People often focus on which company offers the best rates but a better question is who gets the best rates?
As an agent who has long been working car and home insurance here in Oregon, I see patterns in who tends to get the best rates. They share common characteristics that I’ve tried to gather here.
The good news is that many of these are within your control. Some you can do now. Others, you may want to work towards.
So, who gets the best rates?
People who take care of their bills and, if they can, pay in full. Many companies offer discounts for paying in full. Also, this is where the credit score can come in. Better credit can translate into better insurance rates. (Here in Oregon, if your credit drops, your current company cannot adjust your rate upward based on the credit. (For more on this see, Wait, credit history can be used to rate my car insurance in Oregon?)
People who save insurance claims for big losses (and don’t file small claims). Things like windshield claims or even emergency road service nearly always go into the rating system. There are some convenience benefits for using your insurance for these options, and they won’t boost your rates like an at-fault claim or tickets. Even so, these smaller claims can raise your insurance prices.
People who have high deductibles. Let’s start with the obvious. Choosing a higher deductible means their price is lower. In other words, they keep more money in their pocket every year. Less obvious is that these tend to be people who are willing to save insurance claims for bigger losses. In other words, they’re also less inclined to file small claims (see point above).
People who don’t have extra vehicles. Some people like to keep an extra vehicle around for flexibility if one breaks down. That’s not a crazy idea, and it does give flexibility. But this will not save money on insurance. Add in vehicle registration and maintenance and you’re spending–not saving–money.
People who don’t purchase a car for their teen. Sometimes people think it will save them money to get their teen a less valuable car. True, a less valuable car often is less to insure than a more expensive car. But adding another vehicle, even a low value vehicle, to your household with a teen will increase your bill significantly. (Why? Your teen can still smash a clunker into a nice car full of people.)
Personal side note– Every family navigates the teen driver process differently; here’s our approach. We have multiple teens in our family. Needing to keep our budget trim, we have committed to operating with as few vehicles as practical. We keep up on vehicle maintenance so they’re less likely to break down. We’ve worked to help the kids find activities and jobs that are relatively close to home so it’s easier to work into the schedule. They also have bikes for riding and–who knew!–legs for walking. We’ve also look for opportunities for ride-swapping and sharing. And it’s not unheard of for me– the pater familias!–to take the bus.
People who don’t switch insurance companies frequently. If you’re switching companies every one or two years, you’re probably not going to get the best rates. You don’t have to stay with a company forever, but nearly all companies consider length of time with a carrier as a pricing factor.
People who do get quotes every 3 to 5 years. Carriers’ rates can diverge over time and, occasionally, a carrier’s rates go uniquely wild because of changes in the back office. Take a bit to check around. (We’d love to help especially if you’re in Oregon near the Hillsboro, Forest Grove, or North Plains areas.)
People who request rerates every few years. Here in Oregon you can request what’s called a “rerate” for your home and auto insurance. Essentially, this asks the company to reprice your policy by refreshing your credit associated insurance score. Your rate can stay the same or improve.
People who give attention to the roof of their house. This one has become more important in recent years. It includes having a newer roof, having a clean roof (that Oregon moss and needles!), and not having near hanging trees.
People who don’t live in wildfire areas. Because of the wildfires, we’re seeing a growing difference in pricing for houses in wildfire areas. Here in Oregon, there has been a tussle over the redrawn state fire maps (which insurance companies are prohibited from using). But, of course, insurance companies are very interested in understanding wildfire risk because it’s directly related to the risk–and thus the policy price– for a particular property.
Accordingly, insurance companies use their own resources to develop criteria drawn from private maps, aerial imagery, and their own analyses to adjust pricing according to the risk. And they all do it a bit differently.
In short, if you’re closer to a wildfire area and farther from a fire department, your insurance will be more expensive.
People who consider bundling (and unbundling). It’s easy to miss this amidst the craziness of buying a new house. Nevertheless, insurance companies do incentivize bundling with discounts; some to a huge degree. So make a note to get a comparison for bundling (as well as unbundling).
People who own less stuff. More house, more possessions, more cars = more property that can be damaged in an accident.
People who use telematics to confirm their good driving. Essentially, companies use the sensors in your phone to assess how you tend to drive. Insurers have continued to make this information a bigger part of their rating.
If you’re the type of person who doesn’t want to be tracked all the time or have another app to manage, I’m with you. That’s why it’s good news that two of our three auto insurance companies only require that you do this for 90 days. Drive well and the savings can be big. Over the years, worth thousands. (Also see our Should I use the smartphone tracking app?)
What can I do?
If these have you bummed because you can’t check as many boxes as you’d like, don’t sweat it.
Some of these you can do now. Consider bundling. Ask your current company to rerate your policies. If you haven’t gotten quotes in more than three years, do so. (We’d love to provide a comparison, especially if you’re in Oregon near the Hillsboro, Forest Grove, or North Plains areas.) Inquire about the smartphone app telematics discount. Do what you can.
Other items above may take time to work towards.
The single most important–and most difficult for us anyways– among these would be to work towards building your cash reserves. It’ll probably take time, work, and some tough choices, but the long-run benefits are real. For your insurance, this allows you to pay in full, to have a better credit score, to move to higher deductibles, and to take care of smaller “emergency” incidents without filing claims.
In sum, start with where you’re at.
Learn more About Us (actual people!), our Sensible Approach, or our Carriers.