Find the Best Auto Insurance Quotes and Companies with These 7 Essential Tips

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quick highlights

Bundle your policies: get the discount by combining your home or renters and auto insurance

Shop Around: different companies give different discounts

Beware: ultra cheap auto insurance may not give good claim service

I’ve been in the insurance business for 11 years. 

In that time, I’ve helped a lot of folks get the best auto insurance they could afford.

Some of the things I’ve learned will help you save money, get better coverage, and maybe even save you from financial disaster!

Perhaps you're comparing quotes and companies for your first policy or looking to save on existing coverage.

#1 - Best Auto Insurance May Not Mean Lowest Rates

Price is NOT king.

You are conditioned by insurance advertising to put price above all other factors.  

This is dumb.  

Why?  

Because you are probably going to be missing out on some things if you are only a price shopper.  

I’m not saying price isn’t important, it is very important.  

What I am saying is if you're looking for the best auto insurance, put the price in its proper perspective.  

Price can come at a cost.  

Coverage issues, claims management issues, and customer service are generally the problems caused by a policy that is too cheap.  

Insurance companies are looking to make money, so if they can’t charge enough to cover the overhead and make a profit, then they will find ways to cut costs on the back end.

Here is a sad story...

Last winter, my friend Joe decided he wanted to save some money on his auto insurance. 

He is paying $40 a month for his 2019 Honda Accord with All State Insurance.  

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He thought that was a lot and he could do better.

So he calls around to a couple local independent insurance agencies in town.  

Mike, the local agent who just started his insurance career last week, gets on the phone with Joe and tells him “Joe, I can cut your costs, just give me your current insurance info and I’ll go find you some quotes”.  

Mike comes back with what appears to be a great quote.

Dodo Definitions

insurance terms explained:

Independent Insurance Agency:  You can buy insurance from an indendent agency but they represent other companies (typically several).  For example, an independent agent who works for Acme Insurance Agency might sell you an auto insurance policy insured by Travelers Insurance.

Low price?  Indeed!  

So he makes the switch.  

Joe calls his local AllState agent, Sallie, and tells her to cancel the auto insurance policy. 

Joe knows in his heart that he would never have a claim and insurance is a rip off, so he is going with the lowest price he can find.  

Sallie at All State warns him that not all insurance companies are the same, so he should take care in making this decision.

 Joe didn’t believe her… heck, he is saving $5 a month!  

That's $60 a year!  

Not a bad deal, until this happened...

Last week I got a call from Joe. 

A month ago, he had run the Accord into a tree when he swerved to avoid a cat in the street.  

He can’t get his insurance claims adjuster to call him back.  

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"The best auto insurance doesn't always mean the cheapest" Insurance Dodo

He has left 30 messages and nobody is returning his calls.  

The car is in the shop and the mechanic is telling him he either needs to pay for the repairs himself, or have a tow truck come and get the car out of his shop.  

The rental car company said his coverage has run out and now he will need to start paying for his rental out of his own pocket.  

That is going to cost him $30 a day moving forward.  

Total headache!  

He is going to call the Department of Insurance and see if they can help.  He is losing his mind over the situation.  

He’s super busy with work and his family and just doesn’t have the time to deal with his auto insurance claim.

Joe said if he knew this was the cost of saving $5 a month on his auto insurance, he never would have switched!


Compare Policies

Action Item:  When comparing auto insurance companies, don’t decide based on price alone.  Get two to three quotes, then call or chat online with the company and ask about their claims process.  Does it sound easy and reliable?  You can get started comparing quotes here. 


#2 - To Bundle Or Not To Bundle... That Is The Question

Insurance companies know that if you buy more than one line of insurance from them, you are going to continue to be their customer for seven to nine times longer than if you are only buying one line of coverage. 

Like anyone in business, they know it's better to keep a customer long term than trying to find new ones all the time.  

This is why they give a nice discount to customers who bundle their home and auto together.  

15% in some instances.  

If you can do it, give them that renters or homeowners insurance policy too.  This is a legitimate way to save money without sacrificing.

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#3 - Bought A New Car? This Section Is For You...

Someone told me once that a new car loses 20% of its value the minute you drive it off the lot. 

Immediate depreciation can be a problem if your new ride gets totaled a week after you buy it.  

The dealership knows this, so they are going to offer you ‘gap coverage’ as a part of your sales package.  

Don’t buy it from them!  

It's a rip off!  

Call your insurance agent and ask them about adding GAP coverage to your policy.  

Comparison quotes are quick, easy, and free!

I can almost guarantee your insurance policy will have better pricing than whatever coverage you can buy from the dealership.

