Auto & Home Insurance Savings Question

[bkbarker35]

Currently I pay $1,190 per year for my home and auto insurance.  I will be dropping one vehicle shortly, so that should go down more, but that's not the point I'm getting at here. 

I've been shopping around recently for insurance and I think the best deal I found was with Amica.  For the year, it would be $1,080 for home and auto, so $110 cheaper per year than I currently have.  This discount would obviously be immediate.

With American National(current insurer) it is $1,190 per year.  However, after 3 years without any claims they give a kickback check of 3 months worth of premiums.  This would be a check for about $297.48 per year as long as I don't have claims, effectively making my new yearly premium $892.52.  I just recently switched to them and have 2.5 years left until my first kickback check. 

So the question is:  do I switch to Amica and immediately start saving $110 guaranteed?  Or do I hold out for 2.5 years, hoping to be claim free, to save $77.48 more per year?  Thanks for any tips.

[redcedar]

Amica is a mutual insurance company paying annual dividends to members on certain policies based on state insurances laws or requirements. Does your Amica amounts include these dividends?

[bkbarker35]

I checked with the agent I've been working with.  With dividend quotes you pay a little more in premiums up front, but receive more in dividends.  With dividend quotes, the total for the year for both home and auto comes out to $1,029.25 as opposed to the $1,080.  The only thing is, the dividends come in a check at the end of the year.

If I am trying to put every bit extra towards my student loans right now, is it worth saving the $50 a year by going with higher premiums?  Or am I better off paying more overall, but having more to put towards my student loans each month?

[redcedar]

One more question - does the 3 month rebate after 3 years happen every year after the third year or truly every 3 years.

Now I like to think of rebates like this as applying in the year in which you receive it. So Amica is $110 cheaper for year 1 and 2 (ignoring 6 month timing difference for simplicity). American National is $77 cheaper in year 3 and beyond (assuming you get the rebate each year). It will take until year 5 to break even.

Insurance rates should be shopped every 3-4 years, especially if you have changing needs like you loved, bought a house, have a teenage driver, etc. So before year 5, you may find that someone other than Amica or American National is best at that time.

With all,of that in mind, I would go with Amica now.