So, you want to be an insurance shopping hero?
As you may have read in my June 2013 Report, one of my goals for July was to switch car and home insurance providers to save an estimated $500+ a year.
Read on to see how much I was able to save with about two hours of work that included getting on-line quotes and speaking with insurance reps.
Money Saving Breakdown – The Quest to Save On Car and Home Insurance
- Difficulty (Super Easy/Easy/Medium/Hard/Expert): Medium
- Average Savings per Year ($/year): 475
- Time Required (mins): 120
- Savings for your time ($/hr): 237
Switch to Geico and Save 26%!
Could it really be this easy to save hundreds by switching from StateFarm to Geico as the commercials suggest? We’ve been with StateFarm insurance for about 15 years, and we always assumed we were getting a pretty good deal with them. Well, as I’ve come to find, you know what happens when you ass-ume…
Well, the online rate quotes for Geico.com showed that I could save ~26% (or $431) if I switched our car and home insurance to Geico . We have a 1997 Toyota Camry and a 2004 Toyota Sienna, and our home is insured for ~$300,000. The plan was to get comprehensive and collision on the Sienna and just the bare minimum on the Camry.
I spent a fair amount of time trying to decide if we should go with the higher deductible to save money or go with the same $250 for car and $1,000 for home deductibles that we had been using. After some great input from my wife, we decided to keep the deductibles where they were. Read why we made this choice here: Does High Deductible Car or Home Insurance Actually Save Money? This brought our calculated savings down a bit, but it was still going to be in the $400/year range. Great! Where do I sign up?
Home Insurance Rates Too Good to Be True?
I called up Geico and registered for car insurance. It was easy and the process took about 10 minutes. The rep then transferred me over to the home insurance division. After a series of questions, it became apparent that I would be charged a much higher rate for the home insurance than I was quoted on the Geico website (see the table below). The problem was, I used the same amount of home coverage as I had with StateFarm. Apparently per Geico’s calculations (this also matches up with Nationwide and Progressive), I needed ~$175,000 more insurance coverage to completely cover rebuilding the home based on the square footage. Great! We’ve had our home under-insured with StateFarm for the past ~2 years, and they’re charging us and arm and a leg for it! After Geico re-ran the numbers, it turned out that I’d only be saving ~$173 per year if we made the switch. That’s pretty good, but not good enough for MoneyAhoy! After thinking it over for a couple of hours, I called back Geico and canceled my car insurance (sticking with StateFarm until I could find a better deal).
Plan B: How Did I Save on Car and Home Insurance
I shopped around with a couple other insurance carriers and actually ended up with the best rates (by far) from Progressive (see the table below). Their phone rate matched their on-line rate, and I was setup with my new car and home insurance in about 27 minutes of phone time. I was able to save a total of $474.82 a year, keep the exact same auto coverage, and increase our home coverage from $300,000 to $475,000 so that we’d be properly insured if our home experienced major damage. Not too shabby!
| StateFarm | Geico – Online | Geico – Phone | Nationwide | Progressive | |
| Car (6-months) | $432.41 | $272.66 | $272.66 | $350.40 | $222.00 |
| Home (annual) | $786.00 | $674.00 | $933.00 | $949.00 | $732.00 |
| TOTAL (annual) = | $ 1,650.82 | $1,219.32 | $1,478.32 | $1,649.80 | $1,176.00 |
Final Thoughts
The quest to save on car and home insurance ended happily. It was pretty easy to switch over to Progressive, and all the agents I dealt with (at StateFarm, Geico, and Progressive) were all very friendly and courteous. The entire process took much longer than I anticipated (research and phone time was about 2 hours total), but the savings were well worth it. Where else are you going to get $237 per hour of your time?
I’m looking into saving on our car insurance right now for when it’s due in a couple of months. It’s more difficult to save on auto in Canada because of the insurance set up. Our Insurance Corporations have nearly a monopoly.
Daisy @ Prairie Eco Thrifter recently posted…Four Weekend Activities that will Rock Your Financial World
I found these couple of tips online, not sure if they are helpful to you or not:
You can use three different types of anti-theft devices. When you know and understand them, you can get a better price on your Canadian auto insurance quote:
1. Mechanical – Devices such as a locking bar can prevent the steering wheel from moving, until the owner unlocks it himself or herself.
2. Car alarms – You can install an alarm in your car that causes alarms and lights to go off if someone tries to break into your vehicle.
3. Electronic – These are immobilizers that will cut off the power to the ignition, making the car impossible to start.
Good luck saving some money!!!
Derek Chamberlain recently posted…Quick Money Saving Tips for Car and Home Insurance Savings
I’m extremely amazed with your writing skills and also with the layout on your blog. Is this a paid theme or did you modify it yourself? Either way keep up the excellent quality writing, it’s rare to see a great blog site like this one nowadays.. Many thanks.
Mike, thanks for the compliment! I modified the theme myself using the twenty eleven base theme.
Hi Derek,
This is a really nice break down how you were able to save money on your premium. Most people are starting to switch insurance companies to save sort of like switching telephone companies. The bill goes up after a while and you have to switch to save. Fortunately for auto insurance it is really easy to switch as long you don’t let your insurance lapse.
Greg Fowler recently posted…A review of affordable vehicles and getting cheap car insurance for first time drivers
Greg, I was worried that the new company would jack up rates over time too. With StateFarm being 200% more expensive, it just made sense to pull the plug. Hopefully, Progressive stays lower for a long time 🙂
Derek,
Typically the rates are going to go up over time since there are factors which are out of a drivers control. I don’t know all of them, but for example, (insurers are going to make a profit), is if the insurance firm has more than normal claims they could raise your rates because of it. I also know they have to go to the state to raise your rates and are not able to raise them in the middle of your policy term unless you have a traffic violation.
Greg Fowler recently posted…GEICO Car Insurance Prices: A Select State Comparison
Greg,
Interesting thoughts. I know that prices will steadily go up over time, but it seems like State Farm really screwed me over the years by charging nearly double the rate compared to many other companies. There’s making a profit, and then there’s gouging. I guess it’s my own fault for not shopping around for alternatives sooner! Buyer beware!