When your auto and homeowners insurance renews each 6-months or annually, do you really take a look at your policy to see how much your premiums have increased?
It can take some work to compare premiums and switch companies, but it can be worth a lot of money (like thousands annually) when you do search for the best policy/premium – especially if it's been a long time since you've done a comparison.
I typically don't compare unless my insurance rate goes up over a certain percentage annually, but it's usually worth a huge savings when I do. For example, last summer I was able to bring our auto insurance down from $2,000 annually to about $1,200 annually for the same policy.
How do you find the best rates?
- Call your current insurer for their best rates. When I called my current insurance company to cancel, they were able to drop the price about $300. I had already committed to my new insurance company (and the rate was still higher than my new premium), but it might be worth it to try to lower the rate with your current company first.
- Go directly to the insurer's website to get a quote (or call an agent). It's best to have your current policy information so that you get a quote on the exact same collision and comprehensive coverage that you currently have (so you can compare apples to apples). Some of these sites include Allstate, State Farm, AAA, Liberty Mutual, Progressive, and Geico.
- Use an independent broker to compare rates for you. The last time that I compared our rates, I also called a local broker and asked him to send me some quotes for auto and homeowners insurance. I ended up going with another company, but it was nice to let them do the work for me!
Other general tips for reducing insurance costs:
- Consider increasing your deductible amount. You want to make sure that you have money to cover the deductible in your emergency savings fund.
- Ask about any membership or alumni discounts. For example, I have a discount through Liberty Mutual through my university.
- Consider covering your auto and home under the same company to get multiple policy discounts. For example, my homeowner's insurance is higher with AAA than with my previous company, but I switched, because the total package was less expensive with both auto and home.
- Pay for your entire premium in one payment. If you make monthly payments, you are usually charged a service fee each month. Although it's only a couple of dollars, those couple of dollars add up fast. Instead, set money aside each month, so that you have the money ready when your premium is due. Also, some insurers give discounts if you have your premium automatically deducted from your bank account.