When it comes to getting the best deal on auto insurance, we want to have our cake and eat it too. We want the best rates, the best service and a policy that's unique to our needs. So how do you know if you're getting that from your auto insurance?
Before you hunt for new coverage or put your current auto insurance under the microscope, it's important to understand your needs. Do you have an older vehicle? Do you have a teenage driver? Is your side hustle driving for a ridesharing service? Your individual needs are unique, and your coverage should be too.
If it's been a while since you popped the hood on your auto insurance, now could be a great time. It's often best to review your insurance policy yearly and update it with any major life events like changing jobs or moving.
Following these five tips will help you review your current coverage if you're shopping for savings on auto insurance.
Video Duration: 3 minutes 58 seconds
Introduction: Elapsed time 0 minutes 0 seconds [00:00]
Hi everyone, Allison here coming at you today to talk a little about auto insurance with just a few helpful tips to ensure that you're getting the most appropriate price and protection for your own personal auto policies. So whether you're a new auto insurance shopper or someone who's had 20 plus years of auto insurance, this video is for you.
Tip 1: Annual mileage: Elapsed time 0 minutes 26 seconds [00:26]
So annual mileage is a rating factor in the majority of states out there and what that means for you is the amount of miles that you enter on your auto policy makes the difference or can make a difference in the price that you pay for insurance. So you want to be as accurate as possible when you're tracking your annual mileage.
Tip 2: Discounts: Elapsed time 0 minutes 48 seconds [00:48]
Now discounts tend to range from state to state, so it's really important to check in with your own personal provider to know what's available in your specific location. But when it comes to discounts, there are a lot of discounts that need to be added manually to an auto policy. So things like good student discounts or defensive driving discounts, storage discounts if you're not driving your vehicle, these all need to be manually added to an auto policy as opposed to discounts that are automatically provided.
Tip 3: Deductibles: Elapse time 1 minute 21 seconds [01:21]
So auto insurance deductibles are essentially the amount of money that you pay out of pocket after a covered loss. So when you're selecting your deductibles it's important to make note, that when you choose a higher deductible, you're going to save a little bit on your auto insurance premium upfront, however down the road if you suffer a loss, your out-of-pocket will be a little bit higher. So when you're choosing your deductibles a few things take consider: how old is your vehicle? Does it make sense to carry a higher deductible? Will I be able to afford this deductible I've chosen if I do have a loss? And what are my driving habits like? Do they put me at a higher risk for having to pay a deductible?
Tip 4: Liability: Elapsed time 2 minutes 10 seconds [02:10]
So liability on an auto policy is a coverage that helps to pay for things like medical bills, lost income, pain and suffering and damaged property to others if you're found at fault in auto accident. So you want to ask yourself if you do get in traffic accident and you damaged several vehicles, potentially injured several people and the damages exceed your policy limits, could you afford to pay the difference out of pocket yourself? If the answer is "no," you may want to consider bumping your own personal liability limits up a little bit higher. The general rule of thumb when you're choosing your liability limits, or a good starting point at least, is to make sure you have enough liability to cover your net worth.
Description of visual information: [Total of your assets minus total of your debts equals net worth] End of description.
You are also going to want to consider your own personal risk factors. So we're talking about things like if you have a youthful driver in the household or on your auto policy. How far are you driving and how frequently are you driving? Things like this are definitely, you know factors you want to consider when you're choosing your limits.
Description of visual information: [Quick recap – at least annually:
Review your annual mileage
Check for discounts
Check your deductibles
Review your liability coverage] End of description.
Your policy is unique to you: Elapsed time 3 minutes 30 seconds [03:30]
Alright that is the end of our four helpful tips for auto insurance. At the end of the day again your policy is unique to you and make sure that you are taking the time at least once a year to update your policy to reflect any changes or life events that you are going through and ensure that you're getting the most appropriate price and protection for you.
Description of visual information: [Copyright © 2023 USAA
USAA means United Services Automobile Association and its affiliates.
NC] End of description.
End: Elapsed time 3 minutes 59 seconds [03:59]
1. Check your mileage.
Your yearly mileage is often used to help determine your rate. When you're providing your mileage for your auto insurance policy, you want to be as accurate as possible. Track your driving habits. Look at how often you're running errands and how far you drive. How often are you traveling for kids' soccer practices? Has your drive to work changed in the past year?
These are questions that can help you determine how much you drive each year. Updating that on your policy can make a difference in the price you're paying on auto insurance.
2. Check your discounts.
Discounts vary from state to state, so ask your provider about the auto insurance discounts you're getting. There are some great auto insurance discount opportunities that might not automatically be included, like:
- Good student drivers.
- Defensive driving course completion.
- Auto storage discounts.
- Multi-car or multi-policy bundles.
As times change, so do discounts. New discounts like those for safe driving habits roll out periodically, so regularly review your auto insurance policy for discount opportunities.
3. Check your deductible.
Deductibles are the amount you'll pay out of pocket for a covered loss. A higher deductible can save you money on your auto premium but could increase your out-of-pocket expenses later if you suffer a loss.
Here are a few questions to think about when selecting your deductibles.
- Can I afford this amount if I have a loss?
- How old is my vehicle and does it make sense to carry a higher deductible?
- What are my driving habits like and do they put me at a higher risk for loss?
Your situation's unique, so you'll need to consider your risk tolerance and how much money you typically have in your emergency fund when choosing your deductible.
4. Check your liability limits.
Liability on your auto policy helps to pay for medical bills, lost income, pain and suffering, and damaged property of others when you're at fault in an accident. For example, you're in a traffic accident and responsible for damaging multiple vehicles and injuring several people. The damages exceed your liability limits. Could you afford to pay the difference?
The general rule of thumb when selecting liability insurance is to carry enough liability to cover your net worth. That's the total amount of your assets like savings and personal property, minus your total debts.
You'll also want to consider risk factors like having teenage drivers on your auto policy, how frequently you drive and how far, as well as your occupation. Liability coverage is typically the least expensive part of your auto policy to increase, but if you're facing the financial impact of a legal battle from an at-fault accident, it can be worthwhile.
5. Review your insurance company.
If you've filed a claim before, you know it can be one of the most revealing experiences you'll have with your insurance company.
Insurance is basically asking someone to be there for you in a time of need. Is your insurance company the friend who shows up at a moment's notice to help you? Or are they the one who doesn't have a great track record of reliability?
Consider your insurance provider's financial strength, their customer service history and reputation. Check out consumer reports or online reviews to get a better sense of what other customers have said. Consider what you need from your insurance company and whether they provide it.
You're ready to save.
Sometimes, saving on auto insurance means switching if there are other insurance companies that may be able to beat your current provider. While cost could be the initial reason to shop and swap, make sure you feel good about the new company and how they work for you when you need them, like during a claim. Also, make certain that you are getting coverage that is appropriate for your needs. Avoid swapping for cheaper premiums unless you are getting the same coverages or better with your new provider.
When you decide to cancel, make the call and complete the forms they ask for. Don't just stop paying your insurance premiums. A nonpayment cancellation happens when you do just that. While that might not seem like a big deal up front, you could find it to be challenging if you ever want to go back to that insurance company.
Not to mention some insurance companies can seek out past premiums that you owe as an upfront payment to start a new policy. Others might not offer you coverage at all.
So whether you're a new shopper looking to switch or simply wanting to save on your current coverage, following these tips can help guide you to getting the right auto insurance for your needs.
At USAA, auto insurance isn't just about auto insurance.
Explore our discounts and savings, as well as advice and tips for safe driving.