Car insurance

How do I save money on my insurance?

DaveGragg Car insurance, Home insurance, Insurance agent, Uncategorized , ,
Insurance rates were last seen hanging out with these two. I’d normally give credit for the photo, but I found it on Reddit. It’s Willie Nelson and Snoop Dogg. In Amsterdam. You do the math.

I’ve been getting a lot of calls lately, from my clients as well as folks with other insurance companies.

“Why is my car/home insurance so high?”

It’s a fair question.

There are two reasons rates keep getting higher and it’s true for both home and auto insurance.

1) The number of claims is going up. (You can blame bad drivers and climate change for that)

2) Claims are getting more expensive. (Inflation, worker shortages and supply chain issues get the credit here)

To put it another way, insurance is a way of spreading out the pain. And there’s been a lot of pain to go around lately.

So, the question becomes, “How do I save money on my insurance?”

1) Get a local agent. Yes, I am an agent and yes, this one is a bit self-serving. But we’re specialists. Find a couple of specialists and ask them for quotes. Make them explain what coverages they’re recommending and why. Go with the one who can come up with the best combination of price and coverage.

You won’t get that from an 800 number or a website.

An agent can also help you decide whether decide whether anything else on this list makes sense for you.

2) Take a look at your deductibles and other “extras” like rental reimbursement.

This one comes with a really big caveat: Don’t lower your liability limits or how much you’re insuring your home for. Rates are going up because you’re more likely to need your insurance. Now is not the time to start skimping.

That said, you will be able to save money by raising your deductible. You’ll have to decide whether the lower premium is worth the higher risk.

If raising your car insurance deductible from $500 to $1,000 saves you $60 a year, keep the $500 deductible.

But if raising your home insurance deductible from $1,500 to $2,500 saves you $300 a year? That’s probably worth it.

And if there are two drivers and three vehicles, do you really need rental reimbursement on your auto insurance? Or would you be able to use the third vehicle?

3) Credit score. Yeah, sorry, that one affects your rate, too.

Underwriters say there’s a correlation between how well you keep track of your finances and how likely you are to have a claim.

So, if your life is more stable than it was when you first started your insurance, it may be worth asking your agent for the company to rerate you based on who you are now.

And if you’re asking around for quotes, make sure the agent checks whether it’s cheaper to put you or your spouse as the first named insured (That’s whose credit they’ll check).  

BTW, it is considered a “soft hit” so getting an insurance quote doesn’t affect your credit score.

4) Discounts. This the one that all the ads like to talk about. And a local agent can help find discounts you didn’t know you qualified for.

A quick rundown of a few you may not know about:

  • Bundling (Package several types of policies like home, auto, life, business, boats, etc., together and you usually get them cheaper than getting them each individually. I’ve even seen instances where the package was cheaper than the auto by itself)
  • Homeowner (For auto insurance)
  • Good student (As if you needed another reason to encourage the kid to get good grades)
  • Pay plan (The cheapest ways to pay are usually pay all at once or with an automatic draft from a checking account)
  • Where you work (Sometimes your occupation can get you a discount)
  • ePolicy (Get your policy emailed to you instead of a hard copy)
  • Early shopping (Yes, you can get a discount if you don’t need to start your insurance right away)
  • Updated equipment (Have you updated your plumbing, HVAC or electrical systems? You may be able to reduce your home insurance premium)

5) Auto trackers. Technically this one’s a discount, but these are worth talking about a little more.

Before I started selling insurance, I got a discount for plugging a little doohickey into my car that kept track of some of my driving habits. That was almost 15 years ago.

Now most companies have a phone app that monitor your speed, your mileage, and — probably most importantly — when you’re on your phone as you drive. (Remember when I said there are more crashes because of bad drivers? Drivers distracted by their cell phones is right at the top of the list of problems)

I was hesitant when Farmers rolled its out, but the app isn’t doing anything your phone doesn’t already do, it’s just sending the information to one more place.

These apps are a few years old now and I expect them to get more important as time goes on.

I had one client tell me she found an insurance company where she could “pay as you go.” The trick is not crossing the line between tracking and stalking.

Unfortunately, folks, there are no magic bullets, just a couple of suggestions until we get past the current craziness.

Gofundyourself

DaveGragg Car insurance, Home insurance, Insurance agent, Life insurance

There are few things as infuriating to an insurance agent as a Gofundme request floating across a social media feed.

This is going to sound like Dave Gragg is, among other things, a cold-hearted jerk. And there’s probably some truth to that.

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Because I’m not talking about potato salad.

I’ve seen tragic stories. Gofundme accounts have been set up for folks who lost everything they owned in a house fire, people who had a stroke, families who just lost their father and sole provider and more.

