Every day we are bombarded with advertisements telling us how to save money on car insurance. There is a good way to save money and a bad way. The good way does just that – save you money without taking away valuable coverage that you need. The bad way is, well, not listening to this show and learning how to do it right! This week, Karl Susman and guest Maureen discuss cost savings tips for auto insurance policies.
BEGINNING OF TRANSCRIPT
Karl: This is Karl Susman. Today we are going to be discussing tips and tricks for saving money on your current insurance. And today we have long-time friend and client Maureen on the line. How are you today?
Maureen: I’m good. I’m great Karl. How are you?
Karl: Excellent, excellent. Thanks for taking the time this morning on to be with us. I, it’s funny to say that you are going to be our generic consumer for the call today. So does it feel to be the generic person?
Maureen: I don’t know that. I’ve never been called generic in my life. But I’ll take it [unintelligible 00:54 – 00:55]
Karl: Generic, you’ll have to be, you’re going to be the common person today. What can I tell you –
Maureen: Got it, got it.
Karl: We’ll jump right in and we’re going to talk about today is ways to save money on car insurance which is pre near and dear to many people’s hearts, I think.
The first tip I want to give is to tell people that they need to shop around for auto insurance which seems obvious but it’s not necessarily the easiest or the, there are different ways to do it correctly. How do you, let’s just say if I told you shop around for your car insurance, what does that mean to you?
Maureen: Well, looking at [unintelligible 01:27 – 01:27] places that I have to tell you, shop around to me I [unintelligible 01:31 – 01:31] hopping online, selling out an information [unintelligible 01:36 – 01:37] and then literally just choosing like that’s the cheapest one so, let me take that one instead of looking a little bit more deeper into it more than just prices
Karl: Well you were the, you were the perfect generic person today because that is the, that is what majority people do. They just jump online, whatever looks to me the least expensive, they just grab it. And the truth of the manner is auto insurance is much as its people like to say it. It is not a commodity. It’s not one size fits all. It’s not an appliance that you buy in a whether you get the TV at Costco or you get the TV at Walmart or you order it online then you’re going to get the exact same model make in br anded product. Auto insurance is a lot more complicated than that and unfortunately, a lot of people are sort of falling into that trap in assuming it’s all the same.
Let me give you the right and the correct answer to [unintelligible 02:25 – 02:25] car insurance, it’s not just you go online, r andomly pick the least expensive number. What you wanna do is you wanna work with an independent agent or broker. And the reason for that is independent agents or brokers have the ability to actually shop around for you. So they’ll actually go to the open market and they’ll check with all the top insurance companies and then they’ll come back and they’ll say “ok this company will give us this coverage, and this price. This company will give us this coverage and that price”. And then another show will talk about different coverages and why it actually makes a difference that we’re just talking about saving money in this particular case, the agent will be able come to you and say “this is the best price that we’re able to find for you with the coverages that you need.” And it’s almost always going to be the, the best options for you versus r andomly going online and just picking number out of h and.
Maureen: Alright, I can tell you that I, being the generic person that I am and having pick a r andom number [unintelligible 03:20 – 03:20] internet that I haven’t even spoken with an insurance agent except for the one time I had a call because I forgot my lock and password. So –
Karl: Shame on you.
Maureen: I don’t know all the details, any of the information, what’s covered, what’s not so there is definitely [unintelligible 03:27 – 03:27] it’s not the only [unintelligible 03:39 – 03:39] using an insurance agent.
Karl: Right. For sure. You know the thing is that I have to just correct you because it’s like, it hurts my brain. We pronounce it insurance not insurance. I don’t know why it was just one of my [unintelligible 03:50 – 03:50] So I have to get that correct from you or it’s gonna drive me crazy.
Maureen: In – one more time.
Karl: Insurance. There’s no –
Karl: There’s no emphasis on Insurance.
Karl: What can I tell you? Let that be my [unintelligible 04:05 – 04:05] right. Alright.
Maureen: Got it.
