do you ever do a check up of your automotive insurance policy to see if you need to make any changes? to change coverage? to lower your payments?

every now and then, i think it’s a good idea to reevaluate one’s automotive insurance policy. maybe there are features on there that you no longer need. maybe you need to update the annual mileage information. or maybe, you no longer need all the parts of the coverage that you last signed up for, and can cut them out in order to save money.

in my case, coverage would be for my motorcycle; i do not own a car. i have been motorcycle-dependent (car-free) for at least 4 years now. even though i am using my moto insurance as my model however, many of the components/purpose of the policy package are the same.

shopping around?

one could shop around with other auto insurance companies by getting quotes online, making some phone calls, talking with friends. i myself checked in with geico, nationwide, 21st centry to find out how i would fare there. amusingly, they could not quote me lower than double my current insurance cost! my policy with progressive has been for several years now, and includes various types of discounts.

working with what i have.

i have reviewed my progressive policy 3-4 times this year. mostly for other reasons than evaluating the coverage details themselves:

• address change
• name change
• updating the annual mileage information

when i moved and my daily commute increased from 6 miles to 50 miles a day, my annual mileage increased from about 2000 to 10-15k such that my annual insurance premium went up as well. in the last reevaluation, my insurance went up about $200 a year.

i paid the $501 in one payment, not wishing to pay the extra fees from paying in installments (saving about $20).

i want to see if i can’t bring the cost down, thereby receiving a refund for the difference that i can apply elsewhere — towards my debt for instance. $501 i know isn’t bad at all, but if i can save more money, the better, no?

this is what i currently have:

let’s go over the various components individually, and learn what they mean.

comprehensive

ok, so this covers expenses incurred from damages from vandalism, flood, theft, and fire. i signed up for a $100 deductible (paying $144 a year). this means that i must pay $100 first, and then any other costs beyond that, insurance will pay for.

so far, i haven’t had to deal with any of the above. i take my bike to work which is parked inside a garage, and at home it’s also in a garage. the likelihood of damage from any of the above is low. occasionally, if i were to go to a store, post-office, doing errands, the bike may be prone to damages there.

although i am focusing on spending money on debt payments, in the event that the bike gets damaged, i can most likely afford more than 100 — at least $250 if not 500.

i increased my deductible to $1000. this decreased the price of coverage by a few dollars.

collision

so if my bike hits a tree, another vehicle, i get doored, etc., and the bike is damaged, i am currently paying for a $500 deductible. this means that i must come up with the first $500 for the costs of the damages, and the insurance company will pay for the rest. this also applies to say, if i am driving my SO’s truck to the grocery store.

i pay $219 a year as a result. but, could i pay for a $1000 deductible instead? can i pay for at least $1000 worth of initial costs on my own should damages require it? yes, i’d find a way.

increasing this deductible also to $1000 has decreased the price for this component by a few more dollars.

uninsured/underinsured motorist

i pay $81 for a 15/30 coverage.

this protects me if someone else is responsible for an accident and causes me bodily injury, but s/he is under or not insured. i am covered for $15,000 worth, or $30,000 at most for each accident.

this is the minimum available, and as required by california law. should i get more?

why not? if i am hit by an uninsured motorist, how will my expenses get covered? my own medical insurance will cover some of my health related fees. but what if i require much, much more? i can not afford tens of thousands out of pocket — i barely have any savings/assets while i work on paying off my debts! hospital and other fees could easily exceed $15,000!

riding a motorcycle, being in even a small accident could result in some serious health consequences. as a result, if the bike and i are hit, the probability of me sustaining physical injury is quite high. the likelihood of needing financial resources later is then high. i might as well maximize my financial coverage then. the resulting coverage increase is surely nothing compared to what i might otherwise have to pay!

being involved in an accident, there is much emotional turmoil as well as any physical injuries sustained. as a result, why not minimize any financial worries?

