As life situations change -- children start driving, parents become empty nesters -- switching car insurance companies can result in major savings. Here's how one New Jersey couple shopped around over the years and lowered their costs.
Who: Chuck Russell, 57, who lives in the New Jersey suburb of Cherry Hill and works in engineering.
Why seeking savings: His costs skyrocketed more than $7,200 for his annual premium when his three daughters started driving and were added to his car insurance policy.
How much saved: Nearly $12,000 over several years. “It pays off if you take an hour or two and figure out your needs and make some phone calls; you might save yourself, like I did, several thousand dollars a year,” Russell says.
How he saved it: Russell worked with his agent, Carl Luzi at Luzi Insurance Services, to shop around for the best rates. When Russell switched eight years ago from his longtime insurance company -- where he was paying more than $7,200 a year -- to Mercury Insurance, young driver discounts dropped the cost of coverage for his family and four vehicles by about $2,800.
As his daughters grew up and got married, Russell and his wife remained on the policy, paying about $1,800 in annual premiums. He called Luzi and said the rate seemed pretty good, but he wanted to save more. Choosing Travelers dropped the rate to $1,200, for the couple and two vehicles, and it recently dropped again to about $950 (covering a 2010 Honda Accord and a 2003 Chevy Malibu). He has a $500 deductible for collision coverage and a $500 deductible for comprehensive coverage.
I would never have guessed that I could have dropped it as much as it did,” Russell says. We've been fortunate to not have any accidents in recent years and no tickets. I’m sure that helps.
Advice for consumers: Although you’ve been a loyal customer, don’t feel like you have to stay with one company if costs keep rising. As your life situations change, identify your needs and get quotes from other insurers.
Who can't use extra money, right? I had three weddings. I assisted in all three of my kids with their college bills,” Russell says. “If I had continued to pay $7,400 a year for car insurance, they would have each gotten less for their weddings and toward their college. Just now I’m trying to save for retirement, like most people my age. I’m using some of the savings for that.”
The expert says: Although companies build in discounts for loyal customers, it’s important to monitor and review your rate, Luzi says.
“If your rate stays around the same (2 percent to 3 percent increase or less per year), you know your rate is competitive … . If it skyrockets, you call your agent and ask why,” Luzi says.
He says that if a consumer works with an independent agent (rather than an agent who represents just one company), that professional should be able to tell the consumer which insurers offer discounts, such as those for teen drivers. But overall, he says, having no accidents or traffic tickets as well as a high credit score can translate into low rates.