Karl: So the first thing is when you’re looking to save money on car insurance, go to independent agent or broker, have them do the shopping for you because you’re getting the added bonus of a person, you’re going to get a better rate, and most importantly you’re going to know what you have and what you’re going to have and advocate for your going forward. So that’s the first thing.
The second thing is, a lot of times people are carrying a deductible on their vehicles, deductibles for the physical damage for their vehicles. You sometimes prefer to [unintelligible 04:33 – 04:33] or collision other than collision. And that’s basically the amount of money you’re going to pay to fix your car in the event of the accident. You’ve heard of that with that sort of terminology you’re used to hearing?
Maureen: Yes [unintelligible 04:47 – 04:47] collision as what I used to hearing.
Karl: So, normally there is a deductible. People will carry a deductible from $250 to $500 sometimes. And here’s a little secret for you, well, let me give you the obvious first. You assume that the higher the deductible, the lower the premium, and the lower the deductible, the higher the premium, right? Which makes sense if you’re going to be out of pocketing more in the event of an accident, then the premium you’re paying all along will be less and vice-versa. That makes sense, right?
Karl: Okay. So everyone said well I want a large deductible. But I don’t necessarily want to have be out of pocketing that much money in the event of an accident. So here comes the magic. Did you know, did you know, I have wish i have sound effects, maybe I can get some of my sound effects, drum roll. But did you know that the only time that you would be responsible for the deductible on your vehicle would be in the event you have an accident that was your fault?
Maureen: No, I did not know that. I thought that your deductible is your deductible, is your fault or somebody else’s, you still have to pay all of that out before you get the initial amount.
Karl: That’s what everybody thinks but let me explain it to you.
Karl: So, let’s say you have an accident with somebody and let’s assume again that’s not your fault. So what’s going to happen is the damage to your vehicle is your vehicle is going to get fixed and the other insurance company insuring the person you have an accident with is going to have to pay for. Make sense, right?
Karl: Now let’s also, let’s assume that you have an accident and the other car doesn’t have insurance. Then there’s a specific coverage that we can add on to your auto insurance it’s called waiver of collision which basically says in the event you have an accident and the other person does not have an insurance, they will wave your deductibles. So you don’t pay and being out of pocket. Your insurance company simply fixes the car. So whether the other car you have an accident with has insurance or not, you’re not paying for the deductible for your car. The only time you would be responsible for that would be in the event you have an accident and the accident is your fault, then you will be responsible for that deductible. So knowing that, if you think you’re a good driver, right?
Karl: You more likely will be able to go with a higher deductible now because you figure well. If it’s my fault, ok I’ll have to st and that money for the deductible. But if it’s not my fault, it doesn’t matter what my deductible is.
Maureen: Absolutely with a higher deductible knowing all of that, yeah.
Karl: And it makes sense. A lot of people don’t realize that and they think that, like you said that all deductibles are deductibles and I have to pay it [unintelligible 07:19 – 07:19] Incidentally knows good insurance company is if the accident is not your fault, not only will they repair your car and wave your deductible, but they’ll turn around and go back to the other insurance company for the person driving the other car and then they’ll subrogate, meaning they’re going to collect the money they pay to fix your car to reimburse themselves in. And once they have done that then they won’t even have to charge you to a higher premium for having been involve in an accident.
Karl: That’s another important thing to be aware of the all insurance company is not created equal. Some of them will say “it’s not just our process or we don’t go, or we don’t spend the time and the money to [unintelligible 07:57 – 07:57] or money, we’ll just trace the premium that you’re paying instead.” But the better companies, they wanna be able to maintain a better rate for you so the way they do that is by subrogating and going to the other insurance company for the other driver and collecting the money back.
Maureen: That’s awesome.
Karl: That’s the way –
Maureen: [unintelligible 08:16 – 08:17] information, I had no idea. It’s awesome.
Karl: You see, miss generic person, now you know, you’ve learned something else. Another thing –
Maureen: I’m becoming less and less generic as we go on.
