Getting an Insurance Checkup

Have you checked pricing for your homeowner’s and auto insurance lately? If you haven’t, you probably should.

George Fontaine, one of the guys in my business group, is an insurance broker. Every week when we each give a five-minute pitch, he tells us he can save us money on our house and car insurance. So…naturally, when The Hartford’s bill for the homeowner’s policy arrived this month bearing a $50 increase to $848 (on top of the $1125 I’m paying for the car and the umbrella policy), I gave him a call.

He thought about it for a couple of days and then called back with some quotes. By moving from The Hartford to Safeco, I can save $506 a year AND get better coverage!

Wow. I knew those AARP policies, much touted for being the best deal on earth, aren’t always the most cost-effective or even the best insurance—their Medigap policies, for example, are substantially higher than identical coverage from other highly rated insurers. But good grief.

The Hartford was selling me $500,000 worth of umbrella coverage; Safeco’s costs less and gives me a million bucks worth. The Hartford’s personal injury coverage was less, and it didn’t include rental for a car should mine be rendered undriveable. Nor did it include roadside service—you have to buy that separately from AARP, and it ain’t very good. The new homeowner’s policy increases the amount needed to rebuild my house, should it ever burn down or be blown away, and it provides for replacement of furnishings (at what I paid for the stuff, not at depreciated prices that will buy me stuff from Goodwill). Should the palace ever have to be rebuilt, the Safeco policy provides not the usual few months but two years of temporary housing.

If that doesn’t accommodate Contractor Standard Time, nothing will. ;-)

So, for a lot more coverage I’m paying a lot less money. Since I self-escrow the amounts needed for annual insurance and tax bills, in theory that $506 should put $42 back in my pocket.

In theory.

However, the Medigap policy went up by $235 this year.

Can you imagine? A two hundred thirty-five dollar increase! For something you can’t get out of. Did I get a $235 increase in Social Security? Well, yes…more like $420, actually. That’s $35 a month, which I happen to need desperately to make ends meet.

So the wonderful $506 savings will be much reduced by the health insurance bite. However, all is not lost:

Overall, then, I end up with an extra $23 a month that will NOT have to be transferred from cash flow to tax & insurance savings—reducing the monthly transfer from $445 to $422 a month.

Damn…what I couldn’t do with that $445 a month in spending money….imagine the groceries I could buy! Ohhhh well… At least I’m not having to choke up an extra $24, for a total monthly self-escrow of $479 a month, as would have been the case if I hadn’t asked George to look into this.

There’s no way I could have found this pricing on my own. For one thing, my days are chuckablock full. Trying to break loose several hours to get on the punch-a-button merry-go-round, get estimates for policies that don’t really cover the same things, and try to figure out which apples and oranges are what—just beyond the pale. That’s why I’ve stayed with the Hartford for lo these many years as they’ve slowly pushed up the rate until I can no longer afford it: hassle factor.

Well. That and their excellent service…couldn’t have asked for any better service after the late, great hailstorm misadventure.

It’s very convenient to go with an agent who has all the figures at his fingertips and knows how the system works. Not only does he have a good feel for what policies should cost and for what coverage is and is not needed, he will automatically review coverage every two years and will run interference with a company if you run into any headaches.

If you don’t have time to call a half-dozen companies and then try to figure out what coverage they’re offering and how it compares with five other policies each of which is slightly different, you really should consider finding a broker who can do the work for you. Google “insurance broker” in your area; then google the brokerage’s name with “reviews” added to seek customer comments. Or subscribe to Angie’s list and do your search there. Or ask your friends, lawyer, realtor, accountant, or money manager for references.

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George Fontaine April 17, 2012 at 11:41 am

Happy to help :)

Evan April 23, 2012 at 11:57 am

That’s great! I always struggle with what to farm out to a professional and what can I do on my own. I have wanted to reevaluate my insurance a while but since we have an upcoming move it just seems like a hassle and a credit score hit I don’t need right now.

You forgot the added benefit of creating a mutually beneficial relationship!

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