Time to Negotiate Auto & House Insurance

Time to make another fight for my money, something that we should always do, with every purchase decision in our life.  I have recently had a few items drop off from my driving record (minor items, I promise!), pushing me to look at bills that are costly, on an annual basis.  Outside of the mortgage/house payment, what else is very expense?  Yes, auto and house insurance, something that I was spending approximately $1,425.00 combined for the year.  It is time to drill this expense down!

Coins Currency Investment Insurance Cash B

Auto & House Background

For those that don’t know, I drive a 2010 Honda Accord with close to 110,000 miles on the vehicle.  I purchased the car, with a loan, back in the summer of 2013, with 43,100 miles.  The car has been paid off since the fall of 2017.  The last 24 months, I have only been putting 7,000-8,000 miles on my vehicle, which is far less than what I was previously doing.  I do have a new life event, that will increase those miles to around 10,000 miles per year, potentially.  I would consider this a modest car, especially being 9 years, technically, old (as the 2010 models come up in the fall of 2009).

My house was built in the late 1930’s and I purchased this home, after it was essentially flipped, in September of 2011, or almost 7 years ago.  It’s a small 1,400 square foot home and, at the time of purchase, had a new roof, HVAC (A/C and Furnace), as well as a new water tank.  It’s, similarly, a modest house, as it has a small yard, a detached garage with very few complexities to the house.  I would argue the house is worth somewhere in the $105,000 – $120,000; however, we have a neighbor, with a smaller house, listing their home for $160,000.  I highly doubt my house is worth any where near that much, nor would cost that much to replace in a catastrophe.

Current Auto & House Insurance Package

Last year I wrote a post about the ever-increasing monthly costs with home ownership.  The article went over property tax, utilities (water & sewage) but, for the relation to this article, house insurance.  In that article, though, I also roped in my auto insurance cost.  At the time of that article ( 14 months ago), my costs were at $1,367 for the year, for auto & house insurance.  Earlier this year in April, my insurance carrier was threatening to increase the package to $1,554, for the year.  The split was $854 for house and $700 for auto.  My house is one year older, I’ll give them that, which means an older roof, HVAC, water tank and wear/tear.  However, is that enough to justify a $125 increase or 17%?  Hell no.  For auto, this was set to increase $62 or 9.7%, again – hell no.  However, after a few back & forth negotiations, I was able to drill it to $1,423 total ($759 for house and $664 for Auto), but that still represents a 4.1% increase.

Therefore, I am now ready to get back into the ring, and battle with my current carrier and see if there are other service providers to offer their insurance, at an overall better deal and better service, if possible.  I have yet to switch my house insurance since moving and I am now ready to see if my relationship should continue or break.  There are other reasons why I believe it’s time to shop around.  After the first week of July passed, another one of my driving tickets does not fall within the 5 year window.  Further, in the last 12 months, 3 items were removed from that 5 year window.  I sadly have two that are still within the assumed time-frame.  I am not looking to be overly aggressive here, but I am looking to save $173, at a minimum, to get into the $1,250 sweet spot.  I could see my auto & house insurance be $525 and $725, respectively.  Overall, this would equate to a 13.84% decrease and would unlock further cash flow for savings and investment opportunities.

Auto & House Insurance Savings Plan

In order to save $173 on my insurance package, currently, I am going to employ a few tactics.  Some will be obvious, but some may be provoking for discussion.

1.) Talk to my current provider – Yes, I’ll talk to Liberty Mutual and ask the to re-look at my package and see if there is anything they can do.  Service has been average, I was hit by a car 4 years ago and they weren’t great, but weren’t awful.  My agent did say that once another driving incident drops (i.e. the one in July), to reach back out to him in order to see if there could be savings.  What I’m concerned with, though, is the homeowners insurance and how much difficulty will be in dropping that.

2.) Outside Vendors – I’ll request quotes from 3 different vendors, outside of the current provider.  I want to at least have 3, to see what I’m truly working with.  The three that come to mind are Geico, State Farm, All State.  If one of them is too difficult – Nationwide will then slide in.  Thoughts on these providers?  Any others to suggest?

