It pays to shop around for auto insurance

In general, talking to insurance agents isn’t on top of people’s lists of enjoyable things to do. But, having just moved, I took the opportunity to shop around for car insurance. I’d been with Traveler’s for over seven years and, like many people, had just the renewal put it on autopilot.

But I was very happy to find that I was able to decrease my insurance costs by ~$500/year by switching providers. I was also surprised at the range of quotes. Below are some that I received, just to give you an idea:

Company	6-month quote
Traveler’s	$588.00
GEICO	$345.70
State Farm	$738.00
Progressive	$640.90

I won’t go into the specifics of what my coverage entails (though you can feel free to contact me if you’d like more details), but suffice it to say that they’re set pretty high (like most finance-types, I err on the conservative side) and are consistent across the quotes. These are for two drivers and a single car, quoted before I bought my new one, though was glad to know that the addition of another car actually decreased the per-car rate due to the multi-car discount.

It also turns out that (at least in my situation), having insurance in California was cheaper than having coverage in Washington state because Washington’s required Personal Injury Protection (PIP) costs a lot of money. And, I suppose the acturaries who work in these companies come up with their own proprietary way to calculate risk, since they all ask different questions regarding your habits and characteristics during the application process, and perhaps this is why the quotes can range by hundreds of dollars.

Some other things to consider when buying auto insurance:

1. On an older car, what’s the replacement value? How does the insurance company determine this value (e.g. blue book, etc.)? What then might be a reasonable deductible to have on your older car?
2. How does the company handle claims and service?
3. What sort of discounts are there for multiple vehicles, being part of a professional association, having multiple policies, etc.? (Note: Readers might know that GEICO is part of the venerable Berkshire Hathaway group, and shareholders can receive a discount. But, there are other discounts that you may qualify for that supercede this one and that aren’t combinable, so it’s worth asking.)
4. Does the insurance company offer special features that you’re looking for? For example, GEICO’s Mechanical Breakdown Insurance (MBI) has a few restrictions on eligibility, among them, being insured under GEICO.
5. Will any upcoming events affect your quote? For example, most companies can give you a fairly accurate quote for a car you’re thinking of buying, even if you don’t have the specific VIN.

It’s probably obvious, but I ended up choosing GEICO on the basis of their price, reputation, and service. I’ve been quite happy with it so far, and they have a very useful web presence where I can download documents, pay, and view my policy anytime I want.

Shopping around for car insurance isn’t as onerous as it sounds. With all the commercials you see on TV, you can probably tell that competition has increased, and it seems insurance companies have become much more customer-service oriented. Quotes also take no time at all, maybe 10 minutes at the max over the phone or online. Not even a day’s work to save a few hundred dollars is worth it, don’t you think?

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