Car Insurance - Milestone at Age 25
I’m reaching what is commonly considered the biggest milestone in a driver’s life, turning twenty five years ago. Aging from 24 years 11 months and thirty days to 25 years will probably save you the most amount of money with the least amount of effort in your entire life (getting married helps, but that’ll win you the award for least amount of money with the most amount of effort :)) because it moves you from a most risky class to a less risky class of driver. I’ll be turning twenty five in August (and I’ll be moving) so I wanted to get a benchmark of auto insurance quotes prior to turning twenty five and then comparing them later on. I currently am insured by Geico but I’ll be using Progressive’s quote system for my research.
Current Insurer: GEICO
Vehicle: 2003 Toyota Celica
Premium per 6 Months: $436.60
Coverage:
| BODILY INJURY LIABILITY | $100,000/$300,000 |
| PROPERTY DAMAGE LIABILITY | $100,000 |
| PERSONAL INJURY PROTECTION | $2,500 |
| UNINSURED MOTORIST BODILY INJURY | $20,000/$40,000 |
| UNINSURED MOTORIST PROPERTY DAMAGE | $100,000 |
| COMPREHENSIVE | Not currently carried |
| COLLISION | Not currently carried |
| EMERGENCY ROAD SERVICE | Not currently carried |
| RENTAL REIMBURSEMENT | Not currently carried |
You may notice I carry zero comprehensive and collision insurance (yes, risky) but if I carried $1000 deductibles on both coverage’s, my 6 month premium would be $959.50 (more than double!). I have every possible insurance discount available from Geico (5 Year Good Driver, affiliate organization discount, safety restraint discount, etc). I also have homeowner’s insurance with Geico (Traveler’s really) but there is no discount on my auto insurance policy because of it, only my homeowner’s discount.
What was Progressive’s result for the exact same coverage? $448. If you were to add the $1000 deductible comprehensive and collision insurance? $737.00. So it would be cheaper to go with Progressive if I wanted to tack on the extra coverage’s but I don’t really feel they are worth it. I’m currently being “paid” $1,000 a year to insure myself.
Here is where the power of Progressive comes in, they will show you the rates of their competitors. Unfortunately, the only other rate they told me about was from State Farm Mutual Automobile Company and that was $1,162. Unfortunately, I wish they gave me more information than that… no mention of AllState or Nationwide quotes.
Right now I’m sticking with Geico, check back in a month to see how the rates compare with current rates.
Update 7/11/05: When I was logging into the American Express website I saw that they were offering auto insurance so I submitted some information to them to see what they would quote me. For equal coverage to my current coverage (no collision/comprehensive) would be $445 and for “full” coverage, it would cost $844. It stands to reason that there is a lot of wiggle room with regard to comprehensive and collision coverage cost, but not much with the base coverages. Any thoughts?
Click here for the results of my insurance inquiries after I turned 25 years old.
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There are 12 comments, add your thoughts now!
Actually, it only sounds like you’re being paid $600/year to self-insure (Progressive’s better coverage is ‘only’ $300 more). Then again, you’d still be out the $1,000 deductible before it would kick in. By the way, we’ve actually had great luck with State Farm. Great discounts for long-term customers, accident (i.e., claim) free, having multiple policies - including house, personal articles (i.e. jewelry), and umbrella coverage. I’ve shopped around in the past and haven’t been able to come close to beating them, and I like having a local agent. Then again, we’ve had coverage with them forever, and are well past the 25 year magic number. But now that you have a house, you might start checking out the possibility of consolidating all of your coverages to get the best deals.
fivecentnickel.com
Yeah it is only $600, but until I learned of the other quotes my mental thinking was $1000 so I stuck with it.
Right now both homeowner’s and auto are through Geico and any insurance I would get would be through a single provider, so I’ll have to look into it more when I’m more serious about it.
One thing I have heard is that Geico is a pain whenever you need to get paid. I haven’t had any firsthand experience but that’s what “everyone” says. It won’t change my opinion of them but it’s something to consider.
I have had geico since I was 16 years old. I have every discount imaginable with them as well. But I do have the deductibles. 1000 comp and 500 collision. Right now that costs me 853 for 6 months. I never thought of carrying no coverage on any of that. Every accident I have ever had was someone else hitting me so I never really paid out a deductible. Though I always got paid quickly. Also, look into the glass coverage. I think it was like 5 bucks more a month…and there is no deductible when you get your glass fixed.
If your car is a heap, then no comprehensive or collision is understandable. But if your car is decent, I would reconsider.
Another things to consider is roadside coverage… This really pertains to your AAA post as well as to this one. We have roadside coverage through State Farm and it only costs something like $2/six months. They cover breakdowns, flat tires, etc. and they even have a number for you to call and they’ll dispatch a local service provider to your location. I’ve used it a few times and had no problems. You really can’t beat the price. Not sure if other insurers offer this, or what they charge.
fivecentnickel.com
The only reason I can see to get that extra coverage is if you’ve financed your car. (Not only is it reasonable in that case, it’s a nonnegotiable condition of every car loan I’ve ever heard of…banks demand assurance that they’ll be repaid no matter what, and don’t especially care that it’ll cost you a heap of extra money to give it to them.) Not only does it add fairly significantly to the cost of the insurance today, but your future rates will go up significantly if you ever file a claim…even if the accident is undisputedly not your fault.
Congrats on (almost) turning 25, by the way. I remember when I was paying through the nose for car insurance at 17, thinking 25 was an infinite distance away.
geico is not a pain when you need get paid. it’s very decent from my experience. It picks up the tag for a problem resulted from the collision but found almost half a year later. Did I say it’s an expensive problem? close to 6k
[...] While we are on the topic of cars, Jim at Blueprint for Financial Prosperity recently turned 25 (Happy Birthday, Jim) and as a result he went car insurance shopping to see if he could get his rates reduced because of his new, more mature age. You can read about his experience in his post Car Insurance - Milestone at Age 25. [...]
So what was the reduction @ 25 if you stayed with Geico?
Justin,
Here is the post on my premium decrease, it was about 13%.
[...] One of the cornerstones of a solid personal financial plan is setting up an adequate emergency fund and the general advice out there is to contribute as little as 3 months and as much as a year’s worth of monthly expenses. My own personal opinion is that 3 months is probably an adequate amount for an emergency fund for me but then again, I’m willing to accept financial risk (I don’t carry collision or comprehensive coverage as part of my automobile coverage) as long as the savings are high enough. [...]
I just turned 25 and have Geico but received no discount!!! I called and the guy said there was an increase in NY state rates, so it outweighed my age discount! I find this hard to believe and was very dissapointed. Anyone else have this problem or ever hear of that??
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