How to Save on Auto Insurance the Smart Way
  • Benefits Strategy

How to Save on Auto Insurance the Smart Way

“I love receiving auto insurance spam emails!” said no one ever. This is what keeps most of us from looking for better auto insurance. You check a quote one time—one time!—and from now until eternity you’re deleting “Special Offer” emails from your inbox.

But we still do it. Why? Because deep down we know there’s probably a better deal out there. And you’re right; there is. But there’s a method to saving: Your best deals are dependent on four key life moments and one discount most people aren’t aware of.

These aren’t “tricks” or “hacks” or back-alley bargains. They’re just smart moments in life when switching could end up saving you hundreds of dollars on auto insurance premiums every year.  

Smart Moment #1: New Car

There are two approaches to saving on insurance when buying a new car: 1) factor insurance cost into your purchasing decision, or 2) buy the car you want and find the best insurance for that car. If you’re more of a #2 kind of person, skip ahead to After You Buy.

Before You Buy

Expensive cars are more expensive to insure than less expensive cars. Not super complicated. But what most people don’t consider is that different versions of the same car can come with different insurance premiums. The fancier versions of a specific model are usually more expensive to insure—think SE vs. SEL vs. GT.

Safety is another factor to consider. The more airbags, the better. Research has proven they protect drivers and passengers, and most insurance companies offer discounts for specific safety features, like air bags, electronic stability control and running lights. Most of the safety features that qualify for discounts come standard on new cars, so the age of your new or new-to-you car can affect your insurance premiums, too.

Lastly, how likely your car is to be stolen is also considered when calculating your auto insurance. If your car is more popular with thieves—you guessed it, more expensive to insure. Check out Highway Loss Data Institute’s latest report on vehicles that top the most wanted list.

After You Buy

You got the exact car you wanted—that’s great! Now what? Consider bundling. There are three ways to think about bundling:

  1.      Bundle home and auto. Most insurance carriers offer homeowners a discount if they have both policies with the same carrier.
  2.      Bundle your vehicles together. Insuring more than one vehicle with the same carrier will earn you a multi-car discount.
  3.      Bundle your quotes. Get at least three quotes from different insurance companies. Forbes found that quotes for identical policies can vary by almost $1,000.

Smart Moment #2: Change in Relationship Status

Did you know auto insurance premiums are on average 11 percent lower for married couples? No, insurance companies aren’t picking on single people. Studies show people who are married are less likely to get into accidents.

Plus, if you add your spouse and their car to your insurance policy, or if you shop for new policies together, you can qualify for a multi-car discount. These discounts are worth considering, as they can be as much as 25 percent off!1

Smart Moment #3: Teenage Driver

No, adding a teen driver to your insurance won’t save you money. But you can spend less money by adding your teen as the primary driver for the cheapest car listed on your policy. Also, and this is a big one, adding your teen driver to your policy will be much cheaper than covering your teen through their own policy.

If your teen has completed a defensive driving course or meets certain “good student” qualifications, you can save even more. Your teen can qualify for a “good student” discount if they keep a 3.0 GPA or higher, and these discounts can score you up to $300 a year in savings.2

Smart Moment #4: Change of Address

Whether you’re moving across town or to a new state, updating your address on your auto insurance policy is a must, so this is also the perfect time to compare insurance carriers.

Most insurance policy rates vary from zip code to zip code. Insurance carriers take into consideration things like how many people live in your city or neighborhood. More cars mean more fender benders.

They also look at the claims ratio in your area. Lots of stolen vehicles or incidences of insurance fraud can cause premiums to skyrocket. Or if you live in a rural area around a large population of deer, the number of deer-related accidents could cause you to pay more. 

On the bright side, if your commute to work has changed, the reduced annual mileage could mean big savings. This is because insurance carriers figure the fewer miles you drive, the smaller your window of possibility for an accident.

What about moving out of state? Different states have different auto insurance requirements that can affect the cost of your policy, so you’ll want to check your state’s requirements to see if you need more or less insurance. For example: Alaska requires $50,000 of coverage for bodily injury liability coverage per person, while Arizona only requires $15,000.

The Discount Everyone Forgets

In this post we’ve talked a lot about the right time to re-evaluate your auto insurance. Now we want to clue you into an opportunity for savings most people overlook: group discounts through your employer.

Savvy employers know that by offering auto insurance in their list of benefits, they can help their employees save time, money and headaches. We all love one-stop shopping, and since most people already purchase their medical and voluntary benefits through their employer, adding auto insurance is a no-brainer.

How much can you save through these employer-offered group plans? Forbes reports that the savings can be up to $500 a year. If your employer gives you the option to shop for all of your benefits in one place using an enrollment platform like Benefitfocus MarketPlace, start there. If not, reach out to your benefits department or HR team and see what they can do. Don’t let this money go unclaimed.

By being strategic about when you look for new auto insurance options—and by taking advantage of employer-offered group discounts—you can save hundreds of dollars a year. No tricks, no haggling. Isn’t it time you save the smart way?

 

Are you an employer looking to add auto insurance or other specialty products to your employee benefits package? Check out the full BenefitsPlace catalog available through Benefitfocus MarketPlace.

1. https://www.valuepenguin.com/multi-car-insurance-discounts-quotes

2. https://www.thebalance.com/car-insurance-discounts-for-students-527530