Including the health insurance policy I have though my work, only 7% of our yearly expenditures go to insurance. For that price, our family is covered by a generous health policy*, Venessa and I each have life insurance, our renters policy covers the loss of any of our belongings, and both the car and scooter are adequately covered. I keep our insurance premiums low by using two tricks:
- Only get the bare minimum insurance you need (e.g. renters: do you really have $100k worth of stuff?), while keeping deductibles high**
- Every time I get a renewal notice, that trigers something in my mind that says “shop around for lower rates before you renew this policy”
I just did a thorough job shopping around for renters insurance, here are the steps I took (you will note how anal I am). These steps can easily be applied to any form of insurance.
I got quotes from every major company (Geico, Progressive, Nationwide, AmFam, PEMCO, State Farm, Allstate, Travellers) and kept track of them on a spreadsheet. The lowest quote was almost 3 times less than the highest one, so you should get quotes from all of them to see which is cheapest for your particular situation. The spreadsheet also had columns for “deductible”, “coverage levels”, etc. which helped me make apples-to-apples comparisons of the different policies.
The annoying thing with renters insurance is you have to figure out the combined value of everything you own (“Personal Property”). It’s a pain in the ass, but the alternative is having more insurance than you need (or not enough). If you live in an earthquake-prone area, getting an “Earthquake rider” is a good idea. I think it only added $2/month to my premium.
You can dial up/down your liability coverage to have a cheaper or more expensive premium, depending on your level of risk tolerance.
Tweak the above instructions for different kinds of insurance. For example, do you really need collision and comprehensive on your auto insurance? If your car is paid off and/or more than 7ish years old, you don’t need it.***
I actually enjoyed this process and look forward to doing it again in a year or so****. Not only does it save money but it’s interesting to see how tweaks to the coverage can impact your premium.
Let me know if you have any questions, I’m happy to help.
* I can’t take credit for this one since I didn’t do any shopping around for health insurance. It’s just what my company provides, and I consider myself very lucky to be covered by their group policy.
** You can only have high deductibles if you have an emergency fund to cover smaller losses. You do have an emergency fund with at least $1000 and at most 6 months worth of living expenses, right?
*** If your car isn’t paid off, what the hell are you doing borrowing money for a more expensive car than you can afford? Either figure out a way to save more money to get your fleet paid off, or sell it and use that cash to buy a car you can own outright.
**** I don’t recommend switching insurance companies any more frequently than once a year since it does impact your credit and insurability.