Sense to Save

Saving on car insurance: We’re making a one-time payment

Our car insurance for May through November will cost $366.30. That’s a lot lower than I thought it would be, and about $65 less than last time. I’m pretty happy about that, and I hope it will continue to go down as time goes on.

Anyway, we had to decide how many payments we wanted to make. For every additional payment, we’d have to pay about $4 more.

Two payments: $187.15 each for a total of $8 more
Three payments: $150.52, $113.89, $113.89 or $12 more
Four payments: $95.58 each, or $16 more
Five payments: Not an option, for some reason
Six payments: $65.05 each, or $24 more

We had to decide: Should we pay it off and just get it over with and save the most money, or make installment payments, and not have to tie up $366 all at once?

We opted to make a one-time payment. We have the money to do that right now, and it’ll be nice not to think about it again until October or so. One less payment each month means that money can go toward other goals.

And, if we do need to tap into the emergency fund from now until our next car insurance payment, we won’t have to worry about making the car insurance payment, since that’s already taken care of. So, one less thing to have to worry about.

The money isn’t due until early May, so I’m going to put it in our ING account, where it’ll grow like $1 in interest while we wait to pay it.

Saving on car insurance: We were over-and-under-insured!

In my last post on car insurance, I mentioned that I’d be making sure we weren’t over-insured or under-insured in certain areas.

After taking a closer look at our first-party benefits, I realized that thanks to benefits from my husband’s employer, we were already covered in these areas.

I called our health insurance company to confirm that the HMO would pick up where our car insurance company left off, with regard to medical expenses. Since that’s how they do it, we’re able to take the minimum $5,000 medical expense coverage on the car.

We determined that we won’t need car insurance coverage for lost wages, accidental death or funeral expenses, as we are already insured in those areas.

So, lowering that aspect of our car insurance will save us $34.40 over six months.

I feel silly–I wish I understood our car insurance policy when we bought it six months ago! I could have saved even more. Oh well. Better late than never!

Next, we decided to increase our property damage liability insurance to the maximum $500,000. The likelihood that I drive into someone’s house is small (I hope!), but if I do, having a half million in coverage is nice to have. Increasing our policy in that area adds about $8 to the six-month premium. Not bad.

In a comment on my last post, Cromely mentioned looking into umbrella insurance to add more liability coverage for about the same price. I’m gunna check that out. Thanks for the tip!

I’m shopping around for better rates, but I doubt any company can come close to our current quote of less than $400 for six months. We’ll see.

Saving on car insurance: Our deductible

Our car insurance is up for renewal once again, and we’re shopping for quotes. Before I start looking at other companies, I’m tweaking the numbers with our current company (Geico) to make sure we’re not over-insured in some areas and under-insured in others. I’ll probably do several posts, focusing on one aspect at a time.

If we renewed the exact same policy, it would cost $400.70 for six months for the one car on our policy.

Here’s what we can expect if we change the deductibles.

Right now, we have $500 deductibles for each, and I think that’s where we’re going to stay. Increasing the deductible to $1,000 would save us $4.20 on comprehensive, and $13.70 on collision, for a total of $17.90 off our six-month premium. I’d rather spend that $17.90 and only have a $500 deductible, rather than save a few bucks with the possibility of paying $500 more when filing a claim. Our emergency fund isn’t beefy enough at this point to make me comfortable with a $1k deductible, especially when the savings are minimal.

We’re comfortable with a $500 deductible. Choosing this option saves us $6.20 on comprehensive and $68.70 on collision, for a total savings of $74.90 for a six-month policy. If we had to file a claim on a $250 deductible, that would be like paying $318.70 out of pocket ($250 + 68.70 premium). So, if we end up having to file a claim, the $250 deductible would be about $182 cheaper than it would be if we had a $500 deductible ($500 – $318).

Still, that’s a savings realized only if we file a claim. We don’t drive much, and that $500 deductible is a risk we’re comfortable taking (and paying) if we need to.

Note: I haven’t had much experience with car insurance. I haven’t had my own policy for long, so I’m still somewhat new to this whole process. I’m sharing these posts to give you an idea on what we’re considering with regard to car insurance. When changing your own policy, be sure to use your own numbers and take your own situation into consideration.