Find Cheaper Home Insurance By Comparing Across Major Providers and Insurance Portals

As is the case every year, I receive an escrow summary from my mortgage provider. An escrow is the funding account for the variable part of your mortgage payment that includes property taxes, home insurance and HOA fees in some cases.

The escrow amount is added to the fixed principal and interest of the monthly mortgage payment and is typically adjusted annually, as lenders review for overages or shortages. Federal law allows lenders to keep a cushion of up to two months’ total escrow payments.

But, as the homeowner you are ultimately responsible for all tax and home insurance payments. So you would do well to keep your eye on escrow payments, all of which should be on your monthly mortgage statement.

Home Insurance Surprise

My annual escrow summary stated that I owed an additional $94 to cover under-funding of the escrow account. Scrolling down the document I realized that during the year my home owners insurance had jumped from $520 to $721.

The increase in insurance was what caused my escrow account to become under funded. When I called my insurance company and asked them why my home insurance premium had increased they said that it was due to higher thefts (crimes) in the local area, cost of building materials (replacement costs) and general underwriting rate increases as interest rates/inflation rises.

The nationwide average annual premium for homeowners insurance is $1,398 today, as estimated by trade group Insurance Information Institute. The group says that from 2017 to 2020, premium rates were up 11.4% on average. That is higher than the nation’s 7.9% inflation rate during those years. The cost was up as much as 25% in parts of California and Florida.

WSJ

But my 38% premium rise is still pretty drastic, which prompted me to go online get some home insurance quotes from other providers. While I wasn’t able to find many quotes lower than what I was currently paying (which means rates are truly higher overall) I was able to find several companies which provided a much better renewal deal, with the same deductibles/replacement costs I currently had.

Finding Better and Cheaper Home Insurance

With a much better idea of home insurance premiums for my home after my online searches I called my home insurance provider (Allstate), with whom I have also bundled my auto insurance, and asked them again about the renewal premium increase and if they could make an adjustment. To their credit, they gave the same answer as previously stated and the agent said that they could not provide a lower rate for my home.

Even more surprisingly, they suggested other insurance companies to try and get a better home insurance quote. So I called them, who despite an excellent customer service agent, could not do much better than the higher renewal rate.

Unless I was willing to take a higher deductible or lower coverage it looks like I would end up paying higher home insurance premiums. Which would mean a higher monthly home payment to bank due to the higher escrow payment.

Home Insurance Portal Sites

Interestingly with my online research, I was surprised how many insurance portal sites now exist to find any type of home, auto or even life insurance. These portal sites are basically insurance quote aggregation providers that use the information you provide to find matching quotes across a number of primary insurers (like Geico, Allstate, Progressive etc) and up and coming insurance providers (Lemonade, Hippo etc).

These sites are however not insurance underwriters or insurance providers, and instead earn commissions from referrals they provides to insurance companies.

Insurance portal sites are a good place to start because they streamline the search process for you and provide a range of free quotes across providers. You can then use the quotes to negotiate with your current provider or go with one of the reputable companies that can hopefully meet your home insurance needs at a lower cost.

Getting a Lower Insurance Premium

Fortunately, I was able to find a home insurance policy with a 5% higher premium for the same deductible and coverage limits I had with my current policy. The Policy Genius’ insurance portal was the one found was the most useful, but lots of options out there.

I did call up Allstate to check if they would match, but were unable to do so. This made the decision to sign-up with my new provider easier, despite losing my multi-policy discount.

Now, I have to call my mortgage company to adjust my escrow account to reflect the lower premium! The whole process took about one hour, and the savings were well worth the time and effort.

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4 thoughts on “Find Cheaper Home Insurance By Comparing Across Major Providers and Insurance Portals”

  1. I would check your state insurance website. Michigan’s has the complaint ratio for insurance companies. If you have a big claim your insurance could make you miserable, ours has. Then savings is mute.

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  2. I too understand. Our home insurance practically doubled in 1 year. This caused the house note to jump 200.00 monthly. This was DEVASTATING to our budget. Assuming that such jumps could not happen and not reading the escrow sheets, we now found ourselves behind in monthly notes. What is frustrating that the mortgage CHANGEd due to nearly 100% increase in insurance with NO CLAIMS and only 1 year into the house we just bought. Somehow that seems so unfair. I also took too long to change companies – but we did change to Farmers. The charge is 1/2 of what the previous company charged. I learned some VERY EXPENSIVE LESSONS I thought there would be some more outrage in how EXTREME fluctuations in what people can charge in the name of home expense, and there appears little that can be done. Learn from my very expensive mistakes.

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  3. The other way to save is to raise Your Deductible on your current policy. Deductibles are the amount of money you have to pay toward a loss before your insurance company starts to pay a claim, according to the terms of your policy. The higher your deductible, the more money you can save on your premiums. Nowadays, most insurance companies recommend a deductible of at least $500. If you can afford to raise your deductible to $1,000, you may save as much as 25 percent. Remember, if you live in a disaster-prone area, your insurance policy may have a separate deductible for certain kinds of damage. If you live near the coast in the East, you may have a separate windstorm deductible; if you live in a state vulnerable to hail storms, you may have a separate deductible for hail; and if you live in an earthquake-prone area, your earthquake policy has a deductible.

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  4. I do a lot of work with different insurance companies and this is spot on. A lot of times people do put off searching for better deals with insurance.

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