Maximizing Auto Insurance Claims: What Can Be Billed?

Auto insurance is a necessary expense for car owners, but it can be challenging to understand what is covered by your policy and how to keep costs down. In this guide, we will explore the different types of auto insurance coverages, ways to reduce your premiums, and how to make informed choices when purchasing a policy. We will also discuss the factors that influence the cost of auto insurance and provide tips for saving money on your bill. Whether you are a new driver or looking to switch insurance providers, understanding what you can bill to auto insurance companies is essential for making the most of your coverage.

Discounts for good students, federal employees, or safe drivers

Students, federal employees, and safe drivers can all benefit from discounts on their auto insurance.

Good Student Discounts

Full-time students under the age of 23 who can maintain a B average or better can benefit from good student discounts. In most states, the average discount is 10%, but some companies offer up to 25% off. To qualify, students may need to submit proof of their grades to the auto insurer, usually in the form of a report card or transcript.

Federal Employee Discounts

Federal employees can take advantage of auto insurance discounts from providers like Alfa, GEICO, and Mercury. GEICO, for example, offers a 12% discount for federal employees, while Alfa offers an affinity discount for state or federal employees in Alabama and Mississippi. Mercury's occupational discount is available to government employees or their spouses.

Safe Driver Discounts

Safe drivers can benefit from lower insurance rates by maintaining an accident-free driving record or taking steps to become a better driver. Some companies offer safe driver discounts for those who use telematics apps that monitor and reward safe driving habits. Additionally, taking a defensive driving course can also lead to insurance discounts.

Combining property insurance with auto insurance

Benefits of Combining Property and Auto Insurance

Combining your property and auto insurance can offer several benefits:

• Discounts on premiums: Insurance bundles can qualify you for discounts on your premiums, making it an easy way to save money. The more policies you bundle, the more you can save.
• Streamlined management: Instead of juggling multiple insurance carriers, apps, and payment due dates, you’ll have just one provider to deal with. This streamlines your premium payments and policy management.
• Improved customer retention: Insurance companies like it when you bundle policies with them as it boosts their bottom line and makes it more likely that you’ll stay with the company in the long term.
• Reduced likelihood of being dropped: Sticking with one insurance provider may also mean you’re less likely to be dropped as a customer when you need to file claims against your policy.
• Convenience when filing claims: If a covered loss affects both your property and auto policies, bundling them means you may be able to pay just one deductible.

Tips for Combining Property and Auto Insurance

• Get quotes: Use the estimation tools available on insurance company websites to get quick cost estimates. For more personalized service, consider getting a quote from an agent over the phone.
• Shop around: Don’t just settle for the first company that offers a bundling discount. Get quotes from several insurers to compare rates and find the best deal.
• Compare coverage: Price shouldn't be your only concern. Make sure the insurance bundle you choose contains the coverage you need, including any policy add-ons.
• Choose quality: Select a company (and an agent) you’re comfortable with, with a solid reputation for quality and service, and offering the coverage you require.

Savings from Combining Property and Auto Insurance

Combining your property and auto insurance can potentially save you hundreds of dollars per year compared to buying separate policies. The amount you save will depend on various factors, including the number of policies you bundle, your location, credit rating, and claim history.

Insurance companies advertise bundling discounts ranging from 5% to 30%. For example, Allstate offers savings of up to 25% when you bundle home and auto insurance, while Amica offers discounts of up to 20% when you combine homeowners insurance with auto insurance.

Keep in mind that bundling insurance doesn't always result in savings. In some cases, a company specializing in only one type of coverage may offer lower rates than companies offering bundles. Additionally, separate policies may include benefits unavailable with a bundled policy, like a diminishing deductible or accident forgiveness. Therefore, it's essential to compare rates and coverage details before deciding whether to combine your property and auto insurance.

Increasing your deductible

There are several factors to consider when deciding whether to increase your deductible:

• Financial situation: Can you afford to pay a large deductible if needed? If you have sufficient savings, a higher deductible may be a good option. Otherwise, a lower deductible may be preferable to avoid financial strain.
• Location: If you live in an area with high traffic volume and a higher accident rate, a lower deductible could be more beneficial.
• Frequency of accidents or claims: If you are involved in frequent accidents or submit a high number of claims, a lower deductible is usually recommended. This reduces the financial burden of paying a large sum each time you make a claim.
• Risk aversion: A higher deductible means taking on more risk. If you prefer more coverage and security, a lower deductible is a safer option.
• Value of your vehicle: Expensive vehicles often cost more to insure, and a high deductible can lead to significant savings on premiums. However, with less valuable cars, the cost of repairs may not justify a high deductible.
• Leasing or financing: If you are leasing or financing your car, a lower deductible is generally chosen to provide better coverage in the event of a claim.
• Mix and match deductibles: For comprehensive and collision coverage, you may be able to mix and match deductibles. A high deductible for collision coverage and a low deductible for comprehensive coverage can be a strategic choice, especially if you have a good driving record.

