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Sonja Haggert

MY HUSBAND is the consumer every company should fear. In my last post, I detailed his multi-month research that preceded our recent car purchase. This time, he decided to investigate auto insurance.

The Gecko’s promise to save 15% had hit a nerve. A savings of 15% on a $2,500 annual insurance bill for two cars would be worth the effort. But, of course, being the thorough person that he is, my husband had to check out every other insurance company on the planet.

What an eye-opening experience.

He started by getting online quotes. Then he called and asked for a hard copy confirmation. The initial online quotes looked amazing until he delved into the details. The coverage was minimal. When he asked the companies to replicate our current coverage, the quotes doubled.

Upon further inquiry, he found out it was partly due to a claim. That made sense. But what claim? We couldn’t think of any accidents or traffic tickets.

This is where it gets interesting.

The agent said there is a clearinghouse that tracks insurance claims. The Comprehensive Loss Underwriting Exchange, or CLUE, looks at “incidents” on your report. We had three claims.

In two instances, we had needed to jump start an antique car we own. These were incorrectly labelled as towing calls. My husband explained to the agent that we had a separate policy for the antique car and were not asking him to include it in the quote. It didn’t seem to matter.

The other claim was for a damaged windshield on a car we had since sold. We decided that, since we had insurance, we should put in the claim. Isn’t that why you have insurance? It turns out that, while the claim may not negatively affect your premium with your present insurer, it could add to the cost if you get a new policy.

After all the wrangling, we did change insurance companies. It was worth it. Here are five things we learned:

  1. Get quotes regularly from other insurers. Even if yearly increases are small, they add up—and you could do better.
  2. Keep the clearinghouse in mind if you plan to change policies. A new insurer may ding you for claims within the last five years or so. If the damage to your car isn’t too extensive, consider paying out of pocket.
  3. Make sure the insurance quote you request is for the same coverage you currently have. That way, you can make an apples-to-apples comparison.
  4. Newer cars have more safety features—and that can result in lower insurance premiums, even though you’re now driving a newer, more expensive car.
  5. Don’t opt for the insurance company’s roadside assistance if you already have coverage through another source, such as AAA or your credit card.

How did we do? We have a new policy with an insurance company that’s saving us $1,300 a year. An added bonus: Unlike our old insurance company, the new insurer lets us pay by credit card, so we’re collecting points.

Sonja Haggert’s previous articles were Getting Used and Check’s in the Mail. She’s the author of Invest, Reinvest, Rest. You can learn more at SonjaHaggert.com. Follow her on Twitter @SonjaHaggert.

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Scott
Scott
2 years ago

For an industry that relies so heavily on information and technology to accurately assess risk, they sure do a lousy job of it. Your experience mirrors my own when I recently shopped for insurance for my kid. I can’t help but think that this is a category ripe – and long overdue – for reinvention and REAL innovation.

nordenstadt
nordenstadt
2 years ago

Just went through this again. Our auto insurer wanted $1444, or $100 more than the previous year. We found a comparable policy for $1175, from a place we had used before, but was not the cheapest last year!

No moving violations, no accidents, no claims. No idea why they thought we should pay more this year.

We have umbrella with the auto insurance company – not the same as the home insurance company.

CJ
CJ
2 years ago

One possible deterrent to switching is for people interested in an umbrella policy: many times, you need to keep home and auto with the same insurer to get the umbrella as well.

IAD
IAD
2 years ago
Reply to  CJ

For us, our home insurance is based on also having auto insurance. Our comparison would not only be for auto insurance, but it’s impact on home insurance as well.

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