Dave Ramsey is known for helping people to get out of debt and make fun financial decisions that will help you to get to financial peace one day, and it is important to know how to make decisions about things like buying auto insurance, buying home insurance, buying life insurance, investing in the stock market, and also just making wise decisions about the things that you buy, and what the implications will be on your life later on.
We will focus on how to save on auto insurance with Dave Ramsey’s tips. There are a lot of tips that he gives that I 100% agree with, there are very sound decisions that go against traditional thinking because of the way consumerism is going, but we’re going to evaluate and maybe just talk about a few of those and help you to understand now, and help you to understand why I’m not gonna tell you all the different things, you can look at that in the list, but we’ll cover a few of those things.
Tip #1: Raise Your Deductibles
A lot of times, people will think, I want lower deductibles, I want to have a $500 or $200 deductible, but that that is counter-intuitive to saving on your insurance because we think about if I have a claim, I don’t want to spend $1,000, I want to spend $2,000, and I get that. But the reality is that you should not be reporting those smaller claims because they will be charged against you and make your premiums higher. Opt for a higher deductible, and keep the difference in your pocket so that one day, if you have a claim, you better save that money. The difference is having a lower deductible because something may happen versus keeping a higher deductible and saving that money if it doesn’t happen. The reality is you’re able to save that money and keep it, but if you spend it on a lower deductible, that money is gone, keep the money yourself. Then if you need to put it towards the claim, put it towards that.
Tip #2: Try A “Safe Driving” App
The second thing is going to be telematics. The snapshot is one of them that’s with Progressive, that’s their product, Safeco’s got one called the right track, and that’s usually either a device you plug into your car, or it is an app you install on your phone that will help monitor your driving and give you discounts based on your driving habits. A couple of things to make you think about, one of them is if you’re worried about them tracking you, if you have cellphones, they track you a lot more on that but don’t want to do that. Their goal is to help give you a better discount. Second, they are looking to give you a discount if you are better than the average driver. Your insurance rates are all based on averages, they take a big pool of people, look at all the accidents that they have, and then they average a rate. If you are better than the average driver, don’t you deserve better than the average rate? You do that with telematics, sign up for it today, and start saving today, a lot of those companies are anywhere from 5% to 30% you can save by doing that, so don’t be afraid of it.
Tip #3: Pay Your Premiums In Full
You can buy either a six-month or annual policy, and you usually have an option to either pay for it monthly or through EFT, right? Well, the most expensive way is to pay it through the mail, build by mail or go to a place and pay it, that’s the most expensive. The second best will be EFT, an automatic draft where they automatically deduct it from your checking account. The absolute cheapest way for you, the biggest discount sometimes 10%, 15% or 20% discount is if you pay it in full. If you can’t pay the annual in full, get a six-month policy, pay it in full and take the discount. Save that money for yourself.
Have you ever wondered where all that money goes when you pay your insurance? Do they invest it? Pay employees? Keep it under their mattress? We have all the answers and more!
Tip #4: Bundle Your Policies
If you got your policy with more than one carrier, you’re losing out on bundle discounts. If you’ve got cars and you have one insured with one company and another insurance company, you’re probably paying 20% more than you have to because you’re doing that, if you have your cars with one company and your auto with another company, you may also be paying 10%, 15% or 20% more than you ought to for doing that. Bundle them together, and make sure you have them together with the independent insurance agent in one place. You typically will get lower deductibles whenever you are bundled together. You have a claim, like with Safeco, which affects your home and auto. Let’s say it’s a hailstorm, they will apply one deductible. Isn’t that great? So instead of $1,000 for your house and $1000 for your car, it’s $1000 for everything, that’s a good deal.
Tip #5: Shop Around
If you’re with a captive agency, they only got one option for you. You need to call an independent insurance agent, they can help you define many different options because they represent many insurance companies, and they can find the best deal for you.
Tip #6: Get Enough Coverage
Make sure that you’re buying the right insurance. Many states have a minimum amount of coverage that you can buy on your auto insurance, and unfortunately, the preferred companies don’t typically do that. It’s the non-standard auto companies that will do that. Their baseline for average rates of non-standard companies is typically higher than preferred because of the clientele that they typically have. Non-standard companies have clients with driving history issues such as accidents, tickets, or bad credit. Preferred companies have people that have lower accidents, lower violations, and also better credit. Already out of the box, you have a better rate with the preferred company than the other. Also, if something happens, you don’t want to pay out of pocket for a claim if you only have $100,000 from your liability insurance policy. You have a claim, and the bill comes out to be $150,000, guess who gets to pay the $50,000, you do. It comes from your checking account, or whatever means you can sell or liquidate to get it.
Those are some tips from Dave Ramsey that we agree with 100%, and those are all great tips for saving on your auto insurance.
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Beaux Pilgrim, CEO