15 Minutes can save you 15% on your car insurance? Pshhhh… Try 47%!
Yup, in continuation of our Challenge Everything mantra, I am now officially saving money on our car insurance now too :) Now dropping my already low premium of $39.54/mo down to $20.99/mo with USAA. For literally making a 15 minute phone call. (Actually a 14 mins and 59 seconds call to be exact – I tried taking a screenshot to show y’all but was on my home phone looking like a complete IDIOT trying to snap it with buttons that didn’t exist! Hah!)
I just called them up, told them I was looking to reduce both our monthly premiums, and asked them to go down each line item with me to update old info and re-assess current coverage. It turned out we could cut a total of $183.56 worth of stuff from our 6 month premiums! Huzzah!
*That’s $30.59 of monthly recurring savings forever*
Which, if you recall, is what’s started this new challenge of ours in the first place. The idea that the more you can cut from your monthly expenses – while still living your normal lifestyle! – the less you need to earn later to pay for it. And the closer to early retirement you get (at least in theory :)). This $30-something savings means we no longer need to earn $50’ish every month going forward once you calculate in taxes/etc. Pretty neat, huh? And we still have adequate insurance!
So needless to say we’re on a roll here. If you haven’t started challenging your own expenses lately, I highly advise it. It literally only takes a few hours (one time!) to knock a lot of this stuff out, and then you reap the rewards every month going forward – it’s incredible. And even more so how much we’re wasting every month by just not paying attention!
Here’s an update on everything we’ve been challenging (and saving on) so far:
- Stocks –> Moved everything to Vanguard saving *thousands* in future expense fees
- Cell Phones –> Switched to Republic Wireless saving us over $100+ a month (!!!)
- Car Insurance –> Revised coverage with USAA and now saving $30.59/mo!
- Cable/TV/Phone –> The next targets on our list… :)
Remember, these are only one-time changes that result in hundreds and thousands of savings over time. There’s no better return on your hours invested!
How we lowered our car insurance bills:
We’ll start with me and my FrankenCaddy…
First, I did something that most of you probably will NOT want to do – which is to get rid of collision completely. I’m still legally insured to help cover other peoples’ costs in the event of an at-fault accident, but as someone mentioned in my earlier car crashing post, it didn’t make sense to keep coverage around any more now that my car is officially registered as a piece of $hit. Though, a pimpin’ piece of $hit if you ask me ;)
So that was the biggest factor in the drop of premium… Then we did the following:
- Updated my yearly mileage from 4,000 to 1,000 (I work from home and rarely drive it)
Dropped property damage from $100,000 to $50,000 (which is the average, from what I’m told)*UPDATE: I had to move this back to $100k because apparently it messed up my Umbrella Insurance Policy! Which you need $100k coverage for! So good thing some of y’all mentioned this in the comments below – I would be out $50k if something had happened later needing my $1 Million umbrella to kick in – ouch!! Y’all rock. Oh, and the difference of premium now?? A wopping $0.46 haha… So I’m still on track w/ the 47% savings ;) Or would it be 46.5%? (Hah!)
- Took off towing/roadside assistance (we have AAA)
- Took off vehicle rental while car is in the shop (again, not an issue – it’s going straight to the dump!)
- Nixed “lost work” insurance… This is where they’d pay you $100 a week if you’re out of work due to a car accident. But considering I had no idea we even had this, I doubt I’d remember to activate it later in the event this happened…
You might not be able to do all of these depending on your own situation (like the mileage decrease part), but it’s definitely smart to go down the line items with your current carrier and see what you no longer need anymore. You might be surprised what you find like I just was!
And of course, it’s always a good idea to comparison shop with other insurance companies out there too. I’ll recommend USAA ’till the day that I die, but unfortunately not everyone has access to them (you need a military tie). Still, there are plenty of other great companies around too – maybe you’ll get some good ideas down below in the comments today? (HINT: Tell us who you use and if you like them! :))
My old premium: $237.28 every 6 months ($39.54/mo)
My new premium: $125.96 every 6 months ($20.99/mo)
TOTAL SAVINGS: $18.55/mo
We only made a few changes with this one, but it still netted us a cool $10’ish a mo in savings. The only part I was iffy on was raising her $200 deductible to $500, but after running the numbers it would have only saved us $5/mo meaning that we’d have to avoid an accident across 5 whole years (60 months) for it to be worth it in the end. And with the luck I have, there’s hardly a shot possible ;)
Here’s a picture of the last accident we had with it:
And here are all the changes we made to her policy:
- Updated her yearly mileage from 12,000 to 5,000 (she’s a stay at home student at the moment)
- Took off towing/roadside assistance
- Took off vehicle rental in case of accident
- Nixed “lost work” insurance…
So the main change here is the drop in mileage. Again, not everyone will be able to do this one (although you may! Make sure to do a calculation real quick!) but the point is to go over everything and see what’s changed and what needs to be revised. Every dollar counts!
Her old premium: $340.44 every 6 months ($56.74/mo)
Her new premium: $268.20 every 6 months ($44.70/mo)
TOTAL SAVINGS: $12.04/mo
I know I’m gonna sound like a broken record here, but the main takeaway today is to just pick up the phone and ask your insurance company how you can lower your premiums. That’s it. You may save a lot less or a lot more than me (I’ll keep my fingers crossed for the latter), but you’ll never know until you spend the 15 mins or so asking.
If it makes you feel more comfortable, break it into two calls so you have time to think. The first one so you can gather the info, and the next one to make any necessary changes once you determine what makes the most sense in your situation. Just DON’T FORGET TO CALL BACK that 2nd time! I knew I’d probably push it off yet again (been trying to call for 3 weeks now!) so I just did it all in one shot so my laziness wouldn’t win out again ;)
Then once you knock this out, add up a calendar item to review it all again in 12 months. That way you can possibly save even more later! Here’s how our rates have looked over the years for our (same) two cars:
- 5 Years ago: $706.51 every 6 months ($117.75/mo)
- Yesterday: $577.72 every 6 months ($96.28/mo)
- TODAY! $394.16 every 6 months ($65.69/mo)
There’s money to be saved out there, friends… Just gotta try and grab it!
Now tell us – how much do you pay every month for insurance? When was the last time you reviewed it?? I know some who pay even lower than $20/mo, and then others who pay over $600 (!!!). Hopefully y’all are closer to the former :)
PS: Did I mention I use USAA for all my insurance stuff ? ;) Homes, cars, health, you name it… Killer customer service, and even killer rates.
Jay loves talking about money, collecting coins, blasting hip-hop, and hanging out with his three beautiful boys. You can check out all of his online projects at jmoney.biz. Thanks for reading the blog!