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Unless you’ve been living under a rock for the past few years, I’m sure you’ve heard the little gecko mention his catchphrase hundreds of times. Have you ever wondered if this could be true? Probably all kinds of questions go through your head. How could you really save 15% on your car insurance? Are you really paying much more than you should? Well, here’s the real answer… YES and NO. To understand why there are two answers, you must first understand the basics of insurance rating/pricing.

Every person who owns a car is required to have car insurance and each person’s scenario is a little different, leading to different rates for each person with each different insurance company. It’s hard to compare your policy to someone else’s because of all the factors that go into rating individual policies. Insurance companies generate rates for liability insurance using a certain set of factors and generate rates for vehicle physical damage insurance using a different set of factors. What is said below is a very quick overview of the rating.

Auto insurance liability rates are typically based on the following: driver’s age, marital status, driving history/experience, distance driven, garage address location, and credit history. There are others and credits available, but in a nutshell these work. Although the above factors help determine vehicle physical damage rates, physical damage coverage is weighted more heavily on the vehicle details than the above. Some vehicle factors that affect the physical damage rating include: the year, make, model of the vehicle, vehicle features such as air bags, anti-lock brakes, alarm systems, daytime running lights, and cost of the vehicle.

Here are two examples of qualifying for an individual quote insurance and making savings or not.

First example; Let’s say an insured is 20 years old, has been licensed for 2 years and is driving a 2003 Chevrolet Impala and is paying approximately $1,800 a year for liability coverage only. The insured decides to try to save 15% in 15 minutes, which would mean a savings of $225. When the insured obtains quotes, some of the qualifying information that the previous policy was based on has actually changed. He/she now has a 3 year license vs. 2 and is now 21 years old vs. 20. The insured may not even realize that the old policy was based on these old factors. Based on these new factors, there are great discounts that the insured is eligible for and save more than 15%. However, you are comparing apples and oranges. Because the reference information has changed and the premium is higher to begin with, it is easier to achieve this high percentage of savings. In this scenario, the answer is probably YES, you can save 15% or more.

Second example; Take, for example, a married couple in their 40s, with two cars, a 2009 Chevy Impala and a 2007 Chevrolet Silverado, with no children of driving age. The insured is currently insured with a preferred auto company that pays a premium of $945 per year with full coverage. This is a very competitive price with adequate coverage limits. When the insured checks prices with other companies, the qualifying information has not changed and it is difficult for them to adjust their current price. They are unlikely to be able to save anything and definitely not 15% or $146 with no changes to their policy. In this scenario, the answer is probably; NO, you cannot save 15% or more. Maybe there will be a savings, but most likely not 15%. Now don’t sacrifice coverage to save money because now you’re back to comparing apples and oranges.

Each individual’s situation is completely different and the facts will determine the savings. One thing to remember when getting quotes… try to quote apples-to-apples coverage, as well as keep the same rating information for each quote. It doesn’t do you any good to quote a new policy with different information or lower your coverage to try to save money. The policy will certainly be a cheaper price but also a “cheaper” policy.

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