Last week I wrote a post about how my wife and I were looking to find a new homeowner’s insurance policy after we received our latest policy paperwork in the mail and our rates had gone up again to the tune of almost $200.
Since we signed on with our homeowner’s insurance company several years ago our home value has dropped, but every year they say the replacement cost for our home has gone up by tens of thousands of dollars. Because of the increase in the replacement cost of our home (which we believed to be highly inflated after checking with my home builder father-in-law), our rates have gone up by almost $500 in the last few years.
I have been able to get them to reduce the replacement cost on our home one time, but this increase was the final straw. I knew it was time to conduct a new search for homeowner’s insurance. So today I’ll walk my way through the process of how I was able to reduce our homeowner’s insurance rates by a huge amount.
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Time To Search For A New Homeowner’s Insurance Policy
I switched to our current homeowner’s insurance company 4-5 years ago after we moved to our newly built home. Our previous insurance policy had gotten too expensive, and after doing a search we found a decent policy with a company that had good reviews with the ratings agencies like Standard & Poor’s or A.M Best. We signed up for the policy, and at the time we ended up saving about $200 a year on our homeowner’s insurance. Not too bad.
We stuck with the new policy over the past few years, but steadily over time they increased what they say is the replacement cost on our house (what it would cost to re-build our home in case it were a total loss), and after 4-5 years of this our rates have gone up by around $500. This past week I got our statement in the mail detailing our new policy.
Less Coverage, Higher Premium
The new policy statement notified us that there were drops in coverage, certain things like damage from wind storms and hail, were no longer covered by our normal deductible. There was now going to be a separate and much higher deductible for those coverages. Since those things are somewhat likely to happen where we live since we live in tornado country, that’s not a good thing.
Despite having worse coverage, the insurance company was also upping our replacement cost for the house again. We were now going to be paying $1323 a year for our new homeowner’s insurance policy.
Getting Organized Before We Got Quotes
Once I got the new updated policy information I talked with my wife about switching. She agreed that it was time, and the next day I set about getting quotes on new coverage. First, I created a quote tracker excel spreadsheet.
Insurance Quote Tracker Spreadsheet
In my spreadsheet I detailed the coverages that we currently had. I didn’t want to be getting quotes on different coverage, so I typed in our current coverages for:
- Dwelling coverage
- Other structures
- Personal property
- Living expenses
- Personal liability
- Medical payments
- Deductibles
After detailing our current coverages in the spreadsheet I added multiple rows for each quote on homeowner’s insurance so that I could compare all of the premiums. Getting 100% like coverages wasn’t possible as many of the companies use different formulas to determine how much coverage you get, but I got as close as we could. Here’s a look at how the spreadsheet is setup, feel free to download a copy of the full insurance quotes spreadsheet via the link if you’re thinking of searching for quotes right now!
| Company | Dwelling Coverage | Structure Coverage | Personal Property | Living Expenses | Personal Liability | Deductible | Premium |
|---|---|---|---|---|---|---|---|
| Current Company | $333,000 | $33,300 | $166,500 | $66,600 | $300,000 | $1,000 | $1323 |
| Quote A | |||||||
| Quote B | |||||||
| Download the spreadsheet | |||||||
After I set up our insurance quote organizing spreadsheet, it was time to get quotes.
Getting Quotes: How We Dropped Our Rates Substantially
To get rate quotes you can go direct to insurance companies, you can find an insurance broker/agent, or you can go through an online quote engine to get multiple quotes all at once.
For me, I figured I should practice what I preach and try to get quotes through the homeowner’s insurance quote engine I have on this site. To get your own quote, just choose your state from the drop-down below, and hit the “get quotes” button.
On the page that came up for my state it gave me several options of places to get quotes. Several were insurance aggregators and a couple of them were direct to the insurance company. I clicked on the buttons to get quotes from a couple of the aggregators and one direct from an insurance company.
For the one insurance company I filled out direct I got a quote relatively quickly, and after talking with the agent on the phone I filled in the numbers on my spreadsheet. The quote they gave me was less than I was currently paying, but only by a hundred dollars or so a year. Other companies sent in their quotes, and I got a bunch of phone calls and messages from agents trying to get more information from me to give me a quote. I called several back and got quotes. Their quotes were all less than my current premium – but still only $100-200 less than I was paying. I had a feeling I could do better.
Finally, after filling out my information for one of the insurance aggregators, I found an independent insurance broker. The brokerage was through HomeInsurance.com and they get quotes for you from several different companies. I sent that one through, and literally within 1 minute my phone was ringing.