Karl: That’s right. Now you’re going to become the insurance guru. Another tip that I can give is a lot, is people need to fondle together their auto insurance with their property insurance. Now I say property insurance because a lot of people think that it’s just home and auto, home and auto, that’s what they have trained to hear from all of the messages. Bundle your home and auto together and save money. Well it’s not just home owners insurance. You can usually get a discount on your auto insurance by bundling together your home insurance, if you own a condominium your condominium insurance. Even if you’re a renter, and you’re renting an apartment, you can bundle your renter’s insurance along with your auto insurance, and you can save money on both of those policies as well.
Maureen: That’s something else I definitely didn’t know either of each. Right now I have my car covered to one organization or one company [unintelligible 09:16 – 09:16] insurance completely somewhere else. I thought you have to own your home or you own your property that it could be rental combined as well.
Karl: Alright, that’s what most people think. They think the only discount is available of your home owner but it’s not. You can be a condominium owner, you can be a tenant and an apartment building. And if you bundle that together, you’re going to have the benefit of a discount there. And again, some of the better companies they won’t just give you a discount on your auto insurance, they’ll give you a discount on the auto insurance and on the property insurance, whether be a home owner or a condo or renter’s policies. So you’re really be able to double the discount on both ends.
Maureen: [unintelligible 09:50 – 09:50] discount.
Karl: Tada! That’s right. Everybody –
Karl: Everybody loves to save money and if you’re looking –
Karl: If there’s a way to do it, we’ll find it. The last little tip I want to give you today is since we’re talking about discounts is to let you know that you can find discounts for your car insurance that you probably didn’t know existed. There is no st andardized formula or name for different auto insurance discounts. You hear good driver, excellent driver, prefer driver, extreme driver, those are all discounts, but they’re just marketing names that different insurance companies that come out with for that with the exception in California [unintelligible 10:27 – 10:28] good driver doesn’t have definitions based on California proposition 103 many years ago. But having said that, you can get discounts for everything. From being a college graduate to being with a certain profession, to being a member to a credit union. You can even get a discount with certain carriers that I know of if you’re a member of a college alumni association. There’s even a company that I know that would give you a discount in the event that you’re a civil servant, meaning if you work for government agencies, they’ll only give you a discount if you have a family member that works for a government agencies.
Karl: So there are –
Maureen: I –
Karl: Go ahead.
Maureen: The discount that you’re naming nobody has ever named those stuffs to me before. It’s all we hear in the driver, great driver, maybe [unintelligible 11:19 – 11:19] but never the discounts that you’re listing right now.
Karl: Yeah, good driver discounts and good student discount that’s another issues. Well if you’re a full-time college student there’s discounts out there if you’re a 3.0-grader discount student, there’s a discount for that 3.5. I mean, again, there’s no st andardization for it. Whatever one particular insurance company says is going to be a discount, they can offer that and they do. This is another reason why it’s important to go to an independent agent or broker because once you’ve give them your personal information, they can say “ah, you’re this, you’re this, you’re this, I know a company that would give you discounts for that”. And they can turn around to get your rate that’s probably better than you were finding just go online by yourself and [unintelligible 11:59 – 11:59] around. So –
Maureen: That’s definitely nobody online just gonna ask that kind of personal information when it’s just computerized. Well, another benefit of speaking to a human being.
Karl: There you go, I agree, I agree. Well listen, those are the tips for today that I wanted to go over for saving money on car insurance. If you have other questions or you wanted to talk about anything more specific about discounts or maybe you would talk about some companies and what their discounts are, we can do that in another show.
Karl: But if you have any questions in general about the discounts that I’ve talked about, or do you have any other questions in general about discounts for car insurance?
Maureen: We know it. My only question will be [unintelligible 12:36 – 12:37] and finding me for more discounts?
Karl: There you go. And you can think [unintelligible 12:41 – 12:41] to say that. So perfect, right?
Karl: We will definitely do that for you, we’ll definitely do that for you. Well again, thank you everyone, thank you everyone for listening and thanks for subscribing to our podcast –
Maureen: Yeah, thank you.
Karl: And we will walk with you, we’ll talk next week.
Maureen: Sounds great.
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