How I saved $1,400 per year with one call to the insurance company
Update: I’ve added the contact information for the Erie Insurance agency I went through in Maryland at the end of this article (per the approval of the agent).
In the 12 or so years of having a drivers license, I’ve had a few bumps and a few tickets along the way.
When I moved to Virginia 7 years ago, I was under 25, single and just bought a “sports car” (an Acura TL-S). I was insured through Allstate because that’s who my parents had, they treated us well on all claims, and I just didn’t see a reason to change. My premium in Virginia, prior to moving to Maryland, was $110 per month, or $1320 per year.
Moving to Maryland – Rates go UP!
In 2002, I moved to Maryland, but was still under 25, single and owned a sports car. With all else being the same, you would think my premium would also be about the same, right?
With absolutely nothing changing, and no accidents or tickets on my record, my premium jumped from $110 to $180 per month! That’s $2160 per year, or an almost 40% increase! What did I do wrong?
The Drama Begins
Just after moving to Maryland, I got rear-ended on the beltway (not my fault) and a speeding ticket in VA (I still know I wasn’t going nearly as fast as that cop said). Luckily, the speeding ticket happened at the same time I was switching my license to MD, and Allstate didn’t seem to pick it up in their account audits.
Then I was side-swiped in MD which caused about $4000 in damage to my Acura, and it was blamed on me. Luckily, Allstate has accident forgiveness for the first accident, so I didn’t see a premium increase. That was in the summer of 2003, right before our wedding.
Shortly after our wedding, we moved to a new apartment complex. During the move, while I was driving a moving truck, I smacked into our neighbor’s VW Beetle. They were also moving in that day, which caused a bit of awkwardness for the next year. I caused about $2000 in damage, and there was no accident forgiveness this time.
Fast-Forward to Now
Between that moving accident, and an accident in PA with the Malibu (remember don’t trust Carfax reports), and turning 25 and getting married, and oh, buying a truck and a MINI Cooper and selling the Malibu, our premium is now about $216 per month, or about $2600 per year. Wow, that’s a lot, isn’t it?
Keep in mind, that premium includes 3 vehicles: a Honda Ridgeline, a MINI Cooper and an old Pontiac Grand Am (only liability and comprehensive. No collision coverage). Oh, and we also have homeowners insurance through Allstate.
Getting a Better Rate
Last month was the 3-year mark of being incident free. In the past, I generally ruined that 3 year mark by having another accident or ticket, but this time I’m free and clear to get insurance quotes.
First, I started with State Farm since they’re pretty comparable to Allstate. I wanted to go with a big name company that isn’t known for screwing its customers on claims. I know people with good experience with State Farm so I went online and got a quote.
State Farm quoted me about $2200 per year, or a savings of about $25 per month. At least that would get us under $200 per month, but I wanted a bigger savings. That’s when I remembered Stacie’s old insurance company…Erie Insurance Group.
Erie Insurance dropped Stacie when we got married thanks to my driving record, but I knew that her rates were great with them. Also, a friend in MD also had them (so I knew they wrote policies down here, not just in PA) and had great rates and claims resolution histories. I decided to give it a shot.
The Final Numbers
I was utterly amazed at the rates Erie offered to me. With a straight apples-to-apples comparison, but without the Pontiac, the new premium would be $1393 per year! Since the Pontiac is still half in my father-in-law’s name and also still registered in PA (we keep it there a couple months of the year), Erie wouldn’t cover it so we had my FIL add it to his insurance.
Here’s the comparison:
Allstate, no Pontiac: $2200/year
Erie, no Pontiac: $1400/year
That’s a savings of $800 per year. As for the Pontiac, since we’ll still be reimbursing my FIL (who also has Erie) for the monthly premium, although we don’t know the added cost yet, I expect it will be only $200 per month, far from the current $500 per month with Allstate. There’s a discrepancy in the premiums with and without the Pontiac at Allstate because when I drop the Pontiac, they raise the premiums on the other 2 vehicles to compensate. So instead of $500, I only shave $350 off the Allstate premium (hence the $2200 price, not 2050).
