Step #2: Review Your Auto & Home Insurance

After years of coaching families, I know that one of the biggest budget busters any person can have is their auto and home insurance premiums. While this may not seem like a big deal to you, wasting money for no reason is one thing that will hold you back from building wealth. Frankly, you’re going to need EVERY PENNY working for you if you plan to become rich. That’s why this 2nd lesson is dedicated to helping you avoid wasting unnecessary money and finding the best insurance rates available.

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Shop Your Home & Auto Rates

I’m not sure what it is, but far too often I meet with people that are incredibly loyal to their insurance agents (to a fault). Just a few months ago I met someone that had been with her agent for 20 years! After reviewing her budget and seeing her insurance rates, I was floored. I had NEVER seen somebody pay so much for auto and home insurance! If memory serves me correctly she was paying $350/month for her car insurance alone — and that was on 1 vehicle!

After asking her if she had talked to her insurance company about the rate, she quickly said, “Well, my agent told me that since I was recently in an accident that this was the best that they could do…AND, he said that it was the best rate available on the market.”

The unfortunate part was that she believed him.

Well, I knew that the rate was astronomical, so I encouraged her to take 1-2 hours and contact a few different companies. Needless to say, that small amount of effort paid off and she ended up saving over $2,000/year on her insurance!

Did you know: if you save $50/month and start investing that money, you’ll have accumulated $75,000 after 30 years (assuming you average 8% ROI)?

Now, I’m not here to tell you that you’ll personally save money by shopping your auto and home insurance rates. But you’re not going to know until you take a few minutes to find out. From this day forward make it a habit to shop your insurance rates on an annual basis and never again be caught wasting money unnecessarily.

Auto Insurance Companies

Regardless of whether or not your insurance agent is your friend (or family member), take some time this week and shop rates YOURSELF between 4 or 5 different companies.

  • Geico - They’ve been around the industry for a long time and I’m sure you know their well marketed line, “15 minutes could save you 15% or more.”
  • Liberty Mutual – another very solid company.
  • US Insurance Online - this company is a broker, so after you complete their form they will take out most of the leg-work and shop a few different carriers for you! I’d definitely encourage you use them as one of your sources.
  • USAA – these guys are my favorite but they only offer their services to family’s with active duty members in the military OR one of your close relatives must have served. USAA is a non-profit company and I’ve yet to see anybody beat their rates.
  • AARP (via the Hartford) – this program has proven to save people money on their insurance but they serve the 50 and older market the best.
  • A few other great carriers you could contact are: Progressive, Allstate, State Farm, and Nationwide.

Home Owners or Renter’s Insurance

With many of the companies I listed above, you can ask them to price your home insurance rates as well, but here are more direct links to the specific spots on their websites that will help  you.

Take Action, Today!

You can’t be headed down the proper path to building wealth unless you have all of your ducks in a row, and one of those ducks is making sure you’re not throwing money down the toilet!

Heck, I’ve done the hard work for you…all you have to do is click on the websites, fill out the information, and sit back while people compete for your business!

So, take a few hours today or over the next week and shop your auto and home insurance rates.

Final Thoughts

Succeeding financially involves a lot of moving parts, and how well you manage them will ultimately determine your success in the end. While you should still be working on increasing your income, you also need to sure-up some loose ends to ensure you’re not wasting money when you could be using it to become rich by saving it, using it to pay down debt, or investing in your retirement.

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About the Author

By , on Mar 31, 2013
Andy Tenton
Andy is a 30-something New Yorker who turned his financial life around. He took charge of his finances, got out of debt, and is now working his way toward financial success. He is the publisher of WorkSaveLive.com.

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{4 Comments}

  1. Kelly says:

    This makes a lot of sense to reevaluate but I understand why people think its easier to just stick to their regular insurance companies. Saving money by shopping around is vital though. My car insurance was about $100 higher when I lived in Florida compared to now living in Massachusetts with the same company but it does make a big difference on monthly bills.

  2. Jose says:

    I would advise to do that on a regular basis! It seems that every time I have called my insurance company to question one thing or another on my bill, they found a way to cut it down some more!

  3. Absolutely true about agents not always having your best interests at heart, obviously. Very informative.

  4. I absolutely love USAA and have done business with them for almost 10 years.

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