How I Slashed My Car Insurance Rate by 19 Percent in 2 Steps

I recently paid my latest car insurance bill — and it felt good.

Now, don’t get me wrong: My household wasn’t pleased to part with $575. But it’s nice to know we’re getting a decent rate — thanks to having shopped around six months ago — rather than wondering if we’re getting gouged.

It was also a relief to see that the bill — our second from our new insurer — had not risen one cent.

Last year, we switched car insurance companies because our prior insurer had been raising our premiums every six months for a couple of years. Now, we only wish we’d shopped and switched insurers sooner.

By shopping around, we saved about 19 percent, or $263 a year. And it wasn’t difficult or time-consuming. We just did a little research online — the whole process boiled down to two steps.

1. I got quotes from 2 other insurers

Our journey to a lower car insurance bill began with getting quotes from two auto insurers. Then, we compared those costs to what it would have cost us to renew with our old insurer.

We limited the search to two companies to keep it simple. My husband and I looked over the two insurance companies’ websites. Then, we entered our information, examined available discounts and fiddled around with policy options to find out what each company would charge us. This took maybe 10 minutes.

Both companies quoted us premiums that were lower than our old insurer would have charged us. So, we decided to dump our old insurer and chose one of the two new candidates.

Once we had made the decision to change, we moved on to tweaking our policy options.

2. I tweaked our deductible

Before looking over policy options, I asked my husband to read “The Complete Guide to Getting the Best Possible Deal on Car Insurance.” The article, by Money Talks News founder Stacy Johnson, is the best primer I’ve seen on scrutinizing every line of your insurance policy.

The article also emphasizes that raising your car insurance deductibles is one of the best ways to lower your premiums. And raising my deductibles was the main thing I wanted to change about my policy.

I was weary of paying a premium that I knew we could lower by simply raising our $250 and $500 deductibles. And I was tired of listening to my former-auditor husband veto that change with talk of “what if’s.”

So, I put my foot down, and I put it to him something like this:

“An accident is indeed a possibility, but a premium is a certainty. Do you really want to commit to the certainty of paying more money every six months just because of the possibility of an accident?”

All of our deductibles are now $1,000.

Other aspects of our policy that we looked at but decided not to change include:

• Comprehensive and collision: We considered dropping this coverage because our car is 9 years old. But we decided to keep it after doing the math — going by the 10 percent rule of thumb that Stacy explains in his article.
• Personal injury protection: We made sure this coverage was no more than $10,000 — the minimum required in our state — for the same reason that Stacy cites.
• Uninsured motorist: We opted to continue paying for this coverage. We live in Florida, which has a larger share of uninsured drivers than any other state, according to the Insurance Information Institute.
• Payment frequency: We opted to continue paying our bill in full every six months rather than making monthly payments. Like many companies, our new insurer cut us a little break for this. If you can’t swing a full payment, consider using a budgeting program like YNAB (short for “You Need A Budget”). It’s designed to help you break the cycle of living paycheck to paycheck.

The bottom line

This story stems from a personal experience, but the bottom line is universal: Anyone can save money by shopping around for car insurance — and the process is simple and easy.

In fact, you don’t even have to do the first step of gathering quotes yourself. There are now free services like Gabi and The Zebra that will do it for you and give you a report on what rates various insurers would give you.

Even if you’re OK with your current rates, consider comparing rates every year or two nonetheless. You will never know if you could pay less until you shop around.

Stacy wrote in his article that he shops around for home and car insurance one year and health and life insurance the next year. So, he checks up on each policy every other year.

My household hadn’t shopped for car insurance in nearly three years, so we were overdue. If you, too, haven’t compared rates in a while, check out Stacy’s article for all the policy factors you might want to consider. Then, start shopping.

What’s your experience with trying to lower your car insurance premiums? Share with us by commenting below or over on our Facebook page.