Rising Insurance rates saved us $1800/year!
This past month we got hit pretty hard with insurance raises across the board. It’s around this time every year our flood insurance, home insurance, and car insurance comes up for renewal, since we moved to Houston around May 2013. Mrs. SSC nearly split her gourd when she opened the envelope with the new rates for our home insurance. They had jumped almost $700 for the exact same coverage! $700!! WTF, man?! A few days later we get the renewal for our car insurance. Again, I see Mrs. SSC open the envelope and her jaw hits the floor and steam shot from her ears. It had gone up as well, almost $250 for my car and $140 for Mrs. SSC. Immediately, we ask ourselves, “What the hell is going on? We didn’t get into an accident (I did in August, but I was rear-ended and no claim on my part). We haven’t made any home owner claims? Why would they both raise dramatically at the same time? Have we gotten into some new age bracket we didn’t know about?” We couldn’t come up with anything, so we decided to start shopping around and that reminded me of the last time we changed insurance.
When we relocated from Denver and Chicago, respectively, to Bum-squattle, LA we figured we’d both save a lot of coin on car insurance. I was coming from a policy written for an outside parking only, decent vehicle crime area, and commute of 25 miles. I figured my new policy would be cheaper because I had a garage, 5 mile commute, and did I mention car theft/break-ins in Bum-squattle were really low? Yet, my policy was going to double. DOUBLE! For the same coverage on an 8 year old vehicle. WTF man?!
Mrs. SSC was in the same boat. Her Chicago policy covered her for on-street parking, high vehicle theft/break-in rates in her area and her policy would also more than double. What we didn’t take into account was that Geico (our provider at the time) had just lost their ass with claims from hurricanes Katrina and Rita pummeling the Gulf Coast a few years earlier… However, we ended up saving a lot of coin from our previous policies just by switching to a provider that hadn’t gotten hit so badly with the hurricane claims. Big win there just by shopping around.
We ran into the same thing with home insurance. Most big providers wouldn’t even issue any new policies and it took Mrs. SSC days to find a local company that would issue a policy. (See above with insurance companies losing their ass on those two hurricanes.) We got laughed at from some companies once they looked up our new address. Literal laughing followed by, “My computer says we don’t issue policies for that area anymore…” Evidently this was a thing and even long-time residents would get dropped because the insurance companies would reach a maximum number of policies they’d gamble on for that area and just drop those unlucky enough to not make the cut. It was literally a year to year scramble to have home insurance for some people I worked with.
But, I digress…
After spending 1.5 hours online (15 minutes doesn’t quite cut it anymore, the commercials lie! lol) Mrs. SSC decided we should go back to Geico. Actually, she found they had a slightly better coverage policy offered for the same rate as our insurance prior to the price jump. So, effectively, $390/6 months saved. That’s almost $800/year! Way to go Mrs. SSC!
Ironically, for our biggest liability the house, the amount of time spent shopping for home insurance was only 15 minutes. There were ~10 emails back and forth to our home insurance agent, the first few were along the “Are you sure this is correct? WTF?! What caused the jump?”. So, maybe 5-6 productive emails, and ~5 minutes perusing the latest flood maps, since the links haven’t changed from when we bought the house. Our agent found us a policy with the exact same coverage but would save us $523/year and $430/year with flood insurance. That’s a savings of almost $1000/year! This is partly because we are not renewing flood insurance. Gasp!!! I know, I know, Gulf Coast, pseudo swamp land, what are we thinking? Well, our biggest risk is the tall pine tree getting blown into our house and letting rain/hail/creepy crawlies in during a storm. That’s covered on our new policy since water is coming from above and not upward into our home. These type of clarifications account for most of the other emails. Unless our neighbors pools catastrophically flood and beeline to our house and not out to the street, we should be good. Famous last words, right?
By getting our hand forced to review our insurances and coverage, we ended up saving about $1800/year. That’s pretty sweet, but if they hadn’t raised our rates, we wouldn’t have had a reason to shop around. It’s the complacency and comfort of not changing things I guess. In Denver, and even before then, I’d usually check for better car insurance rates once a year, but never got a better rate from anyone. That’s why I had been with Geico for 16 years before the last time I switched companies. 16 years! Whew, that’s a long time… I guess it just drives home the fact that if you pay attention even when you think you’re doing everything right “frugal-wise” you can still try and find some better deals just by investing a little bit of time. If you find you’re already getting the best deal, that’s an awesome feeling as well!
