Premium Advice: Shop Around for Car Insurance

Shopping for auto insurance probably isn’t a priority on your pandemic “to do” list. Most car owners never do it, even in normal times. But if you’re stuck at home with extra time on your hands, spending a few hours collecting rates from insurers likely will pay off.

Most consumers stay with the same company year after year, often concluding that steep discounts they get for their loyalty or not having any speeding tickets or accidents means they won’t find better pricing elsewhere. That’s usually untrue. Although you might be getting a price break from your current company, its competitors will also likely happily offer low prices to lure you away.

Nonprofit consumer group Delaware Valley Consumers’ Checkbook magazine and Checkbook.org compared prices charged by the Delaware Valley area’s largest auto insurers and found that most area drivers will save $500 or more a year by making a better auto insurance choice. Many will save $1,000 or more. Until August 1, Checkbook is offering free access to its ratings of auto insurance companies to Patch readers via Checkbook.org/PatchDEL/auto-insurance.

Here are the types of savings Checkbook found are available to most area families:

• Checkbook’s illustrative couple with two cars living in Montgomery County with clean driving records would pay $1,067 per year with GEICO, $1,123 with USAA, or $1,144 with Progressive, compared to more than $2,000 per year with Allstate and State Farm, and more than $3,300 per year with Donegal and Penn National.
• If that couple lives in Burlington County, N.J., they’d pay $1,294 per year with Esurance, $1,307 with Palisades, or $1,334 with GEICO, compared to $3,162 with AAA and $4,300 with Farmers.
• If they moved to Philadelphia and added a teenage son to their policy (gulp!), they’d pay $3,618 per year with Progressive, $4,142 with GEICO, $4,324 with AAA, or $4,522 with Liberty, compared to more than $8,400 per year with Electric and State Auto.

As a result of the COVID-19 pandemic, most of the largest U.S. insurance companies are giving their auto policyholders some form of relief, as changes in driving habits have resulted in fewer accidents and claims, which will save the insurance industry tens of billions of dollars. Some companies are giving customers bigger breaks than others. But a 25 percent discount off a few months’ premiums isn't a terribly generous offer if that company charges twice as much as its competitors. Don’t let news of one insurer’s generous pandemic refund stop you from shopping other companies, which may have lower rates.

You don’t have to wait until your current policy term expires to take advantage of the savings you’d get from an insurance swap—when you switch to a lower-priced company, your old insurance company will refund the unused share of your premium.

You also don’t have to forsake service for a better rate. In addition to comparing the prices offered by local insurance companies, Checkbook asked insurance customers and auto body shops rate insurers for their claims-handling service. Checkbook’s ratings reveal that some highly rated companies offer low rates.

You might think that if you’ve been driving for many years without an accident and with few speeding tickets that insurance companies will offer you their best rates. Unfortunately, that’s not necessarily the case. Insurers increasingly are offering their best rates only to customers who meet criteria that have nothing to do with their driving histories. For example, most companies offer their lowest rates only to customers with excellent credit scores and who are college graduates and homeowners. And companies are increasingly using secretive and opaque methods to calculate rates. With most companies, your credit score and other information may matter more than your driving record.

Research by Checkbook and other organizations has found drivers with fair or poor credit scores can pay twice as much as similar drivers who have excellent credit scores—a similar penalty for having a recent at-fault accident or several speeding tickets in the last year.

You want to buy enough coverage to protect yourself—but not so much that you’re wasting money. Avoid common car-insurance mistakes by doing the following:

• Make sure you maintain the highest deductible amount with which you’re comfortable.
• Be vigilant that your coverage doesn’t lapse.
• Consider dropping collision and comprehensive coverage when your car’s value drops below $3,000 or so.
• When shopping for coverage, find out how much more it will cost to raise limits beyond standard coverages. It is usually inexpensive to increase limits for liability coverage above standard amounts.
• Carefully consider the extras. Some optional coverages, like rental car reimbursement coverage, aren’t worth much, but companies charge a lot for them.
• For repairs, insist on using an auto body shop you can trust—as long as it charges reasonable rates. At Checkbook.org, you’ll also find ratings of area auto body shops for quality and price.

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Delaware Valley Consumers’ Checkbook magazine and Checkbook.org is a nonprofit organization with a mission to help consumers get the best service and lowest prices. We are supported by consumers and take no money from the service providers we evaluate. You can access Checkbook’s ratings of car insurance companies free of charge until August 1 at Checkbook.org/PatchDEL/auto-insurance.