The infuriating thing is that insurance exists — the entire reason I have a job — is to prevent tragedies like these from devastating the rest of your life. And insurance does it faster and better than begging your friends and family to beg their friends and family.

Lose everything in a house fire? Good home insurance would have rebuilt your house, replaced your possessions and found you a place to live while your home was being rebuilt.

Impossibly high medical bills? That’s why medical insurance exists. A $6,000 deductible is rough, but it’s nowhere near as rough as a $200,000 hospital bill.

You have no idea how heart-breakingly frustrating it is to see a family lose their home because dad died in a car accident and know that life insurance could have saved that home, paid the bills and put the kids through college.

Yes, insurance can be expensive, I’m not going to try to tell you otherwise.

But it’s no where near as expensive as not having it.

Why are my car insurance rates going up?

DaveGragg Car insurance, Insurance agent

Insurance is like a fire extinguisher.

It’s one of the few things you buy and hope to never use.

So it makes sense to get it as cheaply as you can, right?

Not really.

Just like a fire extinguisher, if your insurance doesn’t work when you need it, then you’ve not only wasted your money, there are potentially disastrous consequences. Regardless, no one wants to pay more than they have to.

So when your rates go up (and all insurance companies, including Farmers Insurance, raise their rates some times) we all want to know why.

In the past year or so, most of the insurance companies in Missouri have raised their auto insurance rates, for two big reasons:

Cheap gas is raising auto insurance rates
The high cost of gas meant fewer people were on the road, which was helping keep auto insurance rates lower. photo credit: wow. via photopin (license)

1) Cheap gas. The lower price at the pump means more people are driving.

Distracted drivers are raising auto insurance rates
Insurance means you’re helping pay for this guy’s claims and he’s helping pay for yours. Hopefully his rates are higher. Image courtesy of stockimages at FreeDigitalPhotos.net (license)

2) Distracted drivers. Since there are more drivers, there are even more people fiddling with their cell phones instead of paying attention to the road.

Those two factors combined mean there are more accidents, more property damage, higher hospital bills and insurance companies have to pay out more in claims.

Insurance — car, home, health, whatever — works by spreading out the pain of a claim. So you’re going to feel the pain of increased claims, even if you’ve never had to use your insurance.

So how do you keep from paying more than you have to for auto insurance?

My advice is to work with an insurance agent. Not only can an agent advise you about potential pitfalls, but he or she can make sure you get all the discounts you’re eligible for.

As always, if you have any questions about your insurance coverage, please give me a call. I’m always happy to help. 417 708 9583

 

 

Why should you have an insurance agent?

DaveGragg Car insurance, Home insurance, Insurance agent

I have two examples from today that show exactly why I have a job — and why you should have an insurance agent.

House move
He was moving a shed, not a house, but you get the idea. photo credit: Morris House On the Move via photopin (license)

The first was a guy who bought a shed and planned to move it to his new home in Arkansas.

Before he could get a state permit to move it, he had to show that he had $750,000 worth of liability coverage.

He called Geico (where he had his auto insurance) three times and got hung up on three times before he called me.

Simple solution: Auto insurance with a $1 million umbrella and he’s good to go.

My second example doesn’t have a simple or happy ending.

Al and I had originally started talking about moving his home and auto insurance to me last April. He just couldn’t quite bring himself to pull the trigger and switch just yet.

Unfortunately, I’m not going to be able to help him nearly as well now as I could have then.

Why? Because he’s tried to collect from his current insurance company twice in the past year.

Neither of the claims he filed are covered by his current insurance, but it doesn’t matter.

Most insurance companies don’t want you if you’ve had two claims within a three-year period.

So how would have an agent been able to help him? Because his claims were both caused by flooding. Floods aren’t covered by home insurance. An agent could have told him that before it reached the claims stage so it didn’t count against him.

I’m still in the middle of this one, so I’m not sure how it’s going to end. But as I said, it’s not going to be an easy one.

 

 

Three things to get your car ready

DaveGragg Car insurance, Insurance agent , , ,

It’s not really cold yet, but it is dreary.

And rainy.

And it won’t be long now.

Winter

Are you ready? Is your car? Here are three things you can do to make sure it is.

1) Check your tires.

Driving in ice and snow is all about momentum — building it or stopping it. The four square feet of rubber that touch the ground is vital in either case.

2) Check your radiator.

Make sure your car has enough antifreeze to survive a sub-zero night on the driveway.

3) Talk to your insurance agent about your coverage (you have an agent, right?).

* Do you have enough liability coverage to protect yourself if you do slide into someone?

