Author Topic: Optimizing insurance  (Read 1326 times)

bender

  • 5 O'Clock Shadow
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Optimizing insurance
« on: March 26, 2017, 11:49:09 AM »
I'm trying to optimize my insurance, seeking any advice/tips.  Currently everything is with State Farm.  We are closing in on FI, so the main goal with insurance is to protect against catastrophic loss.  For mid-sized losses, we can take the risk or consider the cost/value of the insurance.  We've set our deductibles fairly high, but there is diminishing return in increasing them further.

Here's the current picture:
Car 1:  Maybe worth 15k.  Can be optimized by going to liability only, savings ~$250 annually.
  Mileage: About 9k per year
  Coverage:  Liability 100k/300k
  Coverage:  Collision+Comprehensive with $1000 Deductible
  Cost: ~$580

Car 2:  Older car, worth less than $5k.  Only need liability insurance.
  Mileage:  About 10k per year
  Coverage:  Liability 100k/300k
  Cost: ~$575 per year.   Higher than it should be due to a missing safe driver discount which is .  I had a small claim a few years back that I shouldn't have bothered with as I think at this point it would have been worth paying out of pocket.  Not sure if I can get this reduced yet.

Home: 
  Coverage: dwelling 350k, liability 500k.  Too many exclusions to list.  Hard to understand these policies!
  Deductible: $2k
  Annual Cost: $645

Umbrella:
  Considering getting an umbrella policy, but not sure.  It might be worth the extra piece of mind to protect assets.  Depends on cost I think.

Life:
  Have standard employer paid 2x policies.  Recently cancelled additional life insurance as we are close to FI.

Total insurance costs are currently about 1800 annually.

Note my auto policy statement states I have the right to request my policy be re-rated using a current credit-based insurance score.  Not sure exactly what this is, but it may help since.  Current credit scores are around 850.

Questions:
Worth it to save $250 and be responsible for my $15k vehicle?  (I'm strongly leaning towards saving the $250)
What coverage levels do I need for auto?
Should I do the credit-based insurance?

What coverage levels do I need for home?
Should I get an umbrella policy?

Any thoughts on how we're doing price-wise as is?  Overpaying or about right?
How can I get a better deal overall?
What companies should I check out?
Should I consider an independent agent?  How would I find a good one?

Any other advice/tips?

Thanks!

Smokystache

  • Bristles
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  • Posts: 381
Re: Optimizing insurance
« Reply #1 on: March 26, 2017, 12:03:17 PM »
I'm sure others will have more details, but I personally have my liability at 250/500. I can easily imagine a scenario (minivan full of kids) where the 300k limit is surpassed. It was my understanding that some insurers require 250/500 as part of adding an umbrella, but I could be wrong. I'm a fan of limiting insurance as much as possible, but the tiny extra for 250/500 seemed very reasonable to me.

Ocinfo

  • Bristles
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  • Posts: 313
Re: Optimizing insurance
« Reply #2 on: March 26, 2017, 12:08:09 PM »
I had been with State Farm for 15 years but officially moved over to GEICO on Friday for car insurance. I kept a landlord, renters, and an extra personal item insurance with State Farm.

The auto policy through GEICO was $244 per 6 months versus $622. Coverage is actually better, $500k across the board versus $300k. No idea why but State Farm kept raising rates despite no claims. My premium was more than what I was paying for a more expensive car when I was in my mid-20s. Current car is a nice but relatively inexpensive Jetta.

Shop around, you might be pleasantly surprised. Also, if you have great credit and claim history, odds are they'll insure you for a lot for only a few buck more.


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GizmoTX

  • Handlebar Stache
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  • Posts: 1444
Re: Optimizing insurance
« Reply #3 on: March 26, 2017, 12:19:36 PM »
Umbrella (liability) is relatively inexpensive & gives you lawsuit coverage above & beyond the auto, house, etc. You will have to check to see what the minimums on the other policies are to have umbrella, but you'd want them anyway. Of course, it depends on your net worth; if you have enough that you'd be a target, get umbrella as well.

We use State Farm & carry umbrella insurance along with large deductibles -- essentially we are using insurance for large catastrophic events & self paying anything else.

We use an independent agent for supplemental health & drug insurance (coordinates with Medicare, & is very confusing). No life insurance.

We're retired, but for younger employed people who are not yet FI, long term disability insurance is very important.