Insurance. You know you need it. But can you save big bucks by getting competitive quotes? I decided I to find out for myself…
I’ve been talking about getting new quotes for insurance for about three years. Every time a premium comes due, I remind myself that it’s worth a little research to see what opportunities are out there. Alas, I didn’t really know where to start and then something else would pop up and this would get put on the back burner.
Well, I am happy to report that we finally stopped procrastinating and checked into this. The results were well worth the effort. By switching insurance providers we will be saving over $750 per year on premiums, with minimal changes in our coverage!!!!
So what finally got me off my rear and into action?
In a word: Anxiousness
I’ve been feeling very anxious about our savings rate the past few months. With purchasing the new car and paying off the loan, and booking our big Disney vacation for later this year the funds available for investing have been minimal. As a result, seeing progress towards our goal of Financial Independence has been fleeting. Additionally, I’ve been slammed at work since the beginning of the year which has been a constant reminder that I don’t want to do this forever. I needed a win, so I set my mind to thinking about savings opportunities, and getting new insurance quotes popped to the top of the list.
The rest of this post will detail how we went about obtaining quotes, our decision process, and sealing the deal.
Current Situation
I’ve been with State Farm since I first got my driver’s license… so double digit years, indeed! They’ve been good to work with and I haven’t had any major issues with past claims (thankfully, relatively few claims). I added homeowner’s insurance when I bought my first house, and then my wife added her vehicle’s coverage to the pot. When we moved a few years ago the old home policy was converted to a rental policy and the new primary residence was added… Long way of saying, we have several policies.
Getting Started
There are a ton of insurance companies out there. So the first step was doing a little research on which firms were reputable and likely to offer lower premiums. I spent about an hour googling insurance company reviews (searching for “best insurance companies” or “insurance company reviews”) as well as asking friends and family. Through this quick research, I narrowed down the list of companies to about 5. Ultimately, the best company fit for you will depend on what your needs and concerns are.
The Quoting Process
Getting the ball rolling on getting quotes was a piece of cake once I settled on a few firms. This part did take some time though. Like a couple hours. Most of the companies allow you to enter your information online. Some will spit out a quote in minutes, while others will have a human give you a call the next day to collect the info.
Information to have on hand when you start applying for quotes:
Auto
- Make/model/year/mileage of your vehicle(s)
- Current policy information, such as limits, deductibles, endorsements. Sometimes you can find this on your current insurance cards (not us) but many companies have online portals where you can log in and view your policies (State Farm does).
Home
- Address (duh!)
- Year built
- Style of construction (i.e. colonial, craftsman)*
- Type of construction (i.e. masonry, wood frame with vinyl siding)*
- Square footage*
- Is there a basement and is it finished?*
- Age of the roof
- Distance to nearest fire station and fire hydrant (use google maps for the fire station and walk down your street to pace the distance to the hydrant).
- Current policy coverage (again, find a copy of your current policy or log in to the online portal… worst case call your current agent)
*Most, if not all, this information is available through your County assessor (at least for folks in larger metro areas). In fact many of the forms automatically pull this information in and you simply confirm the pre-filled out response and makes changes where necessary.
Most of the companies did a good job showing what discounts we qualified for. A few to inquire about if you don’t see/hear them listed (besides the typical “multi-line” discount for home & auto, and accident/claim free):
- Club memberships – such as Cosco or Sam’s Club
- Loyalty discount for staying with our previous insurer for a long time
- Monitored burglar & fire alarm
- Low annual mileage**
**Another benefit of living close to work (to add to the long list of: lower fuel costs, accident risk, maintenance costs, less travel time and traffic headaches).
At first, I just requested coverage similar to our current policies to get a feel for which companies had the lowest premiums. I added the premiums, deductibles, coverage limits and endorsements into an excel spreadsheet for comparison***. This allowed me to weed out all except a couple companies. Additionally, it started to become clear that there were definitely some money saving options on the table. I then asked for quotes for a range of deductible options from the remaining companies, which brought me to the next step:
***One thing I noticed was that some companies have different deductibles for different hazards, with many including a higher deductible for wind storms. This is a particularly large consideration here in the Tornado Alley where large hail and high winds are annual occurrences.
Risk/Reward Coverage Decisions
Once I homed in on a couple companies I started compiling premium quotes for different deductibles or endorsements (i.e. earthquake, water backup, etc.). Some companies just provide this information right off the bat, but for others, where a human was involved, it was all worked out over a relatively painless phone call. Then it was decision time… should stay with what we have or could we tweak the policies to save even more?
This is one area where having little debt provides some savings opportunities. With a high savings rate and little debt, it is much easier for us to build up our emergency fund. This, in turn, allows us to accept higher deductibles which results in lower premiums. We decided to go with slightly higher deductibles. The resulting premium savings should cover the difference in deductibles within a couple years… so (fingers crossed) if there are no claims in the next couple years, we will be coming out ahead.
Additionally, since one vehicle is paid off (and the other in a matter of days) we do have the option of going with liability only.
However, we decided against the “liability only” route since the value of the vehicles is well in excess of the deductibles. But, it’s nice to know that if the going gets tough, we have that option to lower our premiums, if needed.
Sealing the Deal
Once we agreed to terms with the new insurer the following things were needed:
- Provide mortgage holder name and loan number (usually found on a monthly statement). Your mortgage holder may require you to call and confirm that you are switching insurers.
- Verify vehicle mileage
- Provide your employer information
- Proof of alarm monitoring
- Select a policy start date
- Send payment for first coverage term (this could be monthly or every 6 months)
- Once underwriting is done, then call you current agent and let them know you are leaving and when the new policies go into effect.
In the end, the total process required about 4 to 6 hours of research, phone calls, discussion, etc. spaced out over about a week. Not too bad for $750 in savings! Your mileage may vary, but for us the insurer that provided the best bang for the buck was AAA.
What do you think? Any tips or hints from your own insurance adventures.
Thanks for reading!