Queen City Risk Management

(716) 970-4200 • jason@queencityrm.com

5 Reasons You Might Be Paying Too Much for Car Insurance

Every time you look at your monthly or annual insurance bill you are thinking to yourself “There is no way that insurance should be this expensive”.  Maybe you even chat with your neighbors and find out that they are paying way less than you are! That’s the worst, right? Well you’re not alone.

Let’s dig into why you might be paying too much for your insurance

1)      Your credit score could use a boost

Most folks don’t know this, but many insurance companies consider your credit score to be a huge factor when they are figuring out how much to charge you. Companies have found a relationship between low credit scores and higher frequencies of accidents.

So if you are paying more than your friends for car insurance it might be time to try to boost that credit score. Getting better car insurance prices is probably one of many reasons to work on that credit score but who couldn’t use some extra motivation, right?

After you spend a few months bumping your score, it is a good idea to shop your insurance out with a few different insurance companies.  

2)      You don’t shop your insurance out often enough

That’s right. It pays to requote your insurance from time to time. Who knows what may have changed for you. Maybe your credit went up (aren’t you so glad you know about that now?).

Maybe you got married. If you’re married and haven’t combined policies yet, stop what you’re doing right now and get on the same policy with your spouse. Unless your spouse has multiple vehicular homicide convictions, you should be saving yourself some money.

Maybe there are companies out there offering killer rates and you have no idea because you haven’t tested the market in years. In the 8 years I’ve been living in the insurance world (that might sound boring, but I promise it’s actually pretty awesome) I’ve seen company rates ride the waves. One company is trying to grow and offering killer prices while another is trying to recover from losses and raising rates.

You never know what is out there until you shop things out. It is because of this that we do the insurance shopping for the people who trust us with their insurance. Every 2-3 years we requote peoples insurance with multiple carriers to see which one of our reliable companies can offer the most practical price.  

When it does come time to shop around make sure you are using a trustworthy (make sure they have solid google reviews) independent agent. Independent agents will take your info down 1 time and get you quotes from multiple companies. The best part of that? It costs you nothing to have that agent do all the legwork.

3)      You shop your insurance out too often

No, I’m not messing with you. I know I just told you that it is helpful to have an independent insurance agent shop your insurance around for you regularly and that you might be paying too much for car insurance if you haven’t been shopping around regularly.

Insurance companies are sort of like employers though. If they see people who jump around from company to company they might think you’re flighty. Insurance companies spend a bunch of money to get you in the door and they want folks who have a track record of sticking around for a bit.

So if you have a history of switching insurance every six months, chances are your rates are being negatively impacted by that.

So here is what you do to solve that problem. Find a solid agent who actually cares about you and get a reliable level of coverage from a trustworthy insurance company (a company your independent agent has vetted and trusts). Then do nothing. Do nothing for 2-3 years. Boring right? Well for you insurance should be boring. I’m the one who gets to have all the fun.

For 2-3 years when that funny insurance commercial comes on it’s still OK to laugh but don’t even think about switching your insurance.

For 2-3 years when your friend says they are paying less for insurance, you just smile and nod because you are on your way to crushing the insurance rate game while Suzie next door keeps looking like that flighty co-worker to her companies and ends up paying more in the long run.  

4)      Tickets and Accidents

You had to see this one coming right? Hopefully this is common sense but if you get into accidents you are probably costing the insurance company money. This is one way they are just like you. You don’t like to lose money, neither does your insurance company.

When they insure you they are making a bet that they will pay you less than you paying them. They don’t always do as well as they’d like. Many companies only make a couple cents on the dollar or even lose money some years.

So don’t get into accidents or get tickets. Easy right? Eh, not so much. My wife is a super smart and capable woman who has never gotten into an accident with a moving vehicle. But she does on occasion bump into inanimate objects. I’m not mad. I get it. That tree came out of nowhere! We all probably have taken a corner too tight coming out of a parking spot and taken a little off the car next to us, right? No?? Maybe it’s a minivan thing.

Most of us will find ourselves driving faster than we should or just making a silly mistake at some point and have an accident. Just know that that silly mistake can cause increased car insurance prices for the next 3-5 years.

So here’s what you do -

·       Definitely don’t have more than 2 at fault accidents within three years. Most insurance companies won’t even work with you if you’ve had 3 or more accidents within 3 years.

·       Have your independent insurance agent requote your policy as soon as that ticket or accident is 3 years in the rearview mirror.

·       While you are waiting for those 3 years to be up make sure you are with a company that offers reliable insurance with a practical price to folks who have some negative driving history. Some companies offer super high prices once you have an accident or two but those same companies offer incredible prices to people with clean driving records. Your trusted independent agent will navigate the marketplace to find you the right company.

 

5)      You decided to have children (well you had some anyways).

Yup. Kids cost money. How’s that for sage wisdom?

Let’s talk about the 16 year old who wants to get their license. At that point you might as well just direct deposit your paycheck into the insurance companies bank account.

Here is one quick fun fact for your next cocktail party though – With most companies, our rates won’t go up while our kids have their learners permit. They go up when they get their license.

We will all pay more for insurance when we decide our kids should get their license. New drivers cause more accidents. Maybe they don’t know what they are doing yet. Maybe they had to see what was happening on their Insta and didn’t see the car in front of them.

Throughout your driving life your insurance coverage should be reliable and you will want to maintain healthly levels of liability and property coverage but for many people this hits home when their kids start driving. We want out kids to be protected. We want our financial security to be protected. A reliable insurance policy will keep your family and your financial health well protected.

 

So what to do next? Maybe it’s time to pull out that insurance policy and talk to a trusted insurance professional who can make sure you have reliable coverage with a practical price.

If that is you and you’d like have our team review your policy and shop it out for you just reach out.