If you own a vehicle in Maryland, you know that auto insurance is a necessity to have it legally on the road, and I am sure you have felt the increases in rates on auto insurance over the past couple of years. It can be painful to open up your renewal and see your bill go up, especially if you are already operating on a tight budget. This article will give you 4 simple solutions to explore to help bring down your cost in a rising market.
The concept of why insurance has gone up is fairly simple. Insurance is designed to repair or replace damage to your vehicle or pay for someone’s damages should you be found at fault. Those damages can range from their personal vehicle to medical bills. Basically insurance is providing funds to buy car parts or medical services. With the price of those items going up at an exponential rate, the reactionary measure is that insurance companies must charge more to ensure they are able to pay claims. This may require a new game plan when looking at your auto policy to make sure not only that you are properly covered, but not paying more than you should have to.
Here is what you can do:
1) Have your Home & Auto Insurance with the same carrier:
You have heard it everywhere. Bundle and save! Now more than ever carriers are offering generous discounts for having your Home, Auto, and other policies with them. These discounts can range anywhere from 10 to 30%. This could equate out to hundreds and sometimes thousands of dollars, and adding that back into the personal budget is a game changer.
2) Look at raising your physical damage deductibles:
Insurance is the transfer of risk. If you have low deductibles this means you have the insurance company taking on all the risk. Raising your deductible means you will have to pay a little more out of pocket should an incident happen, but you will also pay less for the insurance policy. I would only suggest this if you had an emergency savings that could cover the higher deductible. A mentor of mine once said it is always good to definitely save money on your monthly bill, then maybe save money if an accident happens.
3) Explore your insurance companies telematics program:
Pretty much every carrier has a program where you can download an app and for a set amount of time they will measure your driving habits. This looks to be the future of how you will be rated and eventually you will be surcharged for not doing this. For now there are some handsome rewards for participating. Depending on your driving habits, carriers are giving up to an additional 25% discount on your rate. This is a great option if you are a conservative driver, but maybe had an unlucky accident that you are paying for now. Full disclosure, if you know you are a more aggressive driver this may not be a viable option as in some states this can adversely affect your rate to the upside.
4) Talk with an independent insurance broker:
Independent insurance brokers or agents have relationships with numerous carriers. They can find you the most cost-effective plan not only initially, but over the years they can check the market for you and ensure that you are in an optimal place taking out the stress of you having to take countless hours of contacting each company individually.
While the cost of insurance is going up, if you follow these 4 helpful tips it can help offset a large chunk of the increases that the industry is going through. You can absolutely use all 4 or even try one at a time.
Cheers to saving money on your bill!