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Save money by comparing auto insurance rates

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Like I mentioned last week, I’m going to post ways to save money on recurring costs every Monday. Today: auto insurance.

I discovered from personal experience how easy it is to save money on this. When I first bought insurance, I shopped around and ended up buying 21st Century, one of the worst companies on the planet. They lost my paperwork for THREE MONTHS, overcharged me, and sent me about 3 letters per week in the mail. Leave me alone you horrible company.

Anyway, I feel ridiculous saying this, but I saved a bunch of money by switching to Geico. Seriously. I called up a bunch of places and ended up saving about $175 per 6 months, or $350 per year for a few hours of calls. Plus, I’ll save that much every year, making it a pretty good rate.

Now, to today’s way to save money: Here are the phone numbers for some of the biggest auto insurers. (I included only phone numbers on purpose, because clicking around all their shiny websites is a great way to get distracted and do nothing. Plus, the best deals come from talking to someone on the phone.) Call them up and spend an hour figuring out which is the best value. Switching is easier than you think, and it’s a one-time thing.

Geico: 1-800-861-8380
State Farm: 1-877-734-2265
Allstate: 1-877-572-5268
Progressive: 1-800-776-4737
AAA: 1-877-323-4222

PS–The best line to use is not, “Is that the best price?” but “What other discounts are available?”

Update: Some really great comments below, including points about cost vs. value (“don’t just pick the cheapest insurance, pick the best value”) and a reminder to re-shop the rates in a year.

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  1. I worked for a company where employees would often ask why the company wouldn’t switch to Geico, and apparently Geico requires all sorts of personal information about every employee.

  2. Too bad I live in Massachusetts.

  3. It’s very, very important to remember that an insurance policy is just a piece of paper. If the company cannot back up that piece of paper when claim time comes around then that’s all you have — a piece of paper.

    You must always, always ask your would-be insurance company what their A.M. Best rating is. If they feign ignorance — or, worse yet, if they really don’t know — run away. Take nothing less than an “A” rating. I’ll work with nobody with less than an “A+” rating. There’s just no need.

    Saving money by buying cheap insurance will cost you far, far more in the long run.

  4. Check out group rates as well. My university (Canadian) has group rates through TD Meloche Monnex for alumni, and they kick ass compared to everywhere else I looked. I know several friends who have subsequently switched because the group rates are unbeatable.


  5. If you qualify, USAA is the way to go. My insurance quote from them was 20% less than the next lowest I got (Geico). Unfortunately, you can only get it if you’re in one of three categories:
    * Active duty officers and enlisted personnel; National Guard, Reserve officers and enlisted personnel; Officer candidates in commissioning programs
    * Adult children and former spouses of USAA auto or property policyholders
    * Former USAA auto or property policyholders

    I qualified because my parents use it. USAA’s service is truly unbeatable. Phone is: 1-800-531-8080. It might be worth it give them a call to see if there is any other way to qualify.

  6. It is amazing how literal some of these companies stick to their tag lines. I am with State Farm. I happen to know that they aren’t the cheapest auto insurance I could be getting, but I am okay with that for a reason.

    One philosophy you subscribe to is to be frugal, not cheap. Spend the money on things that matter to you. well, I was in a car accident earlier this month and as soon as it happened, I realized that I did not have my insurance card on me (this isn’t a habit of mine, it just happened). The first person I called (after calling 911) was my insurance agent at State Farm. She gave me my insurance number and asked where I was.

    Right after the police showed up and started to survey the scene, my insurance agent pulls up with all the paper work I needed to hand to the officer. As long as this company continues to go that extra mile for me, I will be willing to spend money with them.

    As a side note, my vehicle was totaled and I had to start looking into the new car vs. good used car market. I read your article on the matter (after I purchased my new car) and couldn’t agree with you more.

    I spend a good 45 minutes in the morning and 30 minutes to an hour every evening commuting so driving is very important to me. I not only got a new car, I got exactly what I wanted and what made me feel comfortable with my purchase.

    I couldn’t be any happier. But I do miss my old car sometimes.

  7. Oddly, my experience was the opposite. I loved 21st Century, tried switching to Geico, and had a horrible time. Took them 3 months to process my application, and then they needed all kinds of personal information about my roommates (who were being excluded from my policy). They were having an issue with one of my roommates because he had an accident on his record. What the heck? I put on there that he was excluded. Told them no thank you and went to 21st.

  8. the last line”Switching is easier than you think, and it’s a one-time thing.” is only half true. the best way to do this is to shop around every few years. It is the same with cell phone plans and other insurances. what seems really cheap now seems to incrementally creep up and in a few years, some other company will be more than happy to beat your current cost.

  9. Great point, David. I just set a reminder to re-check the rates 1 year from the date I signed up.

  10. I also switched to geico and got a very good rate my first year. They jacked it up the second year telling me I received the initial incentive rate, but this new year’s rates were the on-going rates. They assume people won’t switch back since it’s so much hassle.