$1,021 Savings on insurance
 

I saw a lot of insurance price discussions here. I'm paying $680 for full coverage, here's how.

Today I was quoted $1,701 with a $500 deductable. I was able to reduce the price to $680 by maxing the deductable to $2,000. ($1,021 savings annually)

I had no idea the deductable could have that kind of impact, so I wanted to share.

My last claim was in 1998, and I'm a cautious driver (and a careful parker) so I'm willing to bet on myself. If you are in the same category, you could consider this too.

This is through Met Life. I use Grundy for my other special cars. A Chevelle and a 1934 Ford cost about $600 combined, small deductable. The catch is that they limit usage. You can joy-ride all you want but you can't commute or run errends. The Z is my driver, so I don't qualify with Grundy.

On a car i wouldnt max the deductable. On a bike however, i dont (and im pretty sure other riders are the same) plan on getting things fixed by insurence...so i maxed my deductable on the bike...although im paying $675 a year..lol

Dude Im 31 & never needed to file a claim on a car before. Im currently on my second. The first claim was due to a giant hail storm that hit and pinged my WHOLE car up!! A tree top also snapped off and landed on my trunk breakin the spoiler and rear taillight along w denting the trunk. This all happened BEFORE MY FIRST OIL CHANGE! Now Im currently on my second due to a deer that jumped out in front of me. My advice is DONT CHEAP OUT ON THE DEDUCTIBLE!! Itll prob end up biting you in the ***.

It's just math and probability.

If you save $1021 by switching from a $500 to a $2000 deductible, your deductible will increase by $1500 if you have a claim. Thus, if you can go more than 1.469 years ($1500/$1021) without a claim, you're saving money by using a higher deductible.

There's the math. You have to determine the probability of going more than 1.469 years without a claim.

Most finance companies will not let you go over a $1,000 deductible on your car unless is in storage.

Like moto italia said "It's just math and probability". I think the probability will outweight the math.

So.. like I said, I'm betting on myself because I'm careful and I take extra measures to protect my car from you people with low deductables.

I might get burned in the short term, but I'm sure to come out ahead in the long run based on my 17 year driving history and my 4 mile back-road commute.

I'd rather keep my 2k in the bank just in case I need it, as opposed to giving an extra $1,000 annually to an insurance company just in case I need it. Since I'm capable of absorbing a 2k hit on short notice, this is a good bet.

This is the most important statement in the thread

If you financed your Z then the bank is going to contact your insurance company to change the deductible.

I would rather be safe than sorry, $2k is too high of a deductable for me to be comfortable with.

Lucky for us California people we have the option of buying insurance from Wawanesa so my insurance is less than yours and my deductible is only $500

When I was shopping for insurance on the Z I found prices varying between companies from $600 - $2100. This is with the same coverage package at each company. Yes your deductable will vary the price but I've found the biggest variable so far is the company themselves. It's pretty clear that the company that quoted me $2100 didn't want my buisness. Best thing to do is to shop around. I personally believe if you aren't switching car insurance companies every two years, you are paying too much.

Jealous. Here in Massachusetts, the government is involved in "regulating" insurance cost.. but let's not turn it into a discussion about how helpful goverment intervention isn't. Moving to California in order to get Wawanesa insurance company wasn't really an option for me. Over-all tax burden, job market, and hippies trump auto insurance.

As for the $1,000 limit.. I have a credit union and they rock, but your mileage may vary.

I don't see why this is so controversial. Do the math and look at your driving history. It's not every day that I get to make a $1,000 bet on an outcome that I have control over. My odds are 6:1 but that's only because I factored in my teenage years. This is just more incentive to drive safe.

I'm just sharing my numbers because a lot of people here are concerned about high costs for the Z insurance.

This is the key part and it's true for any insurance. Most of us here will pay more in insurance premiums (house, car, etc.) over the course of our lives than we get paid back in claims.

So the higher the deductible you can go the better off you will be in the long run as long as you can absorb the loss in the short term.

I thought that was impressive, so I googled the ins co. They ask a lot of questions about your driving history and usage on the first few pages of the application. They are making the same assesment as I am, and betting on you being a good driver who cares about your car.

I'm picking up my Z in Florida, and driving it back to Massachusetts. I shouldn't be jinxing myself like this.

wow, that's a high deductible. you realize if you are at fault, your deductible will probably cover a big chunk if not most of the repair. $500 is standard.

You right, all insurance companies make assesment on the drivers and the cars that they drive. So is not only you, take for example that I had a 2001 Integra, no accidents just a windshiled replacement however my premium kept increasing every year when it should be decreasing.