i’ve increased my coverage to 100/300: i am covered for up to $100,000 should i get hurt in an accident caused by another party, or $300,000 total per accident.

this increases my insurance by several dollars.

uninsured/underinsured motorist property damage

if someone under or uninsured damages my vehicle, i’m covered for $3500. i pay $4 for this. $3500 is enough for my 5 year old bike, and is the only value i can choose anyway.

bodily injury liability

if i’m responsible for an accident, i am covered for 15k per person/30k per accident for each person who sustains injury (or death). it also covers (if there is enough) me for costs in being sued.

it occurs to me, as it has in the past, that i may be barely protected at 15/30, in the case of an accident that i am responsible for. hospital costs can be expensive. what if the other person requires much medical care or other care for which my insurance will be billed for? i suspect that 15,000 per person involved may quickly be reached!

after talking with the SO, i’ve decided to increase my coverage to 100/300: 100,000 for every person injured, and up to 300,000 per accident. if my bike is vandalized/catches fire/etc., i can come up with $1000. on the other hand, if i cause an accident, i can not afford the tens of thousands that i may be responsible for should the other party require such expenses! after all, i have barely any assets while i am working on paying off my debts with the bulk of my current income!

this also increased my premium by several dollars.

why did i choose 100/300 instead of the other choices in between, such as 25/50, etc.? many other fellow motorcyclists appear to choose this coverage level, including the SO. additionally, i figured that if i want to get maximally covered, why not choose the highest i can comfortably afford? the maximum available is actually 250/500, but the premium would have increased by about $70 which is more than i am willing to pay for at this moment.

property damage liability

similar to bodily injury, but applies to damages to other party’s vehicle or property up to $10,000. also covers legal costs if i am sued.

in increasing my bodily injury liability, the 100/300 comes with a 50k property damage liability.

medical

i left my medical at ‘none’. i have decent health insurance through my work, and i believe that is sufficient for now. as long as i can remember, i have not needed to purchase additional medical insurance through a moto or auto insurance policy.

if you don’t have medical insurance outside of this option, or want to be ‘doubly’ covered, you can opt to purchase this component.

roadside assistance

i have been opting for ‘none’ for the past few years. i have had suboptimal experience with progressive towing for my motorcycle, and as such, have signed up for a separate roadside assistance program called motow through the american motorcyclist association (ama).

otherwise, if you would like this extra feature, it is definitely handy, as one towing incident can cost $50 or more out of pocket (speaking from experience). with progressive, it was only about $8 a year for me several years ago.

* * *

i started out this quest with the intention of lowering the annual premium of my current motorcycle coverage. but after careful thought and analysis, it turns out i did the opposite — i have maximized liability coverage such that my cost went up to $517 from $501. but since there are actually only 10 months left in my coverage, i am charged a $15 increase instead of $16.

the small price of $15 to pay is well worth the satisfaction of knowing that should i become involved in a serious/expensive accident whether caused by myself or an under/uninsured, i am practically maximizing my liability coverage.

quick review of ways to save money on auto insurance:

1. pay for the premium in one big payment. you not only no longer need to worry about monthly payments until the next renewal (6 months or 1 year, depending on your policy), but also don’t have to pay for the fees from paying in installments.
2. increase the deductible on your comprehensive and/or collision. evaluate your lifestyle, your income, your financial goals, the value of your vehicle, and determine if you can afford to minimize coverage on the comp/collision.
3. drive less, lower the annual mileage, move closer to work if possible.
4. garage your vehicle if possible, at home and at work.
5. shop around. get online quotes, talk with friends, make some phone calls.

other resources

bankrate’s auto insurance basics

how about you?

what is your auto insurance coverage related costs story?

have you evaluated your own policy lately to see if savings can be had?

or if you should even buy a higher level of protection?

the SO started a new job as a manager in the construction supplies industry a few weeks ago. not long after, he decided that he would like to look into buying a truck, as his company would not be providing him with a company vehicle to haul stuff around as needed.

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