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After budgeting for car payments, gas, maintenance fees and other monthly expenses, the cost of car insurance can be a bit of a shock. To help you cut insurance costs, you could find an insurer that pays car insurance dividends, which are payments for being a policyholder.
A dividend insurance policy is one that pays you an extra check when a mutual insurance company makes a profit. With this type of policy, you’re a shareholder in the company, and your premiums pay for your share of the company. Dividend policies may cost more than traditional insurance. While you’re not guaranteed a dividend payout, you could see an extra 2% to 3% of your share or more when the company profits.
Mutual car insurance companies differ from standard insurance companies because they’re owned entirely by shareholders as opposed to stockholders. At the end of every fiscal year, the company releases its earnings. Then it sends you a check for your share.
Discover coverage that’s broader than competitors, valuable discounts up to 30% off and perks like shrinking deductibles that reward no claims.
You might receive between $50 and $100 in a profitable year. It’s hard to say exactly how much you’ll get paid in dividends, since payments can vary depending on a number of factors.
The easiest way to find which companies offer dividends is to look for companies that are considered mutual insurance companies. Here are just a few:
While there aren’t necessarily any risks with dividends, there are a few things to watch out for:
If you can find a car insurance company that offers dividends, you could offset a portion of your expensive car premiums.
Not all companies offer them and the actual payouts can vary, so it’s important not to choose coverage based on dividends alone. Whether you decide on a mutual company or not, compare your options to find a company and policy that meet your needs.
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