So that gets us up to a total $1100 savings per year. But Erie also offers various payment plans. If we paid the whole year up-front, we could save another 7% off the premium. That brings us down to $1291, or another $100+ in savings.
Switching the Homeowners Insurance
The last $200 savings comes from changing our homeowners policy from Allstate to Erie. We actually get a few more things as well such as identity theft insurance, although I’m not sure we really need $25,000 in coverage, but it’s only about $40 per year extra.
So that’s how we saved about $1400 per year with one call to the insurance company. If you live in Maryland and would like to know the agent I used (I didn’t go straight through Erie’s site), feel free to contact me, see below:
Preferred Insurance Solutions: 301-428-3344, 20030 Century Blvd, Suite 201, Germantown, MD 20874
I believe they’d rather divide up the work rather than send everyone to just my agent so I’ll refrain from putting her name here unless she asks for it (well you now know my agent is female at least!). Tell them “Mike from Clever Dude” referred you. I don’t get any bonus except the knowledge that I’ve helped someone else.
Finally, if Erie isn’t working for you, consider reaching out to USAA. While it is mostly geared for the military community, USAA has really outstanding customer service and offers super competitive rates. Definitely add these guys to your list of companies to consider.
‘The Drama Begins’, second paragraph… I think you meant to say, “Luckily, ALLSTATE has accident forgiveness for the first accident,..”
It’s ok. You just saved a bunch of money. I can understand the hiccup in the midst of your giddy-ness.
I’ve been tempted to switch from State Farm as well, but they’ve been so good about claims that I hate to see what would happen if I went with a smaller (read cheaper) company. I’m paying about $2000 a year for an Acura TL, Honda Accord and Renters Insurance. I’m sure I can get it for cheaper, but I’m happy with State Farm.
* One side note (kinda off subject)… My friends that have been married for about a year and a half now were living in Oakland and got mugged outside of their apartment building. Of course the thief took their cell phones, wallets, and unfortunately their rings. When I heard about this I made some off-hand comment along the lines of “Well,.. at least your rings are at least partly covered by Renters insurance”, and all of the sudden his face went white. He didn’t know things like wedding rings (up to a limited value without an extra rider) were covered by renters insurance and never signed up for any. Poor bastard. Nonetheless,.. I wanted to beat him senseless for not having renters insurance regardless. It’s worse when your whole house/apartment goes up in flames and you’re left with nothing, not even a policy to hold you afloat for awhile.
I actually live in Erie, where Erie Insurance originates from… have had their coverage since I started driving and I’m now 26…
Needless to say I’ve had my own share of bumps in the road… creamed some lady (totally my fault), hit deer, had a UPS truck hit me–all sorts of stuff!
With each incident Erie was super easy to deal with, even when it was my fault I had accident forgiveness and all was good. No rate increase.
Almost more than the price, it’s their lack of hassle when having to file a claim that keeps me one of their customers! I can’t believe the crap some of my friends have to go through when dealing with their own insurance company!
Clever Dude says
@Nick, that’s good to hear because I’ve always been satisfied with how Allstate has handled claims. I’ve also heard horror stories from friends (or online) and feared that I would chase a great rate only to be left in the cold when I needed the coverage. Honestly though, I hope I never need to use the insurance again!
@Rob, thanks for the correction. As for the renter’s insurance, I wasn’t aware of it until well past my college years and into my 4th rental here in D.C. (right after we got married). Granted, I think my wordly possessions probably cost about $5,000 to replace (mostly my computer and then my bedroom furniture), but I also wasn’t aware it covered wedding rings. We do have coverage on the engagement ring in case the diamond falls out and gets lost. That’s by far the most expensive part to replace, although the cost of the gold band would be much higher now that gold is ~$900-1100 an ounce.