3.) Coverage/Deductible/Paid in Full Discounts – Currently, I have fairly high-er deductibles on my plan, but if the above fails, I will begin to look into that option.  However, before looking at the deductible change, I will see if I am over covered with what I currently have and see if it makes sense to adjust there.  I already pay my auto insurance in full, but I would like to see what I can do from the home insurance stand point.

I would believe that these 3 tactics would increase the likelihood of saving money on my auto & house insurance bill.  Any others that you would suggest?

In the end, I am making sure I am reviewing one of my many bills that I recommend, on an annual basis.  I am determined to save money.  This is happening and I am not going to stop until I do.  Further, this is just the first bill, as my gas and electricity suppliers are up next!  What do you think?  Feel like I can trim some dollars fairly quickly there?  The summer heat has had their intense days and I think I could use a nice “tune” up there, eh?  Let’s get after and make every fricken dollar count baby!  Now get out there and save some money.

-Lanny

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13 thoughts on “Time to Negotiate Auto & House Insurance

  1. Hi Lanny
    Very good move to tackle insurance costs. One can easily save a nice amount which can then be put to work year by year. Some categories – especially health insurances – tend to creep up each year, that‘s why my wife and I every second year have a process of „comparing, negociating, substituting and slashing“ with regard to insurances.
    Cheers

    • FS –

      Thank you. I like the one time per year, to sit down and go through the expenses/contracted expenses to see if you can slash it down. I love saving money and getting the same value in return!

      -Lanny

  2. For Geico I think you can get an extra 5-8% discount if you own 1 BRK.B share. The stock doesn’t pay dividends but depending on your quote, it might be something to consider. I have no experience with them though so this isn’t a recommendation; my insurance is with Amica.
    Hope you get a good price!
    -DL

  3. Lanny,

    Great move Ibdonthe same every year with all my expenses specially the insurance. For years Massachusetts had only few options, now with so many options and competitions, you be crazy not to shop your options. Thanks for the great article and reminder for all of us

    • Pursuit –

      Sweet. I completely agree and I’m pumped that this article could serve as a reminder to readers. It’s a fun, sometimes frustrating, sometimes time consuming process, but hey – save that $$.

      -Lanny

  4. Hey Lanny,

    Always good to evaluate things. With being in Ohio, you may want to check out Erie Insurance. I’ve had them for years for my car insurance and rental insurance and they seem to be a great rate and my insurance has gone down a bit every year.

  5. I haven’t shopped my rates yet this year but did just call my insurance on Friday to ask for a low-mileage discount now that I work from home and don’t drive nearly as much. Unfortunately it will take some time as I had to provide an odometer reading now and then provide an update before my next scheduled renewal.

    I typically do this practice with our cable (although I think when our current promotion runs out I am going to cancel entirely) and cell phones, but I have not been as diligent with our insurance or even utilities (there can be options to switch or reduce costs with certain programs). With the insurance, be sure to look at the impact your deductible can have as well.

    • DivvyD –

      Nice job on the low mileage discount. That’s a tough one but can understand they want to audit your mileage.

      I do the same with the internet, every 11-12 months, I have to pick up the phone and I am absolutely okay to pay the price I’ve been paying. Utilities are amazing to switch who is the service provider.

      Save that $ Divvy D, save that $.

      -Lanny

  6. Hey Lanny!

    Love following you guys! Thanks for all the effort you put in to help educate us. My wife and I just had a major score with saving on home and auto insurance by using an insurance broker as opposed to one of the “big companies” that we’ve all heard of. Apparently, independent brokers (as compared to an agent for a State Farm, All-State, etc.) have access into the smaller companies that spend less on their marketing, thus saving money for us end users, but still deliver equal and often times better coverage.

    We live in a hurricane area, as well as in a flood zone, and for the same money as we were insured with State Farm, we are now receiving thousands more in coverage with smaller deductibles and premiums! Look into an independent broker in your area to help you really discover what’s out there.

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