Am I paying too much for insurance?

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Small Law Survivor
Posts: 293
Joined: Tue Nov 17, 2015 5:36 pm

Am I paying too much for insurance?

Post by Small Law Survivor » Wed Oct 18, 2017 5:54 pm

When I was working I was too busy/harassed to think about trying to reduce specific expenses. Now that I'm retired, I'm trying to go through some of them.

We live in Eastern Massachusetts. Our house is worth about $800,000. We have a 2007 Volvo and a 2012 Prius. Our net worth is around $5.8MM. Here are our insurance expenses. These are all with Chubb or Ace (which owns/is owned by Chubb and does auto):

Combined Policy: (total annual premium $4594)
Homeowners $3080
Umbrella ($10MM) $903
Valuables (a few items of jewelry) $611

Separate policy (both autos, $10,000 deductible): (total annual premium $1869)
Auto 1 (Volvo) $677
Auto 2 (Prius) $1192

I feel like I'm paying too much for insurance, but I don't have any basis for comparison. Maybe I am, maybe I'm not. Any opinions on this would be appreciated. Will provide further information as requested.

neilpilot
Posts: 1027
Joined: Fri Dec 04, 2015 1:46 pm
Location: Memphis area

Re: Am I paying too much for insurance?

Post by neilpilot » Wed Oct 18, 2017 6:27 pm

My opinion is you should contact an independent insurance broker for the answer. Most, if not all, comments you will get here are likely to provide comments on what they pay, based on a mismatch of your particular circumstances and local risk factors.

Jack FFR1846
Posts: 5749
Joined: Tue Dec 31, 2013 7:05 am

Re: Am I paying too much for insurance?

Post by Jack FFR1846 » Wed Oct 18, 2017 6:36 pm

Your premiums are really cheap. Mine are far higher in Hopkinton, which is in the second lowest risk category in the state, but I own 17 and 21 year old boys (only the 21 has a license). The cars look like liability only from the numbers you have.
Bogle: Smart Beta is stupid

gougou
Posts: 26
Joined: Thu Sep 28, 2017 7:42 pm
Location: San Francisco Bay Area

Re: Am I paying too much for insurance?

Post by gougou » Wed Oct 18, 2017 8:36 pm

Your home insurance looks really expensive. We are with Farmers insurance and here are our numbers:

Home Insurance:
$1.2M house, $550K replacement cost, $2500 deductible
$578.07/year

Auto Insurance (We are 27, 28 years old):
Tesla model S 75 and Porsche Macan S combined, 500K/500K/100K, $2500 deductible
$3267.60/year

Umbrella:
$1M coverage
$237.00/year

boglerdude
Posts: 447
Joined: Fri Jul 10, 2015 1:28 am

Re: Am I paying too much for insurance?

Post by boglerdude » Wed Oct 18, 2017 9:14 pm

The good news is you can afford it :)

Chubb, USAA, and Amica have the best reputations.

PURE is a new player in the high end space.

There's no substitute for checking with every insurer, every year or two, if you want the lowest rates.

JBTX
Posts: 1522
Joined: Wed Jul 26, 2017 12:46 pm

Re: Am I paying too much for insurance?

Post by JBTX » Thu Oct 19, 2017 12:02 am

Hard for me to really compare, as I live in TX, but here goes:
Small Law Survivor wrote:
Wed Oct 18, 2017 5:54 pm
When I was working I was too busy/harassed to think about trying to reduce specific expenses. Now that I'm retired, I'm trying to go through some of them.

We live in Eastern Massachusetts. Our house is worth about $800,000. We have a 2007 Volvo and a 2012 Prius. Our net worth is around $5.8MM. Here are our insurance expenses. These are all with Chubb or Ace (which owns/is owned by Chubb and does auto):

Combined Policy: (total annual premium $4594)
Homeowners $3080 - For an $800K house that doesn't seem that bad. We pay almost half that for $300k house.
Umbrella ($10MM) $903 - Way more than we have, but for that amount, seems in line.
Valuables (a few items of jewelry) $611 - no idea, don't have any. Dropped policy on my wife's engagement ring many years ago. Given your financial situation not sure why you'd need this, but perhaps its worth the piece of mind if you have some seriously expensive jewelry (well into 5 figures)

Separate policy (both autos, $10,000 deductible): (total annual premium $1869)
Auto 1 (Volvo) $677
Auto 2 (Prius) $1192

This seems kind of high. We are more like $1200 per year, with $1000 deductible, but increased liability. But our cars are probably cheaper than yours, and you may be in higher COL area.

