“Insurance,” the mere mention of the word has the potential of triggering memories of unhappy phone calls wrangling with people in some distant call center. Insurance in all its forms seems to be accompanied with thoughts of expensive premiums and unfeeling corporate entities. Friends who own vacation property were recently complaining about the inability to control the annual increase in premiums.
Insurance can be frustrating…until…you need the benefits it provides. Insurance can be frustrating…unless…you have a great agent or broker who is meeting the needs you have. No matter how frustrating or calming insurance may be, there is the ever present need to control the everyday expenses of life.
Today, we will offer a few thoughts and steps that may help control the everyday expense of automobile insurance.
First, be careful about the auto(s) you drive! If you have already purchased a car and do not need one, there is not much you can do to change things. However, if you are shopping for a vehicle, or will be in the near term, you can save money by thinking now. Some people purchase cars as basic transportation, but most do not. Most people choose a car based on how the car makes them feel as they drive or how they feel about themselves.
Purchasing “the next model up” may help confirm how we feel about our recent promotion or business success, but it will also likely result in disappointment over the insurance bills. The exhilaration of the auto that can go from 0 to 60 in under 4 seconds will raise our endorphins as we cruise the highway or hug the turns of “the Dragon.” However, it will increase the serotonin level each time the insurance bill comes due.
One consideration that is often overlooked is, “Is the car I want among those more likely to be stolen?” Honestly, I have never had a car stolen. I have occasionally forgotten where I parked and worried briefly! However, if the car we want is among those that are prone to theft, we will pay for more for insurance every day we own it. The National Insurance Crime Bureau annually reports on the popular models for theft. Is that car in your driveway and your checkbook?
Second, get multiple quotes! One habit almost every family has is not regularly shopping for lower premiums. We are prone to stay with the company with which we have had our insurance. Many families are influenced to use the same company for auto and home insurance that parents or other family members use. Sometimes, we know a friend “in the business” and it is easy to use their service.
While there is something to be said for the emotional comfort we receive from the familiarity of all these arrangements, the emotional comfort may not make financial sense. When we are working to reduce the everyday expenses of life, getting quotes from other companies makes sense.
Learn about behavior-based discounts! Good drivers with clean records help insurance companies make money. Most are more than willing to share a portion of those funds with you if you are willing to ask what needs to be done to receive them. Some companies simply offer a discount based upon several years of clean driving. Other companies have plug-in devices that record how the car is driven. A few have smart phone apps that track your car by GPS and report your driving habits. This means they will track how fast you get away from the stop light, and how sudden your deceleration is before making a turn.
These are only three of many ideas on reducing auto insurance costs. Others seem a bit more drastic, like moving closer to your work (buying a bigger house with money saved from auto insurance is not a good idea). Some seem very simple, like taking a defensive driving course. One that is simple, but sometimes overlooked, is to change your limits and increase the deductible. The point is that we are NOT trapped into an expensive auto insurance situation. We CAN reduce everyday expenses. Start today!
Here is to living financially free and pursuing our passions!