Veteran Military Wife at Life Lessons of a Military Wife says
We just saved a bundle too…moving to Germany cuts our auto insurance in half, even though we are covered for something like 7 million Euro for liability (instead of the standard $300k in the States…wow). We also saved on our homeowner’s insurance. The home is a rental now, so no large personal contents insurance needed, but I got the My Safe Florida homes inspection offered free by the state and faxed that to my insurance company, shaving $200 off our bill. A lot of folks are under the impression that this inspection is just for people to try to get grant money from the state to hurricane-proof their home..not true, the inspection can see what proofing you already have (and didn’t know about) and pass that on to your insurance company to get some credits.
Veteran Military Wife at Life Lessons of a Military Wife says
Oh, and regarding who you pick as an insurance company, make sure they are A-rated, or at the worst B+…google that. It makes no sense to have a very low rate and then have an insurance company that will go broke at the first sign of trouble. Also google their customer service.
1) Why not get rid of the old Grand Am, it may not cost much in insurance, but it’s still something.
2) Did you try getting a quote in writing from Erie and showing it to Allstate to see if they’ll match prices? Along those same lines, have you checked out http://insweb.com/? That’s a great resource for getting multiple quotes at one time.
Clever Dude says
@tom, good questions:
1) We’re keeping the Grand Am because it runs great. I admit it didn’t make sense to pay 1/3 or 1/4 of its total value per year to insure it (even at liability and comprehensive), but with gas prices increasing, I’m glad to have a reliable and efficient car to use instead of the truck.
2) Allstate would never have come close to Erie’s rate. I went with Erie because I know their agents are very friendly, and they stand by their service as evidenced by my friend and my in-laws histories. Per “Veteran Military Wife’s” comment above, Erie is A+ rated, so I’m very confident I’ll be happy with them.
Term Life Insurance PopStar says
That’s awesome that you got to save so much on your insurance. I’m with USAA and had an accident 2.5 years ago, and had two claims against me (one was about $4000 for damages, and the other was $15,000 for medical). I rear ended someone going about 20 mph, the car in front of me was sorta totalled, and the car in front of them had two older woman. There was no damage on their vehicle at all, but I’m pretty sure that’s where the medical claim came from (especially since one of them was complaining about medical issues at the site of the accident). Anyway, I was just going to say that USAA (which was the company I was with through my parents policy at the time) gave me great rates about a year ago when I bought my new car. I thought about going with a different company, but everyone else wanted to charge me a lot more. So I guess, besides Erie, there are also other companies that can offer good rates. The only downfall with USAA is that not everyone qualifies for coverage through them. I think you have to have served in the military or have immediate family that has.
Clever Dude says
TLIP: I hear USAA has great rates. My 24-year-old coworker has them for his 2 cars (an older car and a new Chrysler Crossfire). He’s not 25 yet, nor married, but his premium is a little less than our new one with Erie!
USAA is an excellent company! Not only for insurance but also for banking. Paychecks are automatically deposited, a debit card gives you acces to cash at ANY ATM, USAA reimburses us for the ATM fee, up to $1.50 I believe. And if you use the debit card as a credit card at the store then you get cash back every month. We also have life and home insurance thru them. I’ve been a member for about 20 years now, my dad was retired Navy officer. You can go to USAA.com and find the membership requirements.
I will shop for car insurance in November when my current policy expires. I’ve gotten a few claims and they’ll be about $400/year less than what I’m currently paying.
Once Bitten says
Just a note on Allstate’s “accident forgiveness” – you can’t get it in California even though we see ads for it on TV. I’ve been accident and ticket-free with Allstate for 20 years. I have both auto and homeowner insurance and was enjoying a pretty good rate up until this year when I skidded in the rain and rear-ended someone at low speed. No damage to the other car, $6,500 to mine. As a result, Allstate raised my premium a whopping 56%. I’ve started checking with other companies and so far, haven’t yet found anything substantially cheaper. I’d been with USAA years ago but after checking with them, their rate is the same as the new one Allstate’s hit me with. My boyfriend suggested trying Mercury but I haven’t yet called them.
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