I feel like I'm paying too much for insurance, but I don't have any basis for comparison. Maybe I am, maybe I'm not. Any opinions on this would be appreciated. Will provide further information as requested.

JBTX
Posts: 1522
Joined: Wed Jul 26, 2017 12:46 pm

Re: Am I paying too much for insurance?

Post by JBTX » Thu Oct 19, 2017 12:05 am

gougou wrote:
Wed Oct 18, 2017 8:36 pm
Your home insurance looks really expensive. We are with Farmers insurance and here are our numbers:

Home Insurance:
$1.2M house, $550K replacement cost, $2500 deductible
$578.07/year
This really seems hard to believe.

What does $1.2M house, $550k replacement cost mean? It will only cost $550k to rebuild, so the value of your lot is basically $650K?

denovo
Posts: 3477
Joined: Sun Oct 13, 2013 1:04 pm

Re: Am I paying too much for insurance?

Post by denovo » Thu Oct 19, 2017 6:04 am

JBTX wrote:
Thu Oct 19, 2017 12:05 am
gougou wrote:
Wed Oct 18, 2017 8:36 pm
Your home insurance looks really expensive. We are with Farmers insurance and here are our numbers:

Home Insurance:
$1.2M house, $550K replacement cost, $2500 deductible
$578.07/year
This really seems hard to believe.

What does $1.2M house, $550k replacement cost mean? It will only cost $550k to rebuild, so the value of your lot is basically $650K?
His profile says he is in the Bay Area. Very believable.

denovo
Posts: 3477
Joined: Sun Oct 13, 2013 1:04 pm

Re: Am I paying too much for insurance?

Post by denovo » Thu Oct 19, 2017 6:13 am

neilpilot wrote:
Wed Oct 18, 2017 6:27 pm
My opinion is you should contact an independent insurance broker for the answer. Most, if not all, comments you will get here are likely to provide comments on what they pay, based on a mismatch of your particular circumstances and local risk factors.

First reply is the winner here. Both home and auto insurance premiums are highly personalized based on age of home, rebuild cost, claim history, zip code, last time roof was changed, etc , etc, dog ownership and for cars, same thing, claim history, tickets, accidents, age, zip code, yada yada.
Small Law Survivor wrote:
Wed Oct 18, 2017 5:54 pm


I feel like I'm paying too much for insurance, but I don't have any basis for comparison. Maybe I am, maybe I'm not. Any opinions on this would be appreciated. Will provide further information as requested.

Nobody can eyeball your numbers and tell you if you could can get a better deal. Only way you'll know is if you shop around. The only practical general advice I can give is that it pays to shop around once every 2 years, and it's really easy to get quotes online if you have the free time, no need for a broker.

1. Consider bundling policies, you usually get a good deal if you combine home + auto.

2. So you can shop apples to apples, figure out the exact coverage and deductibles you want, before shopping around. I guess you can easily afford high deductibles.

3. Anecdotally, my impression is that GEICO has the lowest premiums if you have a spotless record with no accidents or tickets. Taking an online defense driving course (55+ to be eligible) will also give you a discount.

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wander
Posts: 2313
Joined: Sat Oct 04, 2008 9:10 am

Re: Am I paying too much for insurance?

Post by wander » Thu Oct 19, 2017 7:33 am

Small Law Survivor wrote:
Wed Oct 18, 2017 5:54 pm

Separate policy (both autos, $10,000 deductible): (total annual premium $1869)
Auto 1 (Volvo) $677
Auto 2 (Prius) $1192
With $10,000 deductible, you can replace both cars altogether.

soccerrules
Posts: 166
Joined: Mon Nov 14, 2016 4:01 pm

Re: Am I paying too much for insurance?

Post by soccerrules » Thu Oct 19, 2017 8:23 am

I agree with shopping your insurance at least every 2-3 years.