I talked to a friendly agent who told me she was one state over from me in Wisconsin. I answered a few more questions for her about my situation, and after typing it all in she ran quotes for several different companies. I was disappointed at first as the quotes were all coming back at only $100-200 less, like all the other quotes I had gotten. She explained that a lot of companies had raised rates in the past few years due to Hurricane Katrina and Sandy, among other things, and that rates were generally high. She ran one last quote and at first she wasn’t sure if the quote was right because it was so much less than the others. After double checking everything and making sure that the coverages were all what I had requested, she confirmed that the rate was correct.
By switching to the new company I would have my premium drop from $1323/year all the way down to $645/year, a savings of $678/year! But we weren’t done yet.
Switching Auto Insurance To Save Even More
The independent agent said that she thought they could probably save me even more money by switching my auto insurance to the new company as well. I had checked my auto insurance rates a couple of months ago, and the lowest rate I could find only saved me about $50, and I didn’t want to take the hassle to switch just for that.
This time by switching my auto insurance to a new provider, at the same level of coverage, I was able to save $104 on my auto insurance. Not only that, but it would drop the homeowner’s insurance premium to $583/year, an additional savings of $62/year.
After running the numbers, and realizing that none of the other 10+ quotes I had run had premiums even close to this company, I decided to move forward. We switched our homeowner’s and auto insurance to SafeCo Insurance, a division of Liberty Mutual. They have good ratings with all of the ratings agencies, so we felt comfortable switching to them.
When all was said and done our savings was $740 on our homeowner’s insurance and $104 on our auto insurance. Our total savings by switching our two policies was $844/year!
You Can Switch And Save Too
While I’d like to say that I did something special to save as much money as we did, the reality is that all I did was take the time to check out our options. I setup some organization to track our quotes, and then I got quotes from multiple sources that allowed us to save a ton of money. It only took part of one afternoon, and at the end we had saved more than $844 a year. To me that’s definitely worth the return on my time. How about you?
Have you recently switched insurance, or looked into it since you read this post? Tell us about your insurance search and how much you were able to save (if you did find savings)!
I preach doing this but it’s been something I’ve been lax on the past two years. My goal next week is to get this done just to make sure we’re getting competitive rates! We’ve only been with USAA for 3 years and at the time of signing up they were WAY cheaper than everybody else, but I shouldn’t keep assuming that.
Congrats on saving so much money; that certainly helps the budget!
Thanks, we were excited to see such huge savings. We weren’t sure we could get rates much lower either, but it never hurts to check. It really only takes a little work to check, and the savings can be big!
I am an insurance broker in California and see this type of thing happen ALL the time. If you have a good relationship with your insurance broker rather than doing all the shopping online yourself, all it should take is a call to your broker to check the rates for you so it will be that much easier for you the next time this happens. This is one of the benefits vs. having a Geico / AAA / USAA where you will never speak with the same person when you call.
As an agent, I really appreciate the way this article outlines what to look for when doing your shopping. So many articles about saving money on your insurance premiums don’t outline what to look for. People go online to aggregators or direct insurance companies and all they look at is the price. There are SO many companies that will quote LOW coverage or HIGH deductibles to win business these days.
Thanks for the great article.
Nice post Peter. I saved ~$100/month on the combination of home and auto insurance with the following process:
1) I scanned copies of my insurance declaration pages (the page that shows the coverages)
2) I sent the copies to 3 brokers (1 was a referral) and told them to send me quotes for comparable policies. By sending them the declaration pages, I avoided having to discuss everything with them and it saved them time. I told them we can talk about changes after I see the quote
3) Narrowed it down to 2, had conversations and picked one.
I like your process as well. Very simple and straightforward.
Nice post, a great explanation of this process that will surely help many of your readers. Kudos on putting these savings into your pocket.
I too am an independent insurance agent in Columbus, OH. I represent a number of very good companies and often find what Peter experienced. The rating matrix for the companies has become very complex and hard for even us agents to figure out. I will prepare proposal for a customer and 3 to 4 of the rates will come back within $50-100 of each other, but the 5th one comes out much lower. Be careful of teaser rates as well. You need to make sure the agency preparing the quote has run all the applicable reports, without them the proposal will not be accurate. Rates are important, but coverage is also very important and not all polices are the same. So my best advise is to find a good independent agent you can trust and do annual reviews to make sure you have the coverage you need at competative rates.