Those car-insurance commercials aren’t kidding: A few minutes on the phone really can save drivers hundreds of dollars
A recent Reddit thread entitled “One email saved me $500/year” is a superb reminder of an easy but effective, though often overlooked, piece of personal-finance advice: Switching your automobile insurance can yield many dollars a year in savings, studies show. (We give easy strategies for locating new automobile insurance below.)
The Redditor wrote this: “I was browsing my bank statements and realized that my insurance is one of my largest expenses. I'm a 22-year-old male with one ticket from 2 years ago. I made a decision that I might send an email to my insurance agent asking him to seem @ other companies in hopes of a less expensive policy. Well, this morning he wrote back to me that he had found a replacement policy and that I am going to be saving $500/year! The 5 minutes spent emailing with him is perhaps the foremost profitable time I will be able to have all year.”
He features a point: Numerous studies show that switching your automobile insurance can yield major savings. Research released this year by Gabi, which has data on numerous car-insurance policies, found that a driver could save $865 a year by switching car-insurance providers while maintaining an equivalent coverage. Others find the savings to be less but still significant: A survey by J.D. Power of individuals who’d switched automobile insurance put the savings at $388 per annum, and NerdWallet data show that switching to a special company, keeping an equivalent level of coverage, yields a mean $400 in savings. And WalletHub analyst Jill Gonzalez notes that some drivers can actually save $1,000 or more by switching insurance.
And yet people often don’t shop around for a better-priced car-insurance policy: A survey of 1,300 automobile-insurance consumers by Reviews.com found that 40% said they “rarely” go searching for automobile insurance. “It’s amazing what percentage people don’t bother doing that,” says NerdWallet personal finance expert Kimberly Palmer. “If you don’t go searching, you're losing out on tons of potential savings.”
And because the Redditor acknowledged, shopping around for a less expensive policy that also offers the proper coverage is often (almost) as easy as an email — if you've got a trusted independent insurance broker (versus a captive agent who works for one insurance company). These agents can find you multiple quotes from different insurance companies; they're typically paid a commission by the corporate whose policy you select.
The advantage of using an agent is that they can do the legwork of getting different quotes for you, saving you plenty of time; the disadvantage is that you simply might still be ready to save even more if you are doing the homework on your own. Plus, adds Rory Joyce, the director of development at Credit Karma, some large auto-insurance brands won’t work with independent agents, so you would possibly not be getting quotes from them; however, he adds, that doesn’t necessarily mean you won’t get a great-priced policy from a solid company. And Gonzalez notes that because these agents are commission-based, “they may attempt to sell you a particular policy that would earn them a better commission.” However, she adds: “The best thanks to avoiding this is often by staying focused on getting a policy that most accurately fits your needs.”
There also are a bunch of online tools now which will assist you easily go searching for automobile insurance (experts say you would like to urge three different quotes).
A recent Reddit thread entitled “One email saved me $500/year” is a superb reminder of an easy but effective, though often overlooked, piece of personal-finance advice: Switching your automobile insurance can yield many dollars a year in savings, studies show. (We give easy strategies for locating new automobile insurance below.)
The Redditor wrote this: “I was browsing my bank statements and realized that my insurance is one of my largest expenses. I'm a 22-year-old male with one ticket from 2 years ago. I made a decision that I might send an email to my insurance agent asking him to seem @ other companies in hopes of a less expensive policy. Well, this morning he wrote back to me that he had found a replacement policy and that I am going to be saving $500/year! The 5 minutes spent emailing with him is perhaps the foremost profitable time I will be able to have all year.”
He features a point: Numerous studies show that switching your automobile insurance can yield major savings. Research released this year by Gabi, which has data on numerous car-insurance policies, found that a driver could save $865 a year by switching car-insurance providers while maintaining an equivalent coverage. Others find the savings to be less but still significant: A survey by J.D. Power of individuals who’d switched automobile insurance put the savings at $388 per annum, and NerdWallet data show that switching to a special company, keeping an equivalent level of coverage, yields a mean $400 in savings. And WalletHub analyst Jill Gonzalez notes that some drivers can actually save $1,000 or more by switching insurance.
And yet people often don’t shop around for a better-priced car-insurance policy: A survey of 1,300 automobile-insurance consumers by Reviews.com found that 40% said they “rarely” go searching for automobile insurance. “It’s amazing what percentage people don’t bother doing that,” says NerdWallet personal finance expert Kimberly Palmer. “If you don’t go searching, you're losing out on tons of potential savings.”
And because the Redditor acknowledged, shopping around for a less expensive policy that also offers the proper coverage is often (almost) as easy as an email — if you've got a trusted independent insurance broker (versus a captive agent who works for one insurance company). These agents can find you multiple quotes from different insurance companies; they're typically paid a commission by the corporate whose policy you select.
The advantage of using an agent is that they can do the legwork of getting different quotes for you, saving you plenty of time; the disadvantage is that you simply might still be ready to save even more if you are doing the homework on your own. Plus, adds Rory Joyce, the director of development at Credit Karma, some large auto-insurance brands won’t work with independent agents, so you would possibly not be getting quotes from them; however, he adds, that doesn’t necessarily mean you won’t get a great-priced policy from a solid company. And Gonzalez notes that because these agents are commission-based, “they may attempt to sell you a particular policy that would earn them a better commission.” However, she adds: “The best thanks to avoiding this is often by staying focused on getting a policy that most accurately fits your needs.”
There also are a bunch of online tools now which will assist you easily go searching for automobile insurance (experts say you would like to urge three different quotes).