I live in the South so I assume the rates will be at least slightly different. However, nothing jumped out to me to be out of line.

Auto might be a little high for 2 cars and experienced drivers, but I don't know what coverage you have. (collision ?, replacement coverage?)
Home seems to be OK, but don;t know deductible and coverage. We have a 1% value of house deductible in our state.
Umbrella - i don't have yet, but seems in line with other threads.

You are paying under $400/mo to cover everything you need and with a $5.8M NW - seems pretty reasonable.
Don't let your outflow exceed your income or your upkeep will be your downfall.

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dm200
Posts: 13716
Joined: Mon Feb 26, 2007 2:21 pm
Location: Washington DC area

Re: Am I paying too much for insurance?

Post by dm200 » Thu Oct 19, 2017 8:41 am

Small Law Survivor wrote:
Wed Oct 18, 2017 5:54 pm
When I was working I was too busy/harassed to think about trying to reduce specific expenses. Now that I'm retired, I'm trying to go through some of them.
We live in Eastern Massachusetts. Our house is worth about $800,000. We have a 2007 Volvo and a 2012 Prius. Our net worth is around $5.8MM. Here are our insurance expenses. These are all with Chubb or Ace (which owns/is owned by Chubb and does auto):
Combined Policy: (total annual premium $4594)
Homeowners $3080
Umbrella ($10MM) $903
Valuables (a few items of jewelry) $611
Separate policy (both autos, $10,000 deductible): (total annual premium $1869)
Auto 1 (Volvo) $677
Auto 2 (Prius) $1192
I feel like I'm paying too much for insurance, but I don't have any basis for comparison. Maybe I am, maybe I'm not. Any opinions on this would be appreciated. Will provide further information as requested.
What is the homeowners deductible? You might, possibly, investigate a higher deductible. Have you researched (check with insurer) that you are not overinsured for the home (replacement value)?

Might you consider dropping collision and comprehensive on the autos - given your assets?

Is the separate jewelry coverage needed?

JBTX
Posts: 1522
Joined: Wed Jul 26, 2017 12:46 pm

Re: Am I paying too much for insurance?

Post by JBTX » Thu Oct 19, 2017 8:49 am

denovo wrote:
Thu Oct 19, 2017 6:04 am
JBTX wrote:
Thu Oct 19, 2017 12:05 am
gougou wrote:
Wed Oct 18, 2017 8:36 pm
Your home insurance looks really expensive. We are with Farmers insurance and here are our numbers:

Home Insurance:
$1.2M house, $550K replacement cost, $2500 deductible
$578.07/year
This really seems hard to believe.

What does $1.2M house, $550k replacement cost mean? It will only cost $550k to rebuild, so the value of your lot is basically $650K?
His profile says he is in the Bay Area. Very believable.
I meant hard to believe in that the home insurance cost is so low?

JBTX
Posts: 1522
Joined: Wed Jul 26, 2017 12:46 pm

Re: Am I paying too much for insurance?

Post by JBTX » Thu Oct 19, 2017 9:04 am

denovo wrote:
Thu Oct 19, 2017 6:13 am
neilpilot wrote:
Wed Oct 18, 2017 6:27 pm
My opinion is you should contact an independent insurance broker for the answer. Most, if not all, comments you will get here are likely to provide comments on what they pay, based on a mismatch of your particular circumstances and local risk factors.

First reply is the winner here. Both home and auto insurance premiums are highly personalized based on age of home, rebuild cost, claim history, zip code, last time roof was changed, etc , etc, dog ownership and for cars, same thing, claim history, tickets, accidents, age, zip code, yada yada.
Small Law Survivor wrote:
Wed Oct 18, 2017 5:54 pm


I feel like I'm paying too much for insurance, but I don't have any basis for comparison. Maybe I am, maybe I'm not. Any opinions on this would be appreciated. Will provide further information as requested.

Nobody can eyeball your numbers and tell you if you could can get a better deal. Only way you'll know is if you shop around. The only practical general advice I can give is that it pays to shop around once every 2 years, and it's really easy to get quotes online if you have the free time, no need for a broker.

