Shopping For Insurance

Our insurance costs for auto and home have been killing our budget. It is one of the categories in our budget I have identified as HOT. The goal is to save money!

Well this became even more important when I received our homeowner’s insurance rate for next year. Our current policies for auto and home are with Safeco, A Liberty Mutual Company.  Our policy renews in December. Our rate increased from $1560 to $1700. This is the second year of an increase. Last year it went up from  $1400 to $1560. I was so appalled by the new figure, I decided it was time to shop around and find the best rate.

I spend Sunday afternoon filling out online quote forms. Today, it seems like every single insurer called me. I have received quotes from Geico, Nationwide, Progressive, and Allstate. Allstate has been the best quote so far. Below is the situation.

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Allstate’s homeowner’s insurance beat Safeco’s policy. It is $908. The deductible is 1% of the home value. I have requested a second quote with a higher deductible to see the savings. At $908, switching to Allstate is a no brainer.

Allstate’s car insurance is also lower. Right now our annual premium with Safeco includes comprehensive/collision coverage for a whopping $2060 with a $500 deductible. Yes! Crazy amount. My husband turned 26 and I turned 25 in the past couple months, so I believe our new rates reflect our aging age! :) Allstate’s rates are lower. As you can see the same coverage with $500 deductible is $1538. Savings, but it’s not high enough savings for it to make a real difference in the budget. So, I requested a second quote for a higher deductible. The $1000 deductible equates to a $1344 premium. $192 difference. I would make that savings up by not having any claims in 2 years.

So HERE IS THE DILEMMA. If I drop comprehensive/collision coverage, my premium goes down to $716. That is a $1344 difference from current policy and a $628 difference from 1000 deductible.

Our KBB book values are at the top. The money we would save, would establish the new car fund. In just 3 years, the fund would be $1884 from the savings. The risk is if something happens and it’s our fault, the damage to our car would not be covered.

Year 1 $628.00
Year 2 $1,256.00
Year 3 $1,884.00

Any advice for a fellow blogger considering this move?

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3 comments

  • When I turned 25, I switched insurance carriers and saved about 25% on my total insurance package. I just changed again this year for a 25% reduction again. My car is still worth about $11,000 according to KBB (it’s a 2011) and so I am not ready to drop comprehensive and collision yet. I’m not sure when I would, to be honest. I haven’t gotten that far yet. I did drop one of my deductibles to $500 this year as I calculated I would have to not make a claim for 17 years for the $1,000 deductible to be cheaper.

    How long do you plan to keep your cars? I would consider dropping collision/comprehensive at the $3-5,000 marker, but not on the $7,000 car.
    Leigh recently posted…The Time and Costs of CommutingMy Profile

  • How crazy that I was thinking the same thing this morning! Personal finance people must have a strange brainwave sharing gene. Insurance should always be reevaluated every year or when a life changing event happens. For instance, when you got married your insurances rates should have dropped across the board. When it comes to auto and home insurance I tend to overinsure. Peace of mind is important to me. However I’m still efficient making sure I’m not overpaying. Like Leigh, I don’t like the idea of dropping collision because it happened to me. My car hit a slippery spot on the road and caused me to crash my car into the highway barrier, 5k damage…1k deductible. Comprehensive is even more important because I fear vandalism and mother nature is so unpredictable lately. This is coming from someone who already has enough emergency fund to replace my car if needed. Ultimately, I’m working on a way to have a large enough emrgency fund to self insure everything, but I need an income like Leigh’s to achieve that LOL 😜

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