rewrite this title We Saved $2,250 a Year by Reviewing Our Insurance Coverage – NerdWallet

Each month, NerdWallet suggests one wallet win to help you feel more confident about your money. For June, it’s an insurance checkup.

Coincidentally, two Nerds (hello!) recently did our own insurance checkup. We learned some things, and we saved $2,250 in the process.

Here’s how it went.

And then we had a near-miss tornado in my neighborhood. It was truly the “perfect storm” scenario — the combination of factors made reviewing my insurance coverage and identifying any gaps a priority.

Kate: On my end, we added a teen driver and a third car, and our insurance went up substantially. Also, our homeowners rate has been climbing, and we’ve just been too lazy to deal with it because we have bundled home, auto and umbrella policies. So getting that quote felt daunting.

Erin: It’s pretty standard advice to shop around for insurance on an annual basis, but when it goes up a little bit at a time — say $15 a month or so — it’s easier to just stick with what you have.

Kate: Inertia is a real thing.

Erin: It honestly didn’t even occur to me that I might be overpaying. When I started the process, I was aiming to get more coverage, not a better rate. But I ended up paying less for way more coverage overall.

Kate: Absolutely true in my area.

Kate: And then there are major life events: if you’ve had a baby, gotten married or divorced, or had a driver get a license, as was the case for us. A kid going to college can also change things.

And when your rates go up in general, that’s a flag — it’s just a good time to look around.

Kate: A win!

Erin: A win — but my existing auto insurance rate was lower than what they could offer me so I stuck with that and increased the liability coverage. It’s worth noting my auto and homeowners insurance policies were bundled; I called my insurer to make sure my bundling discount wasn’t significant enough to outweigh the savings from switching my homeowners policy. It wasn’t — just about $72 in discounts a year, which I factored into my overall savings.

Kate: Umbrella policies pick up where your home and auto policies end in terms of liability. So you have coverage in case you’re sued, for instance.

Erin: Exactly. So I’m getting a lot more coverage across the board and saving $250 a year overall. That’s not a huge amount, but it’s 8% less than what I was paying, and I’m no longer worried about being underinsured. Like I said, I didn’t go into this to save money. It was just a happy accident.

Kate: That’s impressive! We tried a few approaches, including talking to NerdWallet Insurance Experts, some local insurance brokers and a few companies directly.

I’ve gotten quotes that save us more than $2,000 a year on our homeowners insurance. Unfortunately, adding a teen driver and third car upped our auto rates by almost $5,000 a year. And that quote has held up across companies.

Erin: Wow. OK, I knew it increased rates. I didn’t realize it was quite that much.

Kate: I think it’s probably worth mentioning that I’m in a very expensive part of the country.

Kate: I was intimidated by how much information you need, which is why I was procrastinating. When was our roof last replaced? What’s our house made from? What’s the annual mileage on our cars? It helps to have copies of your current policies so you can make sure you’re getting the same coverage.

Erin: For sure. I actually used ChatGPT to help me identify gaps in my coverage.

Once I had numbers I felt comfortable with — which included an increase in dwelling coverage, as well as higher liability coverage on my home and cars — I sent them to the insurance brokers to get quotes and also a gut-check for my situation.

Kate: I also used ChatGPT, to narrow down which companies sell home, auto and umbrella policies, because not everyone sells an umbrella policy. It gave me a list, and then I told it I’m in New York and asked what companies people prefer here.

It helped me narrow my options to the companies that do the most business in my area. The best insurance company in Nebraska might not be the best option for me here in New York.

Kate: I would have kept better notes because I was a little scattered. I was not as organized as I could have been.

Erin: I would’ve done it sooner!

Kate: I was also surprised by how long it took. Give yourself time for this task, because all the back and forth takes a little while, and sometimes with brokers it takes a few days.

Erin: Totally. It takes time, and it’s not the most fun way to spend your time. Insurance is the least glamorous financial product I can think of. But I feel so much more secure having my coverage updated and ready to go. I hope I never have to use it, but I’m glad I have it. And saving money is just the cherry on top.

Kate: Bringing our homeowners insurance down does take a little bit of the sting out of how much our auto insurance went up for our new teen driver. We need to have all three drivers at our house take a defensive driving course so we can get that auto rate down a little. That will be our next task, I guess!

If it’s been a while since you evaluated your insurance coverage, now might be the time. To get started, set aside a few hours and gather your current insurance policy information.

Ask your agent if there are ways to save. There may be discounts available for things like raising your deductible or taking a defensive driving course. For some, bundling multiple insurance policies with one insurer could also save money, but keep in mind it’s not always the cheapest option.

Make it fun! Consider insurance shopping with a friend, or reward yourself with your favorite pastry after reaching out to an independent insurance broker.

About the authors

Kate Ashford is a writer and spokesperson for NerdWallet. She is a wealth management specialist (WMS)™ and certified senior advisor (CSA)® and has more than 20 years of experience writing about personal finance. Previously, she was a freelance writer for both consumer and business publications, and her work has been published by the BBC, Forbes, Money, AARP, LearnVest and Parents, among others. She has a degree from the University of Virginia and a master’s degree in journalism from Northwestern’s Medill School of Journalism. Kate has been quoted by outlets including the Associated Press, MarketWatch, NBC and Fortune. She is based in New York.

Erin El Issa writes data-driven studies across personal finance topics. She loves numbers and aims to demystify data sets to help consumers improve their financial lives. Before becoming a Nerd in 2014, she worked as a tax accountant and freelance personal finance writer. Erin’s work has been cited by The New York Times, CNBC, The Guardian, the “Today” show, Forbes and elsewhere. In her spare time, Erin reads and crochets voraciously and tries in vain to keep up with her two kids. She is based in Ann Arbor, Michigan.