1. Consider bundling policies, you usually get a good deal if you combine home + auto.

2. So you can shop apples to apples, figure out the exact coverage and deductibles you want, before shopping around. I guess you can easily afford high deductibles.

3. Anecdotally, my impression is that GEICO has the lowest premiums if you have a spotless record with no accidents or tickets. Taking an online defense driving course (55+ to be eligible) will also give you a discount.
As to shopping around every 2 years and GEICO, I am becoming more of a believer in factoring in the claims follow through vs just evaluating rate. We could probably save a little money on our home insurance (Travelers) but we have had them for years and they have paid out about $25k to us over 7 years replacing 2 roofs due to hail. Their claims adjuster has always had very generous estimates, such that we can save on the actual work and almost cover the 2.0% deductible.

On the flip side i went to GEICO a few years ago to save money on auto. Their premiums have increased substantially and more importantly i have had to eat $1000 deductible in 2 occasions where I was hit standing still but other parties insurance would not pay (or uninsured ). There was a third case where a truck backed into me but I was able to recover from the other parties insurance but still had to do it all myself. In each case GEICO basically did nothing to pursue the other party. It was pretty much up to me. They were content to pay my damages and have me eat the deductible in 2 of the 3 cases.

Rupert
Posts: 2667
Joined: Fri Aug 17, 2012 12:01 pm

Re: Am I paying too much for insurance?

Post by Rupert » Thu Oct 19, 2017 9:18 am

JBTX wrote:
Thu Oct 19, 2017 8:49 am
denovo wrote:
Thu Oct 19, 2017 6:04 am
JBTX wrote:
Thu Oct 19, 2017 12:05 am
gougou wrote:
Wed Oct 18, 2017 8:36 pm
Your home insurance looks really expensive. We are with Farmers insurance and here are our numbers:

Home Insurance:
$1.2M house, $550K replacement cost, $2500 deductible
$578.07/year
This really seems hard to believe.

What does $1.2M house, $550k replacement cost mean? It will only cost $550k to rebuild, so the value of your lot is basically $650K?
His profile says he is in the Bay Area. Very believable.
I meant hard to believe in that the home insurance cost is so low?
I agree that's an extraordinarily low premium for an HO policy, but I bet it doesn't include earthquake coverage, which is the most likely cause of a total loss in the Bay Area. I wonder how much extra an earthquake policy costs the Bay Area poster? My HO premium would look cheap too if I excluded the cost of wind coverage from the premium, but I have to have wind coverage because that's the most likely cause of a total loss in the region where I live.

JBTX
Posts: 1522
Joined: Wed Jul 26, 2017 12:46 pm

Re: Am I paying too much for insurance?

Post by JBTX » Thu Oct 19, 2017 9:42 am

Rupert wrote:
Thu Oct 19, 2017 9:18 am
JBTX wrote:
Thu Oct 19, 2017 8:49 am
denovo wrote:
Thu Oct 19, 2017 6:04 am
JBTX wrote:
Thu Oct 19, 2017 12:05 am
gougou wrote:
Wed Oct 18, 2017 8:36 pm
Your home insurance looks really expensive. We are with Farmers insurance and here are our numbers:

Home Insurance:
$1.2M house, $550K replacement cost, $2500 deductible
$578.07/year
This really seems hard to believe.

What does $1.2M house, $550k replacement cost mean? It will only cost $550k to rebuild, so the value of your lot is basically $650K?
His profile says he is in the Bay Area. Very believable.
I meant hard to believe in that the home insurance cost is so low?
I agree that's an extraordinarily low premium for an HO policy, but I bet it doesn't include earthquake coverage, which is the most likely cause of a total loss in the Bay Area. I wonder how much extra an earthquake policy costs the Bay Area poster? My HO premium would look cheap too if I excluded the cost of wind coverage from the premium, but I have to have wind coverage because that's the most likely cause of a total loss in the region where I live.
From what I’ve read earthquake insurance is separate.

I thought wind coverage was standard to HO policies?

https://www.allstate.com/tools-and-reso ... amage.aspx

Rupert
Posts: 2667
Joined: Fri Aug 17, 2012 12:01 pm

Re: Am I paying too much for insurance?

