7 questions to help you get the best deal on auto and home insurance
Searching for the best deals for your auto and homeowner’s insurance can feel overwhelming. With so many providers and so many options, comparing quotes can leave you with a library of reading material. Rather than listen to commercials compete for your business, conduct your own investigation.
Here are seven key questions to ask to make sure you’re signing up for policies that fit your budget and your needs.
1. How much can safety save?
Installing security systems to protect your car and home can do more than give you peace of mind.
“Auto insurers offer premium rate discounts if the policyholder’s vehicle is equipped with anti-theft devices, and home insurers often give rate reductions to policyholders who have installed security systems at their homes,” says Michael Barry, a spokesman for the nonprofit Insurance Information Institute.
Additional safety features may be able to reduce your costs even further. For homeowner’s insurance, deadbolt locks and smoke alarms can help save money with some insurers. Safe behavior can play an important role in reducing your auto insurance costs, too. For example, Nationwide’s defensive driving discount can save drivers up to 10 percent for enrolling in an approved safety course.
2. Do you qualify for other discounts?
In addition to safety features, insurance providers offer discounts on a wide range of factors. GEICO provides discounts to customers who belong to more than 275 professional associations, which range from fraternities to credit unions. Progressive offers discounts for paying in full rather than spreading payments throughout the year.
3. Can you combine your coverage?
Bundling your auto and home coverage can do more than simplify your search for the best insurance deals — it also can reduce your costs. Barry says a policyholder who has at least two policies with the same company usually can save at least 10 percent to 15 percent on annual premiums compared with a consumer who buys auto and home insurance from separate carriers.
If you have additional insurance policies, the combination savings can be even greater. Allstate gives drivers a 10 percent discount on auto insurance for insuring their home or apartment with them, too. Nationwide’s multipolicy discount can save customers up to 25 percent.
4. What happens if you raise your deductible?
If your car or house sustains damage, you’ll need to pay your deductible. The deductible refers to the initial expenses you must cover before your insurance company helps fix or replace your property.
The nonprofit Insurance Information Institute recommends a minimum deductible of $500 for homeowner’s insurance, but increasing your deductible can help you save. Before you consider raising your deductible, you should weigh how much you can afford to cover in the event of an accident.
“Consumers need to ask themselves is what they could comfortably pay for out-of-pocket for damages that may be incurred by their car or their home,” Barry says. “If a policyholder can raise the deductible to $1,000 from $500, they’ll save a significant amount of money on either of their insurance premiums.”
5. Can you improve your credit score?
Many providers use your payment history, your outstanding debt and other data from your credit report to estimate the likelihood that you’ll file a claim. The calculation is called your credit-based insurance score.
Karen Carlson, director of education at InCharge Debt Solutions, a nonprofit financial counseling organization, says a low credit score can double your insurance premiums.
However, Carlson says there’s a lot you can to improve your score. She recommends ordering a free copy of your credit report from annualcreditreport.com to verify that it doesn’t contain any mistakes. In addition, Carlson says, consumers should pay down their debts and use bill-pay app alerts to make sure their payments are made on time.
If you live in California, Hawaii, Maryland or Massachusetts, state laws prohibit your credit record from affecting your premiums.
6. Are other companies offering better quotes?
One of the best ways to make sure you’re getting the best deal on your auto and home protection is shopping around. The Insurance Information Institute recommends comparing at least three insurance quotes from different providers before buying a policy.
7. Aside from the cost of a policy, what should you consider?
Your monthly payments may be at the front of your mind, but you’ll need to compare more than just quotes when choosing your coverage.
Robert Hunter, director of insurance at the nonprofit Consumer Federation of America, advises consumers to consider customer reviews of different providers. J.D. Power and Associates conducts annual studies to evaluate consumer satisfaction with the claims filing process. Your state insurance department also may provide resources to help you understand information about insurance companies, such as how stable their finances are and how many complaints have been filed against them.