When was the last time you shopped around for different rates on insurance?
Have you found better deals by shopping around for other utilities?
Have you ever moved from a big city to Bum-squattle, USA?
Fervent Finance
May 14, 2015I luckily don’t have a car anymore so don’t have to shop around like I used to. With my first job out college, our company had a relationship with an insurance broker who I used to go through. Then I got a new car and shopped around and realized Geico by far was the cheapest so I went back to the broker and he basically said “yeah go with them we can’t match that.” Right now I just have rental insurance through Geico at $134/year. With it being that cheap I haven’t shopped around. Not looking forward to moving back out to the burbs and eventually having to deal with insurance again 🙂 Great work saving some cash!
Mr SSC
May 14, 2015Thanks! I never had renter’s insurance until I watched a 30 unit building that was right across the street from my complex, burn to the ground one evening… As cheap as it was though, I also didn’t shop around. Geico had been the cheapest for me, but they got hit hard with hurricane claims, so what do you do?
Mrs. Maroon
May 14, 2015Nice work on the huge savings. When we moved up here to OK, we switched insurance also. Our coverage in Texas had skyrocketed. We got the answer that hail and tornadoes had wreaked havoc with rates all over the Metroplex. For a higher level of coverage, we have much lower rates now 🙂
All y’all swimming yet with all the rain?
Mr SSC
May 15, 2015That’s a good point about hail, we had some here the other week. Rains are still coming down pretty much everyday and under flood watches. 🙂 That’s great you got better coverage at a lower rate!
Anonymous
May 14, 2015We are shopping for a new house and found the rates from Geico were significantly less than the insurance company we currently use. If we don’t find a house I’ll be getting a quote from them for our auto, rental property and rental insurance.
Does your mortgage company not require that you carry flood insurance? We are new to an area that is prone to flooding and I had no idea how much flood insurance cost until I got a quote for a home we were briefly considering buying. The flood maps in our area were updated last year. The previous owners of the home had been there for 30 years or more and they had never had flood damage, however the new flood map put the home in the highest risk for flooding. Flood insurance alone was $3,000 and that would have left us under insured in the event of flood due to the cap on the amount covered. Needless to say I now understand why area residents who haven’t had flood damage are screaming about the increase in flood insurance costs – and the house we liked wasn’t so attractive anymore.
Mr SSC
May 15, 2015Our mortgage doesn’t require flood insurance because we’re outside the 100 year flood boundary. we chose to get it anyway due to it making us more comfortable. After two years though, we decided we’ll roll the dice with it. When we were looking in a different area, the flood maps had recently been redrawn due to some big storms and “epic” flooding. This put a lot of the houses we were interested in, in the 30 year flood boundary so flood insurance would have been required and was significantly more, closer to $2500/year.
It is worth it to shop around with home insurance too if flood rates are high. In LA we used a local insurance company that had great rates, but was underwritten b Lloyd’s of London, so if they had big payouts due, they would’ve been able to cover them. We made sure to check each smaller company we were interested in using and not all were covered very well. Something to think about if you go with a non-major carrier. Bundling with a major can save money too, and is typically something not offered from the little guys.
Good luck in your home search!
Laurie @thefrugalfarmer
May 15, 2015We did the same thing last year and ended up saving $750 by switching to Geico. SO nice not having to spend ridiculous amounts of cash on insurance!
Mr. SSC
May 17, 2015Anytime you can get lower rates and not lose coverage is a win in my book! Especially, when it’s paying less money to insurance companies.
Vawt
May 28, 2015I saved a bunch by increasing my home deductible and switching companies. I just could not think of what I woudl do a claim for under a few thousand dollars where i live now in Central California. If I still lived in the midwest with hail, wind, and tornados (plus falling trees too) I would have kept the deductible much lower.
I went from Kansas City suburbs to a 125k town in California. Not quite the change you did, but it still made me have to evaluate everthing around insurances, utilities, crime, etc. The probably reinforces that it is worth checking around every year or two on insurance rates, just to be safe.
Glad you saved so much!
Mr SSC
June 1, 2015I found it interesting how right around the time we drop flood insurance, Houston gets hit with devastating floods. Fortunately, we escaped dry and safe even though there was some flooding in parts of our neighborhood.
I think it’s always worth revisiting bills occasionally to look/ask for lower rates, especially ones as variable as insurance. We’ve gotten our security monitoring fees cut in half just by asking, so some companies do negotiate. You just have to ask.