Just quit my job at a massive auto insurance company. Here’s what I wish EVERYONE knew about car insurance.

I was a supervisor at one of the largest insurance companies in the US for over a year, and I had the pleasure of talking to many different people. It became apparent very early on that most people don’t know anything about car insurance. Here are some of the things every single one of you should know.

Just a disclaimer, this info may vary depending on the insurance company you go to. Most of these things are pretty universal, though.

1. Shop around every year or two. Insurance rates change pretty frequently, especially as cars get more and more expensive to fix. Rate increases aren’t personal, they’re just a part of the industry. Spend an hour every year completing quotes online to see if you can get a better deal elsewhere. Do these quotes through the company websites directly, though, not an aggregator website, as those tend to not be the most accurate.
2. Don’t let your insurance run out EVER. Having a lapse in insurance is one of the worst things you can do. You risk fines, your license could be suspended, and it’s incredibly expensive to get insurance when you’re in a lapse. Go down to the bare minimums for your state if you have to, but don’t let it run out. Get on autopay (don’t be dumb and pay it manually monthly), and make sure your card is updated.
3. Pay in full. Most insurance companies give you a sizeable discount for paying your policy in full. If you have the money available, this is a no-brainer.
4. Don’t hide activity from insurers. Daily I would have customers call in for quotes and not disclose an accident, ticket, or suspension that they had in the past, thinking insurers don’t check. They do. And when they find that activity, they’ll either jack up your rate (to where it was supposed to be) or cancel your policy altogether. Be honest and get your accurate price up front. Don’t waste everyone’s time.
5. Your car is a very small portion of your premium calculation. You may have a 2004 Camry, but you also drive 15,000 miles per year, live in Miami, and have had 2 accident in the last 5 years. Your rate’s gonna be high. In many states and for many companies, your credit is also considered, and it’s a pretty massive factor (it’s very helpful in seeing how well you are at paying bills on time).
6. Embrace telematics if you’re ok with data collection. Many insurance companies now have apps or devices that track your driving and adjust your rate accurately (Snapshot, DriveEasy, etc.). If you drive like a bat out of hell, obviously don’t opt for this. But if you’re a good driver, you’re likely getting a discount just for signing up, and that discount can go even higher at your next renewal. Honestly, your mileage may vary depending on the company. My old company’s was good, but others are pretty crap and have a very high chance of raising your rates. Do your research.
7. Discounts are mostly BS. I blame this on insurance commercials that talk about discounts like they’re going out of style. In fact, I recently had a deaf guy (using an interpreter) ask if we had a deaf discount. No, we don’t. We DO have discounts for stuff like ABS, safe driver (years without any activity), anti-theft devices, defensive driver course (for older drivers), good students, multiple vehicles, and alumni associations and professional organizations. Sales agents have no influence over your rates for a particular coverage. Rates are filed with the state, so don’t try to negotiate them.
8. Multiline discounts are a no-brainer. Most insurance companies are smart and put a ton of energy into making sure you get ALL your insurance policies with them. There is a VERY good chance that bundling auto, renter’s, home, umbrella, or any other policies will save you a ton of money. This is ESPECIALLY true for renter’s, which is extremely cheap to begin with and provides great coverage. Many times I’ve seen the multiline discount pay for the entire renter’s policy and then some! Not sure how that works, but the customers weren’t complaining.
9. Young drivers should get their own policy ASAP. If you’re extremely strapped for cash, definitely keep younger drivers on the main policy for as long as possible. However, if you can, start a new policy at a young age. It may be more now, but it helps to build up good insurance history which works to lower rates, and it also separates liability so an accident/ticket for the young driver won’t affect EVERYONE on the policy, or vice-versa.
10. Don’t just go for the minimums unless absolutely necessary. Insurance is a legal requirement, but it’s also there to protect you. I can’t tell you how many customers turned down Bodily Injury Liability or Uninsured Motorist because “I don’t plan on getting in an accident”… Yeah nobody does lol. I’m not saying you have to go all out on coverage, but quote out some limits that are higher than the legal state minimums. You may be surprised how affordable they are, and future you won’t regret it. Seriously, it breaks my heart how many people carried crap coverage and we couldn’t do anything for them when they got in a wreck. Protect yourself and your family, please.
11. If you cancel a policy, you’re entitled to a refund for any unused premium you already paid for. By law, insurance companies can’t keep money for coverage that you aren’t using. So, whether you’re getting rid of your vehicle or getting a cheaper policy with another company, don’t let your policy run its course, call in and cancel for that refund! If you’re switching insurers for a cheaper price in the middle of your policy’s life, cancelling and switching ASAP is a great way to get a good chunk of money back in your pocket.

That’s all I can think of right now. Let me know if you have any questions or want me to elaborate on anything! If you know how insurance works, you can save a very healthy chunk of change every year.