The Auto Insurance Game - Aberdeen Times

By: Dr. Patricia Williams (Muirhead)

I was shocked but not surprised when I received my auto insurance renewal notice. No accidents, no tickets and yet the premium was 25% higher. This is typical of most insurance companies. They reward good driving records with higher premiums. When you call and ask them why, their stock answer is, “our costs have risen.” If you believe this, I have a bridge to sell you in Brooklyn.

Unless a premium is lower (and once this actu-ally did happen), anytime I receive an auto or home insurance renewal notice, I submit it to various agen-cies for the lowest bid. Currently, I work with 4 agen-cies. One of the agents who knows me well, will ac-tually shop the insurance policy before sending me the renewal notice advising me that such-and-such company will offer me a lower premium than the company I’m currently with.

This morning I contacted the 4 agencies to ask for an auto insurance quote. All 4 came in with quotes 25% to 27% lower than my current policy. Ironically, 2 of 4 quotes were from the same company I am with now.

Following are other lessons I learned that are part of the Insurance game.

1. Never leave your credit card on ﬁle with an insurance company. They will charge your card for the renewal premium and send you the receipt as a fait accompli.

2. Don’t sign up with a company that offers only 6-month policies. My experience is that for the second 6 months of the year, your auto insurance premium will be signiﬁcantly higher. Go with a company that offers a 12-month insurance policy.

3. Check for duplicate coverage. For example, if your auto manufacturer or AAA covers towing charges, you can decline your insurer’s coverage for this service.

4. Check for unnecessary coverage. The agent for my new policy reviewed my old policy to make sure I would have equivalent coverage. She noticed I had been paying for coverage from work loss. Very interesting since my husband and I are both retired.

5. Ask your insurer if you can lower the premium by reducing coverage on certain items. For ex-ample, you might have “stacked” coverage on un-insured motorists. What does this mean? Let’s say you insure 2 vehicles and you have coverage if hit by an uninsured motorist of $250,000 each person and $500,000 each accident. If your insurance is “non-stacked” the coverage is as speciﬁed. If it is “stacked” and you’re insuring 2 cars, this increases the coverage to $500,000 each person (2 x $250,000) and $1,000,000 (2 x $500,000) each accident. You pay a higher premium for “stacked” insurance.

6. If you are a good driver and have not had any claims within the past few years, you might consider increasing your deductible (for example, from $500 to $1,000). This will lower your premium.

The take-away message: Treat insurance policies the same way you would if you purchase a car, a home or a pair of jeans. Shop around for the best deal.