Shopping for Insurance Quotes Could Save You Hundreds of Dollars Annually

Computer keyboard with "insurance" written on a key

Many insurance companies gradually increase your rates over time and, if you aren't careful, you could end up paying substantially more for your coverage than you need to. Unfortunately, reviewing our insurance policies is one of those chores we often file under, "I'll do it when I get around to it."

If you are like me, "when I get around to it" is easy to push off until another day. That's why it's a good idea to set a self-imposed deadline. For example, the start of the year is a great time to review your insurance policies. You can also do it on your birth month or any other time of your choosing, so long as you set a date and stick to it. But even an annual insurance review may not cover all of your needs. There are times when it may make sense to review your insurance policies more frequently.

When to Review Your Insurance Policies

It's a good idea to review your insurance policies at least once a year or anytime you have a major life event. Life events can include such things as marriage or divorce, having or adopting a child, a death in the family, moving, gaining or losing employment, a child moving out, and similar major life moments.

Which Insurance Policies to Review

At a minimum, you should review the following policies, as applicable:

  • Auto Insurance
  • Disability Insurance
  • Health Insurance (if not using Tricare)
  • Homeowners Insurance/Renter's Insurance
  • Life Insurance

How to Compare Insurance Policies

It's a good idea to get insurance quotes from several companies before buying a policy. Rates will vary based on many factors, and some insurance companies have much better rates than others.

Here are tips to get you started:

Start by educating yourself.

Insurance policies use specialized terminology. Spend a few minutes ensuring you understand how the coverage works, which coverage you are opting into (or out of), and how much you will be paying.

Most insurance companies have education centers on their websites where this information is readily available. Or you can always use your favorite search engine to find the information. Just search for "understanding auto insurance" or a similar phrase, and you will be able to educate yourself in a few minutes.

Next, get organized.

I recommend building a simple spreadsheet to help you track the quotes you receive. This doesn't need to be complicated. I simply start with a column on the left with the insurance company name, another with its contact information, and then I list out the factors used in the quote.

For example, if you are getting an auto insurance quote, you would want to list the coverage limits for liability limits, whether you are getting comprehensive coverage or only collision, and any add-ons, such as rental insurance coverage, gap insurance, roadside assistance, etc. Then, you will want to list the monthly or annual premiums.

Make sure you are comparing the same coverage for each policy so you have a true apples to apples comparison.

Fill in the spreadsheet as you get your quotes. Once you get four or five quotes, you should see trends and get a good idea of which policy offers the best coverage for the right price.

Repeat this process for each type of insurance quote you are getting. You can use this spreadsheet each year and simply update the numbers as you go.

Finally, get multiple insurance policy quotes.

I recommend getting at least four to five quotes per policy. This doesn't need to be complicated. You can often make individual phone calls and obtain this information in about five to 10 minutes, depending on the company.

You can even take a shortcut in this process by visiting a website that offers multiple quotes or by having an insurance agent run multiple quotes for you. Be sure to get quotes only from insurance companies that are highly rated by the industry rating companies such as A.M. Best, Fitch, Moody's and Standard & Poor's.

In Summary

Getting new insurance quotes isn't fun. It's more of a chore than anything. But it can also save you hundreds of dollars per year, and that potential savings is worth giving up an hour of your time once a year or so.

Don't Wait Until Theft or Disaster Strikes

Be proactive and protect your investment. For more information, visit the Insurance Center.

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