So one day I called the insurance company, clean record however that car was the #1 stolen car in the nation for like 5 yrs in a row. The reason my premium was so high for that type of car.

Now we all can be good drivers and care about our cars but you never know what idiot driver is coming or going that might cause and accident, and you be involved in it. Worst case scenario, hit and run. Who pays the deductible? You!

Myself would not be betting on luck because $hit happens!;)

ok, I'm all alone on this one.

With risk comes reward, history shows me the risk is low and the numbers show the reward is not only high, but pays back annually.

Personal accountability and financial responsibility are out of style, but if I save the money that I'm not giving to the ins co for about 15 months, it will offset the deductable 100% then and I put 1k in my pocket annually. (After I reserrect this thread to say "I told you so" ) ;)

I work in a bodyshop. I see many customers mulltiple times a year. Yes your monthly payment is alot less, but that's still quite a risk. You may have it in the shop 2-3 times in one year. Now your out $6,000. Last year I had one guy hit 4 deer, and 2 snow banks in 7 months. I can't tell you how many people I see with high deductables who either have to card it, or just can't afford it. Be aware that things happen, and they can happen often. High deductables I think only apply to those who own shops, can do the work themselves, or can obtain deals from contacts. Also I have many people come in well into there 40's and 50's say this was thier first accident. I also see some of them more than once. To each thier own. Just a friendly warning. This can easily bite you in the end. I'd shop around for another carrier. Always remember S**t runs down hill.

Here are my observations.

1. Auto insurance companies typically target loss ratios of 60% to 70%. That means that for every dollar you spend on auto insurance only 60 to 70 cents are paying for expected losses. Thus, you are better off with higher deductibles. As the difference in price is not just your expected losses, but your expected losses plus company expenses and profit.

For home insurance, the loss ratios are even lower, 40% to 50%.

I apologize if I sound like a jerk-face. But if you can't afford to hold a few grand in cash you probably can't really afford a 30 to 40 thousand dollar sports car. And to satisfy my lender, I kept more than my deductible in an account with them. That way they knew I could pay my deductibles. Your lender should understand the idea of collateral.

2. Take your savings in deductibles and get higher BI limits. You should have nothing less than 100/300 or preferably 500/500. If you have left over cash, get a personal umbrella policy or excess liability policy. Even if you don't have the assets to pay for a large liability claim the courts can still garnish your future wages. Get high limits!

3. Massachusetts is the worst auto insurance market the in country. The state pretty much tells companies what to charge. As a result, you can't get insurance from most of the big companies (Allstate, State Farm, etc.). You can only purchase from small companies that operate only in Massachusetts because it is such a niche market. Savings like that aren't going to be seen in many other locations.

California, is not much better. Write your local government representatives and demand that they reduce rate regulation. It will increase competition and drive down prices!

4. Shop around! Insurance rates are like a piece of paper floating in space. Your rate can vary by where you land on the paper, the shape of the paper, and the height of the paper. Each company has a different paper and the papers vary by state. Heck, the paper even varies within state and company as some companies may close a book of business and only renew the current insureds. Then they make a new paper for new business. The most profitable customers for an insurance company are the ones that just stay with them the longest.

5. The 370Z is pure sex! It is hot, loud, and rough!

I'm with you. I have 5 vehicles I insure in MA right now, I think I'm going to try this, it will probably pay for itself in the first year.

This has changed a little bit over the last 2 years. Insurance companies now have the option to change their "rate" once a year at the beginning of each year by submitting a adjustment to the state review board. Previously the insurance companies made a request to change the rate (always up of course) and then the state would set the global rate that all companies would use. At least there is some competition now. Insurance companies are also now a little more free to offer additional discounts for things like driver training, student honor role etc. Most insurance in the state is still operated by "agents" but they are just the middleman for the insurance company.

Apparently I'm not very smart. Why do so many people think this high deductible is such a bad idea?

I assume most people dont have accidents every 1.4 years (or whatever your math was) and wouldnt in theory their rates increased based on the amount the insurance payed out?

I guess if this is your daily driver, the risk is higher...

edit: I just ran a higher deductible for my policy from $1k to $2.5k deduct on coll and comp, and I will save a whoooooping $68/year.... Doh. Not as lucky as you Baconboy

You better have that $2k ready. You can have all the confidence in the world. There are some types of accidents you just can't avoid. And the Z has enormous blind spots so there's an increased chance of inevitability with accidents. Safe and extremely excellent drivers have accidents too. I had my first one after 21 years of driving, no accidents 2 speeding tickets and 1 parking ticket. When I had my first accident I was going under 10mph. The truck that hit me was doing about 60mph in a 35mph zone and barreled from a steep hill where she couldn't see above and I couldn't see below. And she was texting. So she never even tried to break. When I stopped I was on the yellow. I hadn't intruded in her lane yet. And if I did? It could've not been more than 2 or 3 inches in. Enough to have avoided the accident if she wasn't speeding and texting. I guess she figured since the block is usually dead its ok to speed there. Well she was wrong. Texting was the icing on that cake.