* Do you have enough Uninsured & Underinsured Motorist protection in case someone slides into you?

* Do you need full coverage on your vehicle?

* Do you have backup transportation or would you need to rent a car if yours is in the shop for a week, or do you need rental reimbursement coverage?

* Do you want towing and roadside in case you slide into a ditch?

What does uninsured and underinsured motorist coverage do?

DaveGragg Car insurance, Insurance agent ,

Uninsured Motorist & Underinsured Motorist coverage is an afterthought for a lot of folks, but it’s a vital component to your auto insurance.

You may have them and not even know about it (In Missouri, you have to have Uninsured Motorist coverage of at least $25,000 per person and $50,000 per accident.)

Motorcycle accident

Uninsured and Underinsured Motorist coverages are what protects you and anyone in your car if you’re in an accident that’s not your fault and the other guy either doesn’t have insurance (Uninsured Motorist), or he doesn’t have enough insurance to pay your medical bills and lost wages (Underinsured Motorist).

Here’s real-life example: One of my clients was a passenger on a motorcycle when the driver missed a turn. My client ended up in intensive care for several days.

The motorcycle driver did have insurance, including $25,000 worth of passenger liability protection.

But there’s little to nothing left of that $25,000 after four days in an ICU, so she filed a claim with the Underinsured Motorist coverage she has with me to help with the rest of the bills.

She may also be able to use that money to recover some of the income she’s losing because she can’t go to work.

I’ve talked about the dangers of the auto insurance “race” before — missing out on uninsured and underinsured motorist is another danger in making a snap judgement on car insurance.

I’ve seen people with one limit on their Bodily Injury but the state minimum for Uninsured Motorist and nothing at all for Underinsured Motorist. I’ve never been able to figure out if their current agent was too lazy to explain the coverage or too worried about losing a sale over a couple of extra bucks.

If that’s ever happened to you, may I suggest talking to an agent who will take the time to explain coverages to you?

If you have health insurance, it would cover the medical bills, but it wouldn’t cover the lost wages from not being able to work for a week, or a month, or six months, or however long you’re out of work.

And there aren’t many medical bills if you died in the accident, so your health insurance really wouldn’t be much good at all. (This is another place life insurance is pretty important, by the way.)

Do you remember this case with another car insurance company a few years ago?

You don’t even have to be in a vehicle for Uninsured and Underinsured Motorist coverage to protect you.

If you’re taking your dog for a walk and someone hits you in their car and drives off, your Uninsured Motorist coverage is going to help pay for your medical bills and your lost wages because of that driver.

Motorcyclists often think they don’t need much insurance because they probably won’t do much damage to anyone else if they’re ever in an accident that’s their fault.

That’s probably true (although there are always exceptions) but I’ve lost count of how many motorcycle accidents I’ve seen that seriously injured or killed the motorcyclist that wasn’t the motorcyclists’s fault.

Do you really want to make a bet that the other driver has enough coverage to pay your medical bills? Or would do you rather take your protection in your own hands?

photo credit: Baiazid via photopin cc

The dangers of the car insurance “race”

DaveGragg Car insurance, Insurance agent ,

You’ve heard the ads:

“15 minutes could save you 15 percent!”

“Welcome to the modern world. Save in half the time!”

First of all, I hadn’t realized it was a race.

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Price is important, nobody understands that better than me. The best auto insurance in the world does you no good if you can’t afford it.

But the battle over whether the protection of everything you own is worth a quarter of an hour vs. 7 1/2 minutes?

That really is what we’re talking about here. It’s not just your car you’re protecting, it’s also your assets.

Now then, I know you have an excellent driving record and you would never get into an accident that’s your fault. But let’s pretend for a moment that you do get into an accident and you send someone to the hospital.

The accident is your fault, so it’s your responsibility to pay for the other guy’s hospital bills and the pay he’s not receiving because he is in the hospital.

If someone dies in that accident, you’re responsible for not only their burial costs, but all of the money that he won’t make to take care of his family.

Your insurance company will pay all those bills, that’s it’s job. But it’s only going to pay the bills up to the liability limits that you’ve set up.

If you haven’t set those limits high enough, you may have to pay for the hospital bills and the lost wages with whatever money you have in your bank account, whatever assets the court says is claimable, plus whatever wages the court says can be garnished.

That’s what those ads promising “quick and easy” don’t tell you and that’s why it’s worth a lot more than just 15 minutes. That’s why it’s worth talking to an agent about what coverages are right for you.

But at least it’s not Norm McDonald extolling the benefits of just doing the minimum. I really hate those ads.
photo credit: sdowen via photopin cc