It's important to carefully consider your circumstances and weigh the potential savings on premiums against the increased financial risk of a higher deductible. Remember, the decision to increase your deductible should be made based on your financial situation, risk tolerance, and the likelihood of needing to file a claim.

Dropping collision and comprehensive coverage on older cars

As your car gets older and its value decreases, you may want to consider dropping these optional coverages. This is especially true if your car is paid off and you no longer have a lender requiring you to carry this insurance. If your car is worth only a few thousand dollars, the cost of insurance may not be worth it, especially if you have a high deductible. For example, if your car is worth $2,000 and your deductible is $1,000, the insurance company will only pay out a maximum of $1,000 on a collision claim, which may not be much less than your annual premiums.

Additionally, if you have enough savings to cover potential repairs or the cost of a new car, you may decide that paying for collision and comprehensive insurance is unnecessary. In this case, you could save money by only carrying liability insurance, which is required in most states.

However, it's important to consider whether you can afford to pay for unexpected repairs or a new car if your vehicle is damaged or totaled. Collision and comprehensive coverage can provide peace of mind and protect you from financial hardship in the event of an accident or other damage to your car.

When deciding whether to drop collision and comprehensive coverage on an older car, carefully weigh the potential savings against the risk of having to pay for costly repairs or a new car out of pocket.

Bundling auto insurance with other policies or services

Bundling auto insurance with other policies can be a great way to save money and simplify your insurance management. Many insurance companies offer bundling, also known as multi-policy or multiple-line discounts, to incentivize customers to purchase multiple types of insurance policies from them. This means that you can often get a discount on your auto insurance premium if you also purchase home, condo, renters, RV, boat, or life insurance from the same provider.

There are several benefits to bundling your auto insurance with other policies:

• Discounts on Premiums: One of the main advantages of bundling is the potential for significant discounts on your insurance premiums. The amount of the discount varies by company, but it is typically one of the largest offered by insurance providers. For example, Allstate offers a bundling discount of up to 25%, while Farmers Insurance offers an average discount of 20%. These discounts can result in substantial savings on both your auto and home insurance policies.
• Streamlined Record-Keeping and Bill Payments: By bundling your insurance policies, you only have to deal with one insurance provider, which simplifies your record-keeping and bill payments. You may also be able to manage all your insurance products through a single online account or mobile app, and you'll only receive one bill for all your policies each billing cycle.
• Convenience of a Single Provider: Instead of juggling multiple insurance carriers, you'll only have one point of contact for all your insurance needs. This can make it easier to manage your policies, make changes, or file claims. It also means you'll only have to deal with one company if you have a covered loss that affects multiple policies. For example, if a tree falls and damages both your home and vehicle, you may only have to pay one deductible if you have a bundled policy.
• Loyalty and Longevity: Insurance companies like it when you bundle policies with them because it boosts their bottom line and increases the likelihood that you'll remain a long-term customer. Sticking with one insurance provider may also make it less likely that you'll be dropped as a customer if you need to file multiple claims.

However, there are also some potential disadvantages to consider before bundling your auto insurance with other policies:

• Limited Coverage and Discount Options: It may be challenging to find a single carrier that offers all the endorsements and specialized discounts you're looking for across multiple policy types.
• Products Sold by Third Parties: In some cases, a bundled policy may involve purchasing insurance from a partner company, which means you won't be able to manage all your policies in one place.
• Might Not Result in the Lowest Rates: Just because a company offers a bundling discount doesn't guarantee that you're getting the best rates available. It's important to compare quotes from multiple providers and consider both bundled and unbundled options to find the most cost-effective solution for your needs.
• Availability and Eligibility: Not all insurance companies offer bundling, and even if they do, you may not be eligible for a bundling discount depending on your location, credit score, claim history, and other factors.

In conclusion, bundling auto insurance with other policies can be a smart financial decision, but it's important to do your research and compare quotes from multiple providers to ensure you're getting the best value for your needs.

Frequently asked questions