Thursday, December 7, 2023
Drivers across New York this year have seen sharp increases with their auto insurance, forcing many to evaluate their policies and seek ways to lower their bills.
But where do you start and how do you know you’re making decisions that are in your best interest?
The Long Island Herald spoke with Alex Anderson, agency owner of the Anderson Agency in Rockville Centre, about the most impactful — and smartest ways — drivers can find savings with their auto insurance.
Beginning as early as late 2022, auto and home insurance companies had begun implementing large rate increases as the industry reacts to significantly higher claim payouts for what were historically the same types of claims due to the lagging effect that inflation has on the industry.
Today, Anderson is helping his book of clients navigate their policies and as an agency doing their best to offer solutions that can help loosen the financial burden that the new rate increases have had on families.
Usually, 30-45 days before a customer’s policies are about to renew, they will get an email or letter notifying them of their renewal offer, Anderson said. From there, customers typically will reach out to his office seeking options that can help reduce their rates.
“I had a customer recently come in who had received a rate increase,” Anderson explained. “She wanted to understand what she could do to reduce her costs but after considering all of her options, but decided not to because the peace of mind her current coverage gave her was worth than reducing some premium. She was glad she had the flexibility to make adjustments whenever she wanted.”
While every customer’s situation is different, there are a handful of areas Anderson typically looks at when someone is hoping to reduce what they are paying for their auto insurance.
1. Check your billing and fees
Anderson said it’s important to check if you have had any policy changes, such as getting an additional vehicle. For example, if you have recently purchased a new vehicle your insurance company will most likely not take an immediate payment from you but rather will lump any additional premium onto your following bill.
Also, you should understand fees that can’t be adjusted, like the state’s Law Enforcement fee, a $5-10 charge that is due when you renew your insurance.
2. Ask to re-run your insurance score
Most insurance companies have their own scoring system when it comes to determining the type of rate they will offer a customer. Often, these are largely based on a soft credit profile, similar to what you receive when you get a promotional credit card in the mail, so there is no hard inquiry on your credit.
Anderson said running the report can potentially save you money, sometimes significant amounts.
3. Evaluate your deductibles
Having a larger deductible for your Collision or Comprehensive coverages will result in a lower monthly payment. Usually, someone who is paying a $500 deductible can have their bill reduced if they’re willing to move to a $1,000 deductible.
Anderson said, as a general rule of thumb, the higher your deductibles, the lower your overall premium will be; and the lower your deductibles, the higher your overall premium will be.
While it can definitely make sense, the move may not always be right for everyone, Anderson said. However, it’s worth looking at and evaluating.
4. The impact of a new car
If you’re in the market to buy a new car, you should ask your insurance agent to find out what insurance will cost.
All your agent needs is a VIN number, year of the car and its model.
Anderson shared that every so often insurance for new cars can be flat or even cheaper than older vehicles, but that’s not always the case.
“We get excited when we hear about all of the features on a new car, however, just remember that cuts both ways. While new cars may have more safety features, which is great, they can also cost more to repair after an accident,” he said.
5. Check the drivers listed on your policy
If you have young drivers on your policy (under 25), see if there are additional discounts you may be eligible for, such as a Good Student-type of discount.
If you have an adult child who moved out of the house and your policy still lists that driver, you may be paying an additional premium as a result.
Sometimes a Good Student Discount doesn’t mean that your child has to currently be in school. Your agent can provide you with the details if this can apply to your situation.
6. Drive safely and bundle
If you haven’t received speeding tickets and have not been in a recent accident, over time, that will help with your overall bill. However you can also take the six-hour Accident Prevention class, also known as the Defensive Driving course, and save 8-10 percent on your auto insurance.
Bundling coverage is something — if you’re not doing already — that can have an immediate impact. If you place multiple policies with your agency or company — like homeowners or life insurance — you may be eligible for discounts on your auto insurance, an example.
7. Shop around
Anderson encourages drivers to shop policies to find the right fit and have rates that you can compare against each other.
“You’ll have to decide how much some of the features and benefits are worth it to you, but seeing what everyone offers is an important step,” he said. “You might save a few bucks here and there but you may be back to where you were or even worse in a year, so it’s important to weigh all of the options.”
Even in tighter markets — like the one we’re living through right now — you may still be able to catch a financial break when it comes to insurance costs, Anderson said.
Working with a qualified licensed agent, who you feel comfortable with, and who can evaluate your policy costs and coverage is critically important.
“Taking a little bit of time to speak with someone local who you feel you can trust and who gives you honest advice, even if you make no changes, can give you additional insights or even peace of mind,” Anderson said. “This is a relationship business and relationships are based on trust. When I can help my clients and prospective clients win, we all win.”
Want to learn more about ways to save money on your insurance? You can contact Alex Anderson here.
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