Around this time of year many people get renewal notices for their auto insurance. More often than not they will briefly scan the notice and if the premium hasn’t increased substantially from the prior period they’ll just file away the renewal paperwork and let the auto-payment on file continue to be processed. But when I got my Allstate auto insurance renewal notice I was a bit surprised that the monthly insurance premium seemed to have risen much more more than expected. It had jumped by about 20% or $100 without any adverse driving incidents from my end over the last 6 months.
After calling Allstate to question the new price I was basically told that premiums were increasing across the board in my area. I didn’t quite buy this story. So I decided to spend a few minutes getting a couple of free quotes from GEICO and and Auto insurance portal website Esurance, who have historically provided competitive pricing options. Using my Allstate renewal notice I just plugged in exactly the same parameters (deductibles, coverage options etc) to get a like-for-like comparison on costs. In both cases the premium returned was much lower than what I was playing with Allstate. This was surprising because I also get a multi-policy discount with Allstate since I also have my home insurance with them.
I decided to give Allstate another call and shared my findings with them to see if they would budge on their renewal insurance premium amount. I wanted to stay with them since I didn’t want to deal with the hassle of changing nor lose my safe driver and multi-policy discounts. After spending a few minutes with their representative going though what I found she basically said they could not match the quotes I was getting. In fact she kept on questioning whether I had actually done I like-for-like comparison. I then sent her a copy of the quote from GEICO and when she saw it she was pretty much speechless and just said I should go with the best deal I can get.
The GEICO rate was over $200 cheaper than the Allstate renewal rate over the six month coverage period. I guess GEICO’s slogan of 15 minutes will save you 15% held up in this case. Though I know that insurance companies do lure new customers in with initially reduced rates and then pass through semi-annual increases in the hopes that they won’t bother to check around. Which means you should really do multiple quote comparisons, no matter who your insurance provider is, every time your auto insurance is up for renewal. Most of the bigger players are good with customer service and coverage options, so it really comes down to a price. If the savings are big enough the minor hassles of switching are definitely worth it.
What about the multi-policy discount when I unbundle my home and auto insurance?
Another big concern I had was losing my multi-policy discount with Allstate since my home insurance policy was also through them. In fact if my home insurance premium increase (due to losing the multi-policy discount) was greater than the savings I could get from cheaper auto insurance it wouldn’t have made sense to go with GEICO. In my case the Allstate agent I spoke to told me that my home insurance policy would rise by between 10 to 20 percent (~ $80 to $160 per annum) without the multi-policy discount. But since my auto insurance saving would be much more over the the next 12 months, the potentially higher home insurance premium was worth it. And since I had renewed my home insurance policy recently and got the Allstate multi-policy discount I won’t have to worry about a home insurance premium rise for at least another 10 months. More than enough time to go online and get cheaper home insurance quotes!
Based on my experience here are the key takeaways which hopefully save you a bit of money when it comes to auto insurance.
- Try and plan your auto insurance renewal after your home insurance to get the multi-policy discount benefits, while still keeping the option open for lower auto insurance premiums if you can find them
- Shop around online whenever you have to renew any type of insurance. Their are plenty of deals to be had in the competitive insurance marketplace we have in most states
- Even with a multi policy discount you may be over paying for car insurance
- Do your homework by getting free quotes online with major providers and have the quote handy to send to your existing provider to see if they will match the competition. If not, switch!