driving through an app or device, tell your advisor up front.
Different companies handle these programs very differently.
Some carriers may surcharge you if the driving results are poor.
Others may use the program mainly for a discount and not penalize you the same way.
Some companies want you enrolled indefinitely.
Others may only monitor you for a limited period, sometimes around 90 days, and then use that data to determine your discount.
That makes a big difference when we are deciding which company makes sense to quote.
One person might say:
“I don’t care. Track me if it saves me money.”
Someone else may have absolutely no interest in an insurance company watching their driving habits.
Both answers are fine.
But if you are open to telematics, I want to know before I start quoting because it can completely change which carriers are competitive.
And before you enroll, understand the rules.
Ask:
- What does the company track?
- How long do they track it?
- Can poor driving increase my rate?
- Do I have to stay enrolled to keep the discount?
- Is phone use part of the score?
- Is nighttime driving part of it?
Do not just hear “up to 30% savings” and stop there.
Know what you are signing up for.
5. Make Sure the Policy Still Matches How You Drive Today
People forget to update this stuff.
Maybe you used to commute to work every day and now you work from home.
Maybe you retired.
Maybe one of the kids went away to school.
Maybe a car that used to get driven 15,000 miles a year now barely leaves the driveway.
Those things can matter.
I am not suggesting anybody give an insurance company inaccurate mileage just to get a cheaper rate.
The information should be accurate.
But if your driving habits changed three years ago and the policy was never updated, you could still be paying based on information that is no longer true.
That is an easy thing to review.
One More Place I Look: Does Every Coverage Still Make Sense?
This is not about randomly removing coverage.
It is about looking at whether something still makes financial sense.
The easiest example is comprehensive and collision on an older car.
I always use my Uncle Tommy for this one.
Years ago, he was carrying comprehensive and collision on an old 2003 Nissan Sentra.
I used to joke that if he got a flat tire, the car was probably going to be a total loss.
Obviously, that was not literally true.
But the point was.
The car was not worth much, and he was still paying every year for physical damage coverage that could only pay so much if the vehicle was totaled.
At some point, you need to do the math.
What is the car worth?
What are you paying for comprehensive and collision?
What is the deductible?
Could you replace the car yourself if something happened?
If a car is only worth a few thousand dollars and you have a $1,000 deductible, there may not be a huge potential insurance payout there.
If you are paying several hundred dollars a year for that coverage, it may not make sense forever.
That does not mean everybody with an older car should drop comprehensive and collision.
Sometimes keeping it still makes sense.
Sometimes it really does not.
The important thing is to actually look at it instead of paying for the same coverage for ten years because nobody ever reviewed the policy.
What I Would Not Cut First
This is just as important as the ways to save.
I would not start by blindly cutting things like:
- Bodily injury liability
- Property damage liability
- Uninsured and underinsured motorist coverage
- Stacking
- Medical benefits
Could there be situations where we adjust one of those?
Sure.
But they are not where I want to start just because somebody wants a cheaper number.
Those coverages can become extremely important when there is a serious accident.
I would rather shop the carrier, check the discounts, look at deductibles, review mileage, and look at whether older vehicles still need physical damage coverage before we start stripping away liability protection.
Bundling Is Worth Checking Too
Home and auto bundling can create a nice discount.
We do it all the time.
But I still want to look at the total household cost.
If one carrier saves you $400 on the auto but charges $800 more for the home, that is not really a savings.
I want to look at the whole picture.
Sometimes the best answer is keeping everything together.
Sometimes it is not.
That is one of the advantages of working with an independent agency.
We can look at more than one company.
Payment Plans Can Matter Too
Some insurance companies charge installment or service fees depending on how you pay.
If paying in full saves money and works for your budget, it is worth looking at.
I would never tell someone to stretch themselves financially just to avoid a few service fees.
But I would at least want you to know what the difference is.
Sometimes there are easy savings sitting there.
The Goal Is Not the Cheapest Policy
This is really the whole point.
I can make almost any insurance policy cheaper if you let me remove enough coverage.
That is easy.
That is not necessarily good insurance advice.
What I am trying to do is find places where we can lower the premium without taking away something you may really wish you had after an accident.
Sometimes that means changing insurance companies.
Sometimes it means adjusting a deductible.
Sometimes it means finding a discount nobody was using.
Sometimes telematics completely changes which carrier makes sense.
Sometimes we review everything and determine that your existing policy is already pretty good.
That is fine too.
What We Look at at PolicyVisor
When we review a Pennsylvania auto policy, we usually look at:
- Current premium and carrier
- Liability limits
- Property damage coverage
- UM/UIM coverage
- Stacking
- Full Tort or Limited Tort
- Medical benefits
- Comprehensive and collision
- Deductibles
- Rental reimbursement
- Vehicle use and annual mileage
- Available discounts
- Driver improvement discounts
- Telematics options
- Home and auto bundling
- Payment options
- Whether an older vehicle still needs comprehensive and collision
Then we look at the options.
The goal is not:
“How cheap can we make this?”
It is:
“Can we make this cheaper without making the policy worse?”
There is a big difference.
Want Us to Review Your Car Insurance?
PolicyVisor is an independent insurance agency serving clients throughout Pennsylvania, including Springfield, Delaware County, and the greater Philadelphia area.
If your auto insurance has gone up over the last few years, send us your current declarations page.
We can review what you have, compare multiple insurance companies, and look for places where you may be able to save without unnecessarily reducing coverage.
Sometimes we find substantial savings.
Sometimes we improve the coverage.
Sometimes we do both.
And if your current policy is already the best option, we will tell you that too.
Disclaimer
This article is for general informational and educational purposes only and is not intended as individualized insurance, legal, financial, or tax advice. Insurance needs, pricing, discounts, underwriting rules, eligibility, and program availability vary by individual, insurance company, and policy. Participation in telematics, driver improvement, or other discount programs may be subject to carrier-specific terms and eligibility requirements. Insurance coverage is determined solely by the terms, conditions, exclusions, endorsements, and limits of the policy actually issued. Nothing on this website binds, modifies, extends, or guarantees insurance coverage or premium savings. Please speak with a licensed insurance professional regarding your specific insurance needs and circumstances.