The dealership is also going to offer you coverage for theft. 

Don’t buy it!  

You will have theft coverage from your auto insurance policy’s Comprehensive line of coverage for a lot less money.

tips for success!

Dodo Tips

Want to save money longterm?

When buying auto insurance, take a 12-month policy term. Most auto insurance companies want to sell you a 6-month term.  Lock in your rates for as long as possible. If you get a ticket or cause an accident, it will give you time to take driving school or shop around before your next renewal.

#4 - Saving on Comprehensive And Collision Insurance

One of the biggest wastes of money in auto insurance is people who have Comprehensive and Collision coverage on a vehicle with a lot of miles on it or over 10 years old. 

These coverages both have deductibles and Collision coverage specifically can be very expensive.  You must understand a few things when you are insuring your car for “physical damage”:

  • The claims adjuster is going to offer you the “actual cash value” of your car if it's totaled. Actual Cash Value is also known as depreciated value.  Claims adjusters decide on a settlement offer by researching and seeing what other similar cars are going for in your area. They also look at the Kelly Blue Book for values.  Then they make you an offer, minus whatever deductible you have on the policy.
  • In my opinion, insurance is only for large losses you would otherwise be unable to handle in absence of it.  So if you have $5,000 in a savings account and you would be able to make a down payment on a new car if your current car was totaled, you could withstand the loss of your 10 year old car.  You do not need the insurance company’s help with that type of claim, so you are wasting your money by carrying coverage that you do not need.
Dodo Teaching Numbers

Let's looks at a simple example...

Your 2010 Toyota Corolla with 150,000 miles on it has a Blue Book Value of $3,400. 

You’ve been carrying comprehensive coverage and collision coverage with a $1,000 deductible for the past three years at $1,100 a year, for a total of $3,300.    

The insurance costs $1,100 a year and you have a $1,000 deductible on each coverage.  

You are automatically out $2,100 before you can have coverage apply.  

Then you have an accident and the car is totaled.

The claims adjuster offers you a settlement of $2,400 (which is the Blue Book value minus your $1,000 deductible).  

So you are now able to use that $2,400 to buy a different vehicle.  

Let's look at this a little closer:  if you had gone without comprehensive and collision for the past few years, you could have saved $3,300. 

Since your settlement was only $2,400, you would have actually come up with an extra $900!  

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#5 - Ask for "OEM Replacement Parts"

Some of the best auto insurance companies still cut corners to save money.

One of the ways they do it is replacing parts on your car with inferior parts to the ones your original manufacuturer used.

When you’re shopping for quotes, find out if OEM (manufacturers) replacement parts would be used on all repairs of your car.

You want the original OEM parts instead of cheap replicas.  Some insurance companies will give this if you pay a little extra.  

If you are trying to resell your vehicle at some point in the future, having the repairs with OEM parts is going to make a difference in the selling price you are able to command.

#6 - Grab the “Waiver Of Collision Deductible”

Believe it or not, there are a lot of people running around without auto insurance. 

According to the Insurance Information Institute, 13% of all drivers in the United States do not carry auto insurance at all. 

This is a lot of people!  

Think about it; out of the last 100 cars you saw on the road, 13 of them didn’t have insurance coverage whatsoever.  

The top 5 states for highest percent of uninsured motorists are as follows:

State

Percentage of Uninsured Motorists

Florida

26.7%

Mississippi

23.7%

New Mexico

20.8%

Michigan

20.3%

Tennessee

20.0%

Here's the problem: 

Normally, if someone else hits you who has insurance and they are at fault, their insurance has to pay for all the repairs.

But if they're uninsured, that burden can fall on you!!

Enter the "waiver of collision deductible."

If you have a waiver of collision deductible on your policy, it will protect you from uninsured motorists and it's usually super cheap. 

I think my insurance company charges $13 a year for it.  

Dodo Definitions

insurance terms explained:

Uninsured Motorist-Bodily Injury:  This is protection for you and your passengers. If someone without insurance or with very low limits causes an accident and you go to the hospital, this coverage pays your medical bills. It also pays the bills of your passengers. Since most people who don't carry auto insurance have very little money to begin with, they aren't going to have money to pay for your hospital bills out of pocket.

Normally when you get in an accident you have a deductible you have to pay like $500 or $1,000, then the insurance company picks up the rest of the bill.  But you won't have to pay a collision if you have a waiver of collision deductible and are hit by an uninsured motorist.  

Hence it is "waived” by your insurance company.

I had this happen to me once...

About 10 years ago, my wife and I were on our way home from watching the “Passion of the Christ” movie.  

Of all things!  

