Should I be switching my car insurance? If that’s the question you’re asking, we’d encourage you to do a good comparison of what you have with other options.
For our family, our car insurance represents a significant portion of our annual bills. We have several cars and several drivers. We’ve managed to steer clear of accidents and claims, and for our older cars we’re still paying north of $3,000 for the year.
I know the pain of sending away that money, but as an agent who has seen many claims where insurance policies shielded customers from tens of thousands of dollars in losses, I remain convinced the policies are important for protecting us from big, unexpected losses. So what’s a person to do?
The best thing you can do if you haven’t checked in awhile is to request a good insurance comparison. (If you have checked and are still aghast at the cost, you can check here to see what you can do to lower the cost over time. “Who gets the best insurance rates? – an Oregon agent’s view“)
It’s worth a little work.
Based on our experience comparing a lot of car insurance quotes in Hillsboro and the Portland metro area, here are some of the basics and also things people often miss. Pricing is critical but comes last.
Find Your Current Car Insurance:
The best way is to get this through your online insurance account and download your current “Declarations Page” or “Policy Summary.” Or, you can call the agent or insurer and ask that they email it to you. (You can also take screenshots in the app but this often gives incomplete and scattered information.) Without this, you’ll have no idea what you’re currently paying for.
Lookouts When Comparing Car Insurance:
Find your liability limits
Liability limits are the part that protects you from lawsuits. It’s pretty simple. If you injure people in a car accident, you owe them. If you damage their car, you owe them.
The liability coverage is a promise of the insurance company to take care of those injuries and damages up to a certain amount. It’s easy to skip over this or to just lower it to reduce cost, but for a few hundred dollars a year you may be lowering your protection by more than $100k!
Don’t fall for the “state minimums.” Here in Oregon, those minimums were established over 50 years ago! Medical costs can easily soar over the $25k Oregon injury limit. Car values often far exceed the $20k Oregon property damage limit.
Uninsured Motorist?
Here in Oregon, it’s most common for the uninsured motorist limits to match the liability limits so you won’t have to think about these as much. Nonetheless, it’s important to check because this is the part that helps fill in the gap if you get hit by someone who doesn’t have any or enough coverage.
Here in OR about 1 in 7 people on the road are driving without insurance (See The Uninsured Motorist). It’s illegal and the unfairness can be a bit galling (Why should I be paying to cover for someone who was driving illegally and didn’t get coverage?). But the world isn’t fair. If they hit you and they have no insurance, there’re often little resources to help cover the damages and injuries.
Covering Your Cars?
This is where Collision and Comprehensive (or “Other than Collision) come in.
If you have a loan on your car, you’ll likely have to purchase these coverages with a deductible of $1000 or less. If you own your cars outright, these coverages are optional.
If your car is old and not worth much, it might not be worth it to you to pay for this coverage. Though, with the cost of used cars lately, you might want to keep it too.
PIP Coverage?
Most people in Oregon go with the state required coverage of $15k because there’s often coverage under health insurance or another party’s liability.
If you often are carrying many family passengers, you might want to consider bumping this to $25k or $50k just to ensure there’s a bit more coverage.
Optional Coverages.
Road Service?
Can give a little peace of mind knowing you can call for help and covered emergency road service in most situations.
Rental Reimbursement?
If you depend on your car and don’t have access to a backup car, this coverage can be helpful. It helps cover a replacement rental vehicle if your car is in the shop from an accident.
Loan Gap, OEM Coverage, or New Vehicle?
These are less common but cover things like gap coverage on a loan. Get Original Equipment Manufacturer (OEM) parts if you have a special brand (BMW, Audi, or Mercedes come to mind). If you’ve just purchased a vehicle, New Vehicle coverage might offer more replacement money if you total your brand new car.
Keep an eye on Little Benefits!
It’s often easy to miss the little benefits that carriers may add into a policy over time. These have value and are worth knowing about to make a reasonable comparison. For instance,
Cash Back? Some carriers give 5% or more back if you have no claims.
Accident Forgiveness? Does your current policy have this?
Declining Deductible? Your deductible may be lower than you think.
Smartphone app?
Most carriers have made using their smartphone app, which assesses how you drive, a bigger part of their pricing. For comparing pricing, you should know whether your current pricing includes that and whether the new quotes include it. (Should I use the smartphone app?)
Finally, Compare the Price
If you only focus on price, you’ll make yourself vulnerable to R&R sales reps who will just reduce and remove coverages to lower the price and secure a sale. Without knowing your current coverages, the price doesn’t tell you much.
It’d be like going to the Fred Meyer and seeing two boxes of shoes for sale, one for $50 and one for $75. Which is the better deal? Well, what is in the box?!
Price is critical, yes; and you also need to know what’s in that box!
In Sum
Doing a reasonable comparison will help you find the best value for your situation. This is most worth your time if you’ve had some major life changes or if it’s been several years since you’ve checked.
Looking over the past few clients who decided to move their car insurance to one of our carriers. One in Forest Grove saved $507, another in Hillsboro $71, another in Beaverton $3248(!) per year. Those examples are for similar or stronger coverages and don’t include the home and umbrella pricing. Not everyone saves a ton, and not everyone switches, but many do.
A decent comparison does good things for you. You’ll know what you have, discover unwanted gaps (like low liability limits), avoid being taken by a lowball quoter, and heck, you might save big money.
See also: Comparing Home Insurance in Oregon
Let us know if you’d like a car, home, and umbrella comparison.
Learn more About Us (actual people!), our Sensible Approach, or our Carriers.