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Monday, October 28, 2013

Lifestyle: Insurance tips

Insurance is expensive; especially when you have cars, a house, relocation expenses from a new job and other toys.  The more you have the higher your annual insurance bill becomes.  Each year insurance companies change their rates based on the market and state/federal regulations.  Taking some time to shop around will help you save hundreds of dollars annually.

The Process
To begin you should identify the major insurance companies available.  Examples of major insurance companies are Farmers Insurance, Allstate Insurance, Geico Insurance, Progressive Insurance, USAA Insurance (for those who serve/served in the military and their families), etc.  Once you have identified insurance companies you would like to obtain quotes from, gather your current insurance coverage documents to help you compare what the insurance companies are offering.

Call each insurance company to obtain quotes for your home (homeowners or renters insurance), auto and other insurance you may need (boat, motorcycle, even life insurance).  This process will take some time but will pay off in the end.  It is important to obtain quotes for each insurance type separately, plus the quote for insurance combined (as an example - obtain a quote for auto by itself, home by itself, then a combined quote for both together, which usually has a discount).

After you have obtained quotes from all of the companies, compare to your current coverage and what you are currently paying (be sure if you receive a lower quote that it still provides you with appropriate coverage).  Be careful to compare the combined quotes and individual quotes.  Just because you receive a discount for combining coverage, does not mean it will be the lowest priced coverage overall.  You may also notice it is much cheaper to have auto insurance with one company and home insurance with another (this is what happened in my case).

Until you reach a certain percentage of equity on your house, mortgage companies require an escrow balance to pay for insurance and property taxes.  The mortgage company takes a portion of each monthly mortgage payment and applies it to the escrow balance.  If you reduce the cost of your home insurance, you can call the mortgage company to have them recalculate the escrow balance, which will reduce your monthly mortgage payment.

I performed the steps above and was able to reduce my annual insurance cost by $900 (part of the savings helped to reduce my monthly mortgage payment by $50).  In addition, the companies I changed to actually provided more coverage than what I was previously receiving.  Your savings may be more or less depending on the value of what you own.  If you have not compared insurance rates in a few years, you may currently be overpaying.  

Take some time to save yourself some money. wii


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