Ways to Save Money on Car Insurance

Commercials touting potential savings for auto insurance are among the most prolific forms of advertising on many television networks. Whether promoted by cavemen, lizards, television stars or actors portraying themselves as average middle-class consumers, the theme is the same – “Shopping your auto insurance with us will result in significant savings.”

The question thus begs – do these potential savings become realized savings for those who shop their auto insurance on a regular basis? The answer is a definite maybe.

While insurers spend a lot of money to develop name recognition for their brand and their auto insurance products, for the most part the process of obtaining an auto insurance quote is pretty much standardized.

Auto insurers basically take a snapshot of a potential customer’s life and driving habits in producing a quote for auto insurance. This snapshot incorporates everything from an “insurance score” (the industry’s code-word for using one’s credit score as an indicator of how likely one is to file a claim in the future), to the distance one drives to and from work, and whether any speeding or other violations show up on the potential customer’s driving record.

Because these variables can change over time, those drivers who routinely shop their auto insurance when the policy renews stand a much better chance of realizing savings on their auto insurance premiums.

While insurance companies spend relative fortunes in advertising to lure new consumers to shop their auto insurance, there are almost no programs in place to re-price the premiums paid by existing customers.

When was the last time you saw a television commercial touting a consumer who shopped their auto insurance, called their current insurance agent and got their premiums reduced to match the lower offer?

It is an unfortunate fact of life that the only practical way to realize reductions in auto insurance premiums is to switch companies. Insurance companies appear to seldom review current clients to determine if they are eligible for discounts offered to new clients.

The vast majority of consumers do not take the time to shop their insurance at every renewal, and companies take advantage of this aspect of human nature. When it comes to obtaining auto insurance quotes from several companies, be sure to offer complete information regarding all drivers and any violations and accidents related to those drivers, all vehicles, and how those vehicles are used. Assemble the information in writing – that way you can fax or e-mail the data to several companies at once without having to assemble the information time after time.

While some auto insurance companies have begun writing contracts on a twelve-month basis, most auto insurance policies renew after six months. This can give the driver the opportunity to shop for favorable premiums twice a year. In short, switching car insurance can be a viable way to save money if one approaches it in a systematic manner.

Though there may be renewal periods where you will not see any savings by shopping, consumers who regularly shop their auto insurance will stand a much greater chance of appreciable savings, especially when one considers that over a 50-year driving span, the typical consumer will see his or her auto insurance renew 100 times.