It was a dark and stormy night… and we were at the bottom of a long off ramp, about to turn right, when we heard a squealing noise getting louder and louder, coming from behind us.  

Then… BOOM!

We were hit from behind!  

We pulled off to the side of the road, the other guy got out of his car and we started talking to him.

He said we could follow him to his house and he would give us some money.  

He was obviously drunk.  

We ended up calling the cops, who showed up and arrested him. 

We filed a claim with AAA Insurance and had the claim 100% covered because the other driver was uninsured and we had the waiver of collision deductible coverage on our policy.  

Totally worth the $14 a year!

don't be a dodo!

Don't Make this Dodo Mistake

Watch out for this mistake!

Don't buy auto insurance with super low liability limits.  If you cause financial damages to someone, your insurance company may be limited in how much they will pay, but that doesn't mean your responsibility ends there. The party you damaged can come after YOU for more than what your insurance company paid out. Protect your nest!  Buy as much liability coverage as you possibly can.

#7 - Tracking Software Discounts May Not Actually Save You Money

Big data is a big thing now. 

Everyone’s data is gathered and some of the best auto insurance companies use this data to make decisions on how to approach you.  

Insurance companies love big data.  

They use it to make more intelligent choices on premium pricing and risk.  

Remember one thing: insurance companies want to make money.

Many of them are traded on the stock market, so they need to give good results to their shareholders.  

Insurance companies use data to make decisions about you when they price your insurance. 

Up until now, they could only do limited things to price your auto insurance.  

One of the metrics they use is to ask your estimated annual miles driven.    

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Insurance companies crunch the numbers to find ways to "save" you money? Think again!

They have a problem because most folks cheat on their estimates in order to pay less.

This is a really big problem for them because they can’t get around the artificially low estimates.  

Enter the age of tracking software and the offer of a discount...

Insurance companies now offer a discount to policyholders in return for allowing them to install a tracking mechanism into the vehicle, which tells the insurance company exactly how many miles are driven, how fast you accelerate and how hard you brake. 

It's been proven that vehicles that are driven fast and brake hard are more likely to be involved in accidents.  

It's a no brainer that the insurance companies would want to know this information so they can price in this additional risk that they are assuming.  

The application of a tracking mechanism into your car in return for a ‘discount’ may sound good to you. 

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It may be good for you.  All I’m saying is that you probably drive more than you think you drive.  

You may also have a lead foot; accelerating fast and braking harder than you should.  

If this is you, a tracking mechanism is going to end up costing you more than you save on the ‘discount’ because the insurance company will know you are more likely to have an accident due to your driving habits.


Action Item:  When you are offered a tracking discount during the quote process, ask a rep how much of a discount they would give. If you pay $1200 a year for auto insurance and your discount is going to be 5%, then that is $60 a year. If that seems worth it to you because you drive like my grandma (rarely and slowly), then this is a good deal.  You can get started comparing quotes here. 


Bonus:  Named Driver Insurance Policies

A bonus tip for reading this far:

Some auto insurance companies like to hide some coverage gaps.  (I know, weird, right?)

One of the nasty ones is this concept of drop down limits on your coverage when an unlisted driver is involved in an accident when driving your car.

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The best I can do to explain this one is to tell a story...

Margaret and Suzy are friends and neighbors. 

Suzy doesn’t own a car.  She asks if she can borrow Margaret’s from time to time.

Margaret, who works from home and doesn’t drive all that often, agrees to allow Suzy to borrow the car whenever she needs it, not thinking about insurance coverage.

Wouldn’t you know it, but Suzy no sooner pulls out of the driveway than she knocks down Ethel Murphy, who is 78 years old and has a bad hip. 

Suzy is obviously at fault, so Margaret, being the owner of the vehicle files for coverage with her auto insurance company.  

The company recognizes the liability and finds out it was Suzy, an unlisted driver, who was behind the wheel at the time of the accident.  

Since they have a "named driver limitation" on the policy, the full liability limits only apply if someone who is specifically named on the policy is at the wheel when the accident occurs.

If you aren’t listed, they only pay $15,000 per person in bodily injury and a total of $30,000 per accident.

These are the minimum liability limits required by law to be carried.

Since Mrs. Murphy’s hip was broken and she spent four months in a long term care facility waiting for her injuries to heal, the $200,000 in uninsured medical care she incurred will be coming out of the personal bank accounts of Margaret and Suzy.  

Look out for these types of policies!

So that is it, all I can tell you about auto insurance. 

Some ways to save money, some basic ideas on how to approach insurance in general, and ways insurance companies might hurt you by including or excluding coverage you never even thought about.

 Good luck and be safe!

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