I’ve been writing about personal finances for years — for this site and others as a freelance writer — and I almost always take my own advice and the advice of experts I’m writing about. But when it comes to shopping for insurance, I’ve gotten lazy.
Almost every other piece of personal finance advice I’ve written about I’ve implemented myself: have an emergency fund, set up a college account for my daughter early, buy value stocks, cooking dinner at home and buying a used car with cash, among other things.
Shopping for insurance is one of the easiest things to do, taking minutes online or a five-minute phone call to an insurance agent. Up until about a month ago, the last time I went shopping for insurance was about a dozen years ago when my wife and I bought a house and needed homeowner’s insurance.
Insurers often offer bundled savings, so shopping for insurance for your home is often accompanied by a quote for auto insurance. You can save at least $100 per year by buying multiple policies from the same carrier for your cars and home.
An armored truck started it all
After more than 12 years of not shopping for insurance, what finally got me checking around for prices? Dissatisfaction with our insurance company. It all started when an armored truck made an illegal left turn and hit my wife’s car, totaling her car and soon starting us down the path of shopping for insurance.
I’ll make that story as brief as I can, but the end result was saving $350 on our annual premiums for home and auto insurance. That’s not a ton of money, I realize, but it’s enough of a savings to make the switch worthwhile. And I realize that someday our current insurer may disappoint us, which may again cause us to go shopping for insurance.
It’s now something I realize I should do annually. Loyalty to an insurer, I found out, isn’t a two-way street.
What led to me shopping for insurance
Luckily, nothing major has happened to our home, so the change in homeowner’s insurance wasn’t at the top of my mind when I went shopping for insurance after an unhappy tale from our insurer, Traveler’s. Still, the price from AAA for homeowner’s insurance was about $80 less per year, so the change was worthwhile.
What led to the change from Traveler’s to AAA was the number of times Traveler’s dropped the ball with our auto insurance claim. Here’s a quick recap of the balls they dropped:
- Telling us to go after the other insurer to reimburse us for a rental car. After the accident, our claims rep told us to get a rental car for up to two weeks so my wife could drive to work, and to send her the receipt. We rented a car for nine days. After weeks of back and forth with our insurer’s subrogation department and being told that Traveler’s would go after the other party’s insurer to reimburse us, the Traveler’s rep told us in an email that it was up to use to work with the other insurer to get that money. I called the claims rep and told them this was unacceptable, that Traveler’s should be working on our behalf. She called the subrogation rep, who later sent us a check for the rental car.
- Slow responses. A claims adjustor at Traveler’s told us to sign some papers and FedEx them back quickly so that a check for the totaled car’s value could be sent to us. We did, but Traveler’s response was incredibly slow. Almost two weeks went by before we received a check, a process the rep told us would take a few days. After I asked where the check was a week after sending them the documents they needed, they discovered that it hadn’t been sent yet but would arrive in a few days via FedEx. A week later, the check arrived.
- Inexperience. From the claims rep, to the adjustor, subrogation rep and even the sales rep, I felt like I was dealing with rookies. I often knew more than they did about the process, though I admit they were helpful in a lot of areas I didn’t understand. But all of them dropped the ball at some point, either giving me wrong information, conflicting information or an attitude that they didn’t care if I left for another insurer.
What went right
The good news is that in the end, Traveler’s came through with the rental car reimbursement, a fair payout for the totaled car, and the negligent party paid our deductible. It took awhile, but I ultimately felt that Traveler’s did what an insurer is supposed to do: Make you whole.
When you get in a car accident that’s not your fault, you’re still going to end up in the red financially. There’s no way around it. Auto insurance may give you enough money to buy a car comparable to the one you lost, but good luck finding one.
Easy switch of insurers
Switching insurers was as easy as a few phone calls. I could have compared prices online when shopping for insurance, but I called AAA because I’ve been a member of its auto club for all of my driving life and I’ve had insurance with AAA before.
I also went shopping for insurance the old fashioned way by stopping at my local AAA office and asking to speak to an insurance agent. I gave her our coverage letters from Traveler’s and after about 10 minutes of plugging numbers into her computer, we had a price quote for auto and home that was $350 cheaper for a year.
A few days later we decided to go with AAA and all we had to do was sign a few emailed documents and make some payments and we were set. Traveler’s required us to sign and mail back two forms before canceling our policies.
One Traveler’s saleswoman asked why we were changing our homeowner’s policy, which I told her was because we found a lower price elsewhere.
I later contacted Traveler’s to cancel our auto insurance, but they didn’t ask why. I suspect they already knew from my request a few weeks earlier to investigate why their subrogation department was asking us to go after the other driver’s insurer to get our money.
At the end of the day, I am happy that my wife was not injured, and we made the decision to switch to another company to save money. However, with the help of a car accident lawyer this situation would have run much smoother, without any need for me to have to contact as many people that I did. In addition, if any injuries would have incurred I would have made sure to connect with personal injury lawyers to get her compensated for any pain and suffering she may have experienced.
I always tell everyone to shop for insurance. Most people are paying way too much! Good job on shopping around.
Thanks. Shopping annually is the best idea, though not always the most fun with insurance. Still, it can be worth the savings.
It does seem like laziness is the key to losing money.
It’s tough because people get piles of mail, a never-ending stream of seeming junk that they have to throw money at every month or throw away. It’s so easy to get complacent and just write checks for what you’re supposed to, as quickly as possible, so that you can grab a beer and just relax for the evening.
But such laziness does indeed lead to throwing away money needlessly! Seems like people should pick each of their bills and give that bill a “work on it” week. During that week, take the time to look into what that bill is for and if there’s a way to lessen that cost (or eliminate it). Insurance would be one of those weeks.
That way even lazy people can conquer a money-saving task, one week at a time!
Great idea for the week of checking expenses! My goal is to do this annually with something like insurance that is often renewed each year, or to pick a random month to deal with others.
Shopping for an insurance is really important. And also, I really wanted to start setting up a college account for my daughter, she is already 8 year old now, I hope by next year I can start saving for her college education.
Setting up a college savings account is easy. We have a college savings account for our daughter, which I don’t allow to get in the way of retirement funding.
That experience of yours led you to shop around for insurance. Insurance is very important for every household that I personally would like to provide for my family so that if something happens I have something to depend on.