This is a guest post.
It is amazing how many advertisements we see in the media everyday claiming how much we can save on our car insurance. Geico is claiming savings of 15%, State Farm is saying we can save hundreds of dollars. Why are we missing out on these savings?
There are 3 good reasons why we end up being over charged for car insurance, and put in the position to save hundreds of dollars on car insurance:
Our Cars Get Older
There is a good chance the last time we received a quote on car insurance our car was worth a lot more money. Edmunds claims your car loses almost 10% of its value when you drive your car off the lot. After 1 year the value of your car drops about 20% and after 3 years about 40%.
As your new car drops from $20K to $12K after 3 years how much have you seen your car insurance premiums drop? It is likely your car insurance company is not calling you every 6 months offering you the reduction of saving you should see.
To match the drop in the value of your car it is good idea to keep your current company honest by asking if your premiums are in line with the value of your car. Another good way to save money as your car gets older is to increase your collision and comprehensive deductibles. To learn more about the right level of coverage visit full coverage auto insurance.
The Amount We Drive Changes
We all have changes with how much we need to drive on a monthly basis. Maybe we have changed jobs where our commute is shorter or possibly we are working from home a few days of the month.
With the increase in gas prices some of us have decided to take care of our errands more efficiently by lowering our daily trips. The mileage we drive is an important factor in setting our car insurance prices.
Has your car insurance company been checking up to see if your mileage has changed? Car insurance companies are adopting usage based car insurance programs where they advertise savings as much as 50%. By looking at car insurance as a variable expense based on miles driven car owners can drop the cost of auto insurance.
Some Companies are More Cost Effective
A third area we don’t hear much about is how car insurers are able to more effectively manage their cost. This can relate to different types of cost.
For instance, if a car insurance company has aggressively taken in new customers they may see an increase in claims where their expenses go up.
Another common area is the cost of doing business increases. This can be from inflationary pressures or a pickup in overhead. A company like Geico who has a direct business model and less overhead in the form of offices and fixed cost is better able to keep their cost low and maintain competitive pricing.
A good way to find out which car insurance company is effectively managing cost is to receive multiple quotes from several different companies.
This is a guest post.