Recently when grabbing the mail. I got the not so pleasant surprise, that it was time to renew our vehicle insurance policy for 2015.
I had mixed feelings about this. On one hand I knew this would take a chunk out of my savings rate and cash I had available to invest. On the other hand I knew this presented possible presented an opportunity to save some money and share the results with you.
Upon opening the envelope. I was made aware that for our vehicle insurance policy we owed $2458. On Monday I decided to take a couple of hours and investigate the possible options available with my insurance provider to see if I could find some savings.
Compare Costs With Other Insurance Providers
I compared costs with other Vehicle Insurance providers. It turned out that our current vehicle insurance providers was already the cheapest. I suspect this was a result from comparing prices with competitors the last couple years. Even though they were still the cheapest. It was not a waste of time to make sure they were still the cheapest insurance providers with similar coverage options as previous years.
Combine Exposures With One Insurance Company
Due to purchasing a home this fall, I thought this would be an excellent option. To combine our home insurance and our vehicle insurance under one insurance company. I figured this would surely reduce our combined insurance premiums. Well turns out it didn’t work out as planned.
Last summer I got into at-fault vehicle accident in a parking lot. Luckily for myself being claim free for the last nine years, with the same insurance company for those nine years, they gave me a freebie per say and did not increase my insurance premiums.
But I suspect it is on file when other insurance companies pull up my file. Which is why my current insurance provider is still the cheapest. And remains cheaper even with bundling the house and vehicle under one insurance company.
Those with a clean driving record I believe would benefit from looking into possible options of combing exposures under one insurance policy.
Which brings up the point. Drive carefully as traffic convictions and no-fault or at-fault accidents result in increased premiums.
Reduce Physical Coverage
This was actually done last year. On my 2005 vehicle with 340,000km. I removed my physical coverage which reduced my annual premiums by $500. No additional savings were available here, but if your vehicle is getting older with a large number of kilometres I believe they comes a point where the extra physical coverage it not worth the cost.
Vehicle Insurance To High! Increase Your Deductible
Increasing the deductible from $500 to $1000 resulted in an annual savings of $139. Which I think is a worthwhile investment for a couple of reasons. We have been taken steps to minimize the amount of time we spend behind the wheel. Less time behind the wheel means less chance of needing to make a claim. Not to mention numerous other vehicle related savings, such as maintenance, gas, and the best part of riding your bike more is the health benefits.
The Savings
An annual savings of $139 might not sound like much and it is certainly not as great of savings as the last two examples. But lets say you invested the $139 annually. Earning a 7% return on investment after 10 years it would be worth $1920. More than enough to cover the difference if required when having to play the deductible when making a claim.
Deciding to not live in fear that something bad lurks around the next corner. Even after having to pay my $500 insurance deductible last summer. I still believe increasing your insurance deductible is a solid investment. I am confident that with reducing our dependence on driving, and the results from investing the $139 annually eventually I will be running on a surplus and saving money even if I one day have to pay $1000 instead of $500.
It is important to note that the $139 a year savings is only for 2015. Next year it could be more or it could be less with changes to my policy. Meaning the savings might not be exactly as described but the concept of increasing your insurance policy deductible and saving money remains valid. Especially if your deductible is $0 or $250 an increase to $1000 could possible save you even more money annually.
Let me know if you have any additional advice on ways to reduce your insurance premiums. Hopefully you enjoyed Vehicle Insurance To High? Increase Your Deductible.
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