^^ deductible only matters if it is your fault. If it is the other guy's fault, then their insurance pays and their insurance pays the whole amount not the amount - your deductible.

In any case, you can't argue with math. As another poster calculated, he only has to go 1.4 years without a claim against his insurance company.

Look at it this way. If you pay $1000 more a year to have a $500 vs $2k deductible, then you are betting $1000 every year that between now and when your next premium is due that you will have an at fault accident and hence you will save $500.

Would you bet $1000 to win your stake back + $500 on the flip of a coin? The chances are way less than even that you'll make a claim.

Low deductibles are only a good idea if you can't afford to cover the cost of a high deductible. If you can afford to lose 2k, then you will more than make up for it in the long run by having high deductible/lower cost insurance.

so does everyone here run a $0 or $100 deductible? I'm guessing not, so at some point a tradeoff was made. Sounds like $1021 a year is worth the $1500 increase in deductible. Sure if you dont have an extra $1500 and drive a Z, you've got other problems.

So I ran my numbers again. If I go to a $50 deductible from $1000 I pay $636 more a year. Would you guys recommend I switch to a $50 deductible?

^^^ I'm definitely on your and the OP's side of the risk/payoff tradeoff

I wish I could have the savings the OP stated by going to a 2K deductible. I'd do it in a flash. Mine is at 1k and I think I save around $400 a year over a $500 deductible.

Even though I live in Western MA, my insurance company is based in Lowell. I pay a super cheap rate with only $500 deductible. My agent is also really really nice and always helps me out over the phone and mails me forms already filled out, etc. etc. PM me if you want the name.

I don't know what companies some of you guys have, but I'm guesing some of them are those $hitty ones. I'm guessing the ones that takes for ever to get your claim thru them if you get hit by one of their clients.

Been there trying to get my old lady car fix with those insurance companies. Low premium, high deductible = company doesn't have the money to pay a claim on time. Have to go thru hell and high water! :shakes head:

what insurance companies do you recommend checking out?

The ones that are established companies for years like USAA, GIECO, All State, State Farm, etc.

Cheap is not always better.

Agreed that cheap is not always better. Personally, I know I'm paying a little more for insurance for higher coverage, but like others have mentioned before, it depends on your assets. I have an umbrella policy that also is tied to my homeowner's insurance. I would hate to lose my house because of a car accident.

That may be true, but that's a different discussion. The OP said he was saving 1k a year by going to a 2k deductible with the same company not by switching to a different company and in any case Met Life is a more or less respectable insurance provider I'm guessing.

Obviously, if one says they are saving 1k by going to a 2k deductible with company A over a $500 deductible with company B, that doesn't give us enough information to know if it is a good bet -- the two companies may be very different with respect customer service, timeliness of claims, etc.

So the question is -- given you are comfortable with the service provided by your insurance company -- how much would you need to save in premiums a year to move to a higher deductible.

I'm pretty sure every insurance company offers different deductible levels, and the higher the deductible the lower the premiums. I personally know USAA Geico and Allstate all do.

I got some really good rates from esurance

Esurance is crap! good luck getting your car fixed if you have a wreck!

OP....

If i were you, i would run to the nearest piece of wood and knock!

Are you saying Met Life has a bad reputation for paying claims or that the fact that he has a 2k deductible with them makes it less likely they will pay promptly than if he had a $500 deductible?

All other things being equal, I would think that having a higher deductible would make them pay faster -- they have less to pay ...

I been using esurance for years. Great prices and I have had two claims that were handled just fine.

P.S. The Astros are crap, good luck winning a world series :roflpuke2:

i was just saying that he might be jinxing himself and to go knock on some wood. I recently switched my deductible from $500 to $1000 and had to make a claim 2 months later... before that i hadnt made a claim in 10 years.

I got rearended by someone that had esurance and it was HELL getting my car fixed right and on time!

the Astros are complete CRAP this year and for many more to come... I'm not fairweather. :tup:

Never had a problem with esurance on a claim. Having a good body shop of my choice deal with the insurance adjuster has been the key to success for me with any claim. A so-so body shop that won't argue with the adjuster to get things repaired right is one to be avoided. I never use the body shop suggested by the adjuster.