This podcast episode of Joe Knows Better, Joe and Michelle share a conversation with insurance expert Nathan Mason. The discussion focuses on the rising costs of auto and home insurance, particularly in Arizona, and provides practical advice for consumers to save money.
Mason explains that the primary drivers of increased auto insurance premiums are inflation and the high cost of repairing modern vehicles. He notes that features like advanced sensors and calibration requirements for windshields make repairs significantly more expensive than in the past. For homeowners, he cites Arizona's unique combination of wind, hail, and water damage, as well as an area's fire risk, as reasons for the state's high rates.
A central theme of the episode is that consumers should be proactive and strategic to manage their insurance costs. A key strategy is increasing deductibles, as taking on more responsibility for minor repairs can lead to lower premiums. The hosts and guest also discuss the importance of being aware of all the factors that impact rates, including the number of claims filed, not just their cost.
Key takeaways
- Raise your deductible: A higher deductible on both auto and home insurance policies is the most effective way to lower your premiums. Assess your financial situation to determine a deductible you can comfortably afford in a savings account.
- Be strategic with claims: Even small, seemingly insignificant claims—like a windshield replacement—can cause your rates to increase or make it harder to find new insurance. It's often cheaper in the long run to pay for minor repairs out of pocket rather than filing a claim.
- Be wary of incentives: Beware of businesses that offer free incentives (like cash or gift cards) for a windshield replacement. These costs are often folded into the claim, driving up the overall cost and potentially leading to higher future premiums.
- Check discounts: Ask your agent about available discounts. For auto insurance, this could include good student discounts for young drivers or telematics programs that monitor your driving habits.
- Bundle policies: Most of the time, bundling your auto and home insurance policies with the same company can save you money. However, an independent agent can help you determine if different companies offer better rates based on your specific record.
- Do your homework when buying a home: The age of a home, especially the roof, and its location's fire line score (which measures the area's ability to handle a large-scale fire) significantly impact home insurance costs. Newer homes with updated roofs generally have lower rates.
