Pay Less for Your Insurance Coverage

In this first article of the 15 Steps to More Money and Less Debt series, I’ve got your first big financial win in store for you today. It’s about a topic that we all dreamt of reading about one day: insurance.

Woo-hoo! Aren’t you excited?

Let’s be honest. Half of you just fell asleep at the computer simply by reading the word insurance.

And that’s okay. Insurance is only truly exciting for insurance company CEOs, insurance agents, and actuaries. You’re hoping you never have to use your insurance, but it can still cost you a ton of money. So why not look into it?

You don’t have to be excited about insurance, but doing a quick checkup on your coverages can save you hundreds of dollars per year. The best part of saving all that money? All you have to do is check around to see who wants to provide you service for the least amount of money. Clicking a couple of quote buttons on websites is one of the easiest ways to save hundreds of dollars per year. Not bad for a few minutes of your time!

If you simply cannot wait, here are the best places to get free insurance price quotes.

Today I’m going to walk you through:

  1. Figuring out if you are over or under-insured.
  2. Finishing a price check to save the most amount of money in the shortest amount of time.
  3. Remembering to price check regularly.

We’ll focus just on car and home insurance for now, but everything we’re talking about applies to other types of insurance: renters, life, disability, umbrella, and so on.

Ready? Let’s dive in.

Do You Have Too Much or Too Little Insurance?

Your life isn’t stagnant. What was important to you 10 years ago probably isn’t important to you now. The same is true of your insurance: you may have been able to get by with the smallest and cheapest level of coverages in the past, but your life is probably different now.

Different life = Different coverages needed.

Of course, determining whether or not you have too little or too much insurance requires you to know how much insurance you currently have. So grab your policies and take a look. (You can access them online or grab them out of wherever you store important files.)

Once you have your policies in front of you, doing a quick review to see if you are comfortable with the coverages you are buying.

Here are some areas you want to check:

  • How much am I paying per month/six month term/year?
  • What coverages do I have?
  • What deductibles do I have?
  • Am I comfortable with all of the above? (Does having a $1,000 deductible make sense? Has your car’s value dropped so low that you can go with liability-only insurance? Do you have or need extra insurance riders on your jewelry and electronics?)

Don’t get caught up in figuring out all of the specifics to every answer. You probably have decent coverage, but some of the extras can really bring your rates up.

Your goal is to figure out: what your insurance is costing you and what your coverage levels are.

Once you have those, you can begin price shopping for a better deal.

Find a Better Price: Do a Price Check

Once you know what specific coverages you have, what deductibles you would pay in the event of a claim, and how much the policy costs per term, you can start doing price shopping to get a better deal.

Don’t be overwhelmed by this. It is really simple.

For example, for car insurance, you might write down:

  • Bodily injury liability: $100,000 per person, $300,000 per accident
  • Property damage liability: $100,000 per accident
  • Medical payments: $5,000 per person
  • Uninsured motorist bodily injury: $100,000 per person / $300,000 per accident
  • Uninsured motorist property damage: $15,000 per accident

For homeowners insurance, you might write down:

  • Dwelling coverage: $250,000
  • Separate structures: $25,000
  • Personal property: $187,500
  • Loss of use: 12 months
  • Liability: $500,000
  • Medical payments: $5,000

Those are the major portions of the coverages for these types of policies.

Then all you have to do is to visit the websites of the major insurance companies to get quotes. Some will require you to talk to an agent, but you can get a good feel for the market by just doing online quotes.

Here are major companies for each type of insurance by zip code:

That doesn’t cover all of your options, but it is a solid start to finding a better rate. Be sure to check quotes both separate and bundled. (Sometimes going with two different companies can provide bigger savings than bundling with one company.)

It shouldn’t take you more than 5 minutes to complete a quote with those companies, so dedicate an hour to the process.

Is an hour worth your time? Imagine saving $50, $100, or $200 per year just by switching insurance companies. That’s a great return on your time investment.

Don’t want to spend an hour? Fine, randomly pick just a few companies for each type of insurance and go from there. You might just be shocked at how much you could save.

Don’t Price Check Once

Once you’ve found your better rate and switched companies, don’t forget to do it again in the future. Insurance companies want to lull you to sleep so you keep on sending your hard earned money to them. They’ll get you to switch today, but over time your rate will either creep up or simply be out of line with the market. (This is also why insurance companies push bundling so hard: it seems so much harder to change two insurance polices than one. Don’t fall for it!)

Set a reminder: either a calendar reminder in Outlook or Google Calendar, whatever way you remind yourself to do something, and check prices again in 12 months. Make today an annual insurance price check today.

What Are You Waiting For?

You could literally save hundreds of dollars by price checking your insurance. Go try it out. In our next email, we’ll walk you through how to potentially save $10,000 or more with an even bigger win.

Your To Do List

To save money on insurance, you need to:

  • Check to make sure you have the coverage you need/want and are not over or under-insured.
  • Shop around for best prices for major insurance companies.
  • Change insurance companies if you can save money.
  • Set a reminder to repeat the process in 12 months.

About the Author

By , on Jun 18, 2012
Kevin Mulligan
Kevin Mulligan is a debt reduction champion with a passion for teaching people how to budget and stay out of debt. He's building a personal finance freelance writing career and has written for RothIRA.com, Discover Bank, and many others.

15 Steps Financial Success Plan

Leave Your Comment (3 Comments)

  1. Jerry says:

    I think reviewing your insurance policies each year is a must. It will lead you to see if you are under-covered or if you need more coverage.

  2. Jim says:

    @Kris, I agree in fact I think it’s best to even compare insurance rats and prices every year. There are always new rules and policies that are hitting the market that could save you a ton of money if you fall into the right area.

  3. Kris says:

    Insurance is so expensive that you really should compare prices every few years. You would think that the longer you stay with one company, the better rate you will get. But that’s not always the case, especially if you’ve had any claims (sadly I learned this all the hard way).

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