Monday, October 16, 2017

Who Needs Car Insurance Anyways?

Photo Credit

Ms. DebtFree here with a quick update on one of my "new job savings goals": car insurance premium discounts!

For the past 11 years I've been insured with the same company.  If some of you are paying close attention to our ages, that means I started driving at 15 with a driver's ed learner's permit.  So, after 11 years of being insured with State Farm I figured it was time to get additional discounts.  I should warn you, this post is partially about my attempt to save money but mostly a rant about the b.s. I went through trying to be more frugal!

The Old

Up until a few years ago, my car was included in a bundled package with my parents' house and multiple family cars.  That changed once my mom and I headed to the PNW for my education.  We shared my car through most of my years in school and were on the same insurance plan together.  When she moved back to the Midwest a couple years ago, we thought we had everything squared away with the car insurance plan.  My dad was feeling pretty generous at the time and offered to pay my $102/month premium until I graduated and was working as a nurse.  I took full advantage of that offer, but now it is way past time for me to be a real adult and pay for my own shit.

The New

Enter my lone day off a couple weeks ago.  I was in a productive mood and thought, why not make an appointment with my agent and see what they can do for me now that I'm on my own?  I spent about 2 1/2 hours in that office reviewing my policy and seeing what rates were available to me.  I also wanted Mr. DebtFree included on my policy since we use my car for most family trips.

The initial quote was $60-ish/month and I got really excited until there was "a problem" finalizing the new plan.  I'm not sure of the job title for everyone in the office, but the actual agent came over to assist and they realized my mom was still on my plan.  A little more number crunching and my new quote was $90/month.  I was like okay, not super great but still a decent savings.  I signed the new policy and went home feeling super happy about taking another step towards saving money.

The B.S.

My happiness quickly turned to confusion last week when my mobile banking app notified me that $103 had been withdrawn in a State Farm transaction.  My initial reaction was "oh, they probably forgot to update my payment amount."  I wasn't terribly concerned until I logged into my online insurance account and saw my upcoming payment the following month was $157!!!  Um, what the hell you guys?!  I promptly called the following morning during a break at work and the rep who set up my policy was also confused and promised to call me back once she did some investigating.  She called after hours and left an overly chipper voicemail informing me they had made "an error" when I was in the office and what I was quoted included my mom on the policy.  So yeah, that $157 was exactly what they were going to charge me to "get caught up" and then my new premium would be $127/month.

So there I was with a $90/month quoted rate that was now almost $40/month more expensive.  An extra $444 per year in car insurance premiums is a huge cost difference!

The Best Rate

Of course being the laid-back, calm person that I am (hahaha not really!), I took this information in stride and decided to find a new company.  I was fightin' mad as my grandma would say!  I didn't and still don't give a rat's behind what their reasons are for screwing with my rates like that.  I spent the next morning, which happened to be another day off, comparing rates from every well-known insurance company and some smaller places like Mr. DebtFree's insurer MetroMile.  The best rate for a comparable plan was from Geico at $94/month so that's who I picked.

Now I'm sure a lot of you are shocked by that high number so let me break it down a little.  I've had two accidents in the last 5 years.  One was "my fault" the other one I was not at fault.  Results of these accidents?  Slightly higher premiums.  I also have higher bodily injury coverage and $500 deductibles for comprehensive and collision, mostly because I know how crazy these drivers are in my neck of the wood.

Many of our favorite frugal/early retirement bloggers, such as the Frugalwoods, don't carry comprehensive and end up saving a ton of money per year.  That's kind of a "later-on" goal for me since I'm currently in the hole with my student loans.  Once I am financially independent I fully plan on dropping a lot of my coverage since I will be in a position to easily replace my car if it gets totaled.

Nuthin' Fancy

My car itself?  A "beautiful" champagne/light gold 2006 Subaru Forester.  I love my car and wouldn't trade it for anything.  I bought it in 2014 with cash after totaling my previous car, a cute little blue Ford Focus.  My Forester is comfy, roomy, holds all of our camping/adventure gear, has been on many road trips with me, and has a sun roof which I feel may be its best feature.  I don't have a fancy car, nor do I plan on buying one.  This car hasn't given us any problems beyond normal wear and tear maintenance and I plan on driving it until it completely breaks down.  Or I hit a deer.  Whichever happens first, I guess!

So there you have it.  I lost my temper and dropped my car insurance agency after 11 years because they bullshitted me on my premium rate.  I have a great car that isn't super special to anyone but me.  My monthly premium went from $102 to $127, before settling at $94 with my new agency.  One day I'll be financially set and can safely drop some of my extra coverages.  Car insurance isn't "one size fits all."  Do some research like I did using Reddit and financial blogs.  Figure out what works best for your personal finances and life situation and then get as many quotes as you can.  And after getting the runaround with my initial company, I fully recommend speaking to a live person before you finalize you plan or make any payments.

Bottom line: don't settle for bullshit and be careful when picking car insurance plans!

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