Post by Rupert » Thu Oct 19, 2017 9:48 am

JBTX wrote:
Thu Oct 19, 2017 9:42 am
Rupert wrote:
Thu Oct 19, 2017 9:18 am
JBTX wrote:
Thu Oct 19, 2017 8:49 am
denovo wrote:
Thu Oct 19, 2017 6:04 am
JBTX wrote:
Thu Oct 19, 2017 12:05 am


This really seems hard to believe.

What does $1.2M house, $550k replacement cost mean? It will only cost $550k to rebuild, so the value of your lot is basically $650K?
His profile says he is in the Bay Area. Very believable.
I meant hard to believe in that the home insurance cost is so low?
I agree that's an extraordinarily low premium for an HO policy, but I bet it doesn't include earthquake coverage, which is the most likely cause of a total loss in the Bay Area. I wonder how much extra an earthquake policy costs the Bay Area poster? My HO premium would look cheap too if I excluded the cost of wind coverage from the premium, but I have to have wind coverage because that's the most likely cause of a total loss in the region where I live.
From what I’ve read earthquake insurance is separate.

I thought wind coverage was standard to HO policies?

https://www.allstate.com/tools-and-reso ... amage.aspx
Not standard in areas often affected by hurricanes. Many insurers, including Allstate, won't write wind policies at all in such areas. (This I know from experience because Allstate dropped my wind coverage after Hurricane Katrina and hasn't sold wind coverage here since). They'll sell you an other perils policy and help you buy wind coverage from the state wind pool or from a surplus line carrier. State Farm is the only big insurer that will still sell wind coverage as part of its normal HO policy in my region, but that coverage is a separate negotiation with a separate deductible.

gougou
Posts: 26
Joined: Thu Sep 28, 2017 7:42 pm
Location: San Francisco Bay Area

Re: Am I paying too much for insurance?

Post by gougou » Thu Oct 19, 2017 2:10 pm

Rupert wrote:
Thu Oct 19, 2017 9:18 am
JBTX wrote:
Thu Oct 19, 2017 8:49 am
denovo wrote:
Thu Oct 19, 2017 6:04 am
JBTX wrote:
Thu Oct 19, 2017 12:05 am
gougou wrote:
Wed Oct 18, 2017 8:36 pm
Your home insurance looks really expensive. We are with Farmers insurance and here are our numbers:

Home Insurance:
$1.2M house, $550K replacement cost, $2500 deductible
$578.07/year
This really seems hard to believe.

What does $1.2M house, $550k replacement cost mean? It will only cost $550k to rebuild, so the value of your lot is basically $650K?
His profile says he is in the Bay Area. Very believable.
I meant hard to believe in that the home insurance cost is so low?
I agree that's an extraordinarily low premium for an HO policy, but I bet it doesn't include earthquake coverage, which is the most likely cause of a total loss in the Bay Area. I wonder how much extra an earthquake policy costs the Bay Area poster? My HO premium would look cheap too if I excluded the cost of wind coverage from the premium, but I have to have wind coverage because that's the most likely cause of a total loss in the region where I live.
It doesn't include earthquake coverage. Earthquake coverage is expensive and I got quoted $1420/year for 5% deductible ($27500 deductible) and $526/year for 25% deductible ($137500 deductible). I think it's a waste of money. Most people don't buy it anyways and we'll just hope for a disaster relief if a huge earthquake happens.

The HO insurance quotes I got varied from $600 to $800. I was able to bundle my two auto insurance to get a discount on my HO insurance (so it's $578/year)

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JaneyLH
Posts: 322
Joined: Wed Oct 16, 2013 7:16 pm

Re: Am I paying too much for insurance?

Post by JaneyLH » Thu Oct 19, 2017 8:51 pm

+1 for dropping the jewelry rider. You can afford to replace the items.

+1 for skipping earthquake coverage. Unless you live in a turn of the century unreinforced brick building, chances are your home would not sustain sufficient damage to exceed the steep deductibles. Modern wood frame have sufficient flexibility to survive earthquakes with damaged chimneys and the like. Even mobile homes survived the Loma Prieta quake pretty well... my mom lived in one close to the epicenter and it just fell off its blocks. Jacked it up and re-connected broken plumbing for less than $1500. But people died in total collapses of historic brick buildings.

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