My embarrassing insurance confession
Posted
Nov 05 2007, 12:45 PM
by
Donna Freedman
Rating:
Time to admit to being a dunderhead: I've been way overpaying for auto insurance for the past few years.
Worse, I discovered that I didn't have coverage I needed (uninsured driver) and was paying for insurance I probably didn't need (collision).
All of this cost me $98 a month, or $1,176 a year.
Confession is good for the soul, but it's embarrassing when done in print. I'm doing so in hopes of inspiring readers to check their own policies and make a few calls.
As incentive, let me point out that my new plan will save me almost $700 a year.
Like I said: way overpaying.
How much per month?
I've had the nagging feeling that I could do better. But life has been so hectic that "get insurance rate quotes" kept getting pushed to the bottom of the to-do list.
When an Allstate ad sheet was delivered with the newspaper, I decided it was time to deal. An Allstate agent here in Seattle told me I could combine renter's and auto insurance for a total of $1,056 a year, or about $88 per month for both. I’ve been paying a little over $107 a month for renter's and auto, from two different companies.
A State Farm agent offered a renter/auto package for $83 a month. This was getting better and better. To get quotes from several companies at once, I next called a local insurance broker. The agent spent almost five minutes telling me why I should buy medical coverage, then suddenly said he had to take another call and would phone me back. He never did.
An MSN Money article suggested calling a couple of "phone-based" companies such as Geico and Amica in addition to traditional insurers. Since I'm currently an Amica customer, I skipped them. My call to Geico produced a quote of $323 for six months, or just under $54 a month. That sounded pretty darn good and I almost accepted it on the spot, thinking it couldn't get any lower.
Wrong.
The Net casts a wider net
One of that day's MyPoints solicitations was for NetQuote, an insurance-comparison Web site. Quotes were being e-mailed to me within minutes of filling out a form. The figure "$247" got my attention, so I called the company that offered it, Response Insurance.
Here's the beauty part: The quote actually got a little smaller after I talked to the agent. I wound up paying $242 for a six-month premium, or a little over $40 per month. This does not include renter's insurance, since Response covers autos only. (My next chore should be looking for a better deal on coverage for my apartment.)
I bought at the levels suggested by an MSN Money article, namely liability coverage of $100,000 for property, $100,000 per person and $300,000 per accident. I also added uninsured motorist coverage.
My previous coverage had been only underinsured driver coverage. If I'd been hit by an uninsured driver, I'd have been out of luck.
I'd also been paying for collision coverage on an almost seven-year-old Chevy that's losing blue-book value by the minute. No longer.
An article at insure.com offers a state-by-state list of required minimum auto insurance levels. Other levels of coverage depend on the individual. Another MSN Money article suggests that some people could drop everything but liability on older cars; however, this is not the right decision for everyone.
You'll want to read the policy thoroughly to make sure you're getting the coverage you need. And don't cancel your current insurance until you're happy with what you've just bought.
To check out a company before signing on, use the link offered by Kiplinger.com to A.M. Best's insurance company ratings site. Kiplinger's also offers a link to state insurance regulators, which will let you check the number of complaints, if any, filed against your company.
It's boring, but read it anyway
You'll want to read the policy thoroughly (which I obviously hadn't done with my current insurer) to make sure you're getting the coverage you need.
Don't cancel your current insurance until you're happy with what you've just bought. My new policy should arrive within a couple of days; until then, I'm still covered with my old company.
Here's another good reason to call around for a rate quote every couple of years: Your premium may be dropping all by itself, according to an MSN Money article. Here are some changes that could lead to better rates:
- Getting married
- Reaching the age of 25
- A job change that means a shorter commute
- Moving to a place with less crime
- Having three or more years elapse since an accident or moving violation
- Repairing a poor credit rating
Like many Americans, I hadn't really paid much attention to my car insurance statement. So please learn from my mistake, and make a few phone calls.
Here's hoping you're as pleasantly surprised as I was -- and here's hoping that none of us end up needing to file any claims.
