This One Simple Move Saved Me $1,646 in 2023

No matter how safe a driver you are, it's likely your auto insurance rates increased substantially over the past year. According to the Bureau of Labor Statistics' Consumer Price Index, the cost of auto insurance shot up 19.2% between October 2022 and October 2023. That's a staggering number when you're an auto owner responsible for paying those premiums. However, sky-high insurance rates also provide an excellent reminder that we're only dating our insurance companies.

Free agent

I've always been ridiculously loyal to my insurance company, especially when I knew and liked our insurance agent. Just as rates were on the rise, we were in the middle of a move to a new state and I was preoccupied with all the move entailed. I took just enough time to do my research on the best insurance companies in our new state and to find a nearby agent. As a financial reporter, I knew auto rates were increasing, but convinced myself that it was solely due to the COVID-19 pandemic. And for some reason, optimism kidnapped my critical thinking skills and I decided that the rate hikes would be temporary.

That has not proven to be the case.

Motivation

When we moved, we traded a 3.25% mortgage interest rate for a 5.50% one, resulting in a mortgage payment 33% higher than the one we left. When, after less than a year, we received notice that our payment was increasing due to a hike in our homeowners insurance rate, I knew that it was time to trim the fat from the monthly budget.

It was easy to make small cuts, like canceling a subscription beauty box, streaming music channel, and one streaming video channel. But the big savings came from finally realizing that I'm not married to one particular insurance company, and it's okay to change.

I'm not going to lie; the process is harder for me than it might be for others. I felt bad for the agent we'd signed on with, although for the life of me, I don't know why. It's not as though we ever had any interactions with him. I think that I've become so accustomed to consumer fidelity that I forgot I don't have to be faithful -- especially when it's not in our best interest.

And so I went rogue.

Looking for a more affordable policy

Rate shopping involved checking The Ascent's list of the best auto insurers, as well as insurance company websites. It was ultimately a Progressive Insurance online quote that made it easy to switch. Some insurers' quotes were similar to what we were already paying, but the difference in cost for Progressive was dramatic enough to write home about. Here's where the quotes landed:

• Auto coverage: We were able to replace policies on three vehicles without reducing our coverage, and still saved $864 annually.
• Homeowners coverage: We increased coverage to include extended replacement cost, earthquake, and water backup, yet our premium dropped by $782 annually.

For us, Progressive was the winner, but the result might have been different if we lived in another state, or even in another city. The point is, I've learned that I only date my insurance company; I'm not married to it. When rates soar, shopping around can be a smart move, especially when the savings are significant enough to leave an extra $1,646 in our checking account at the end of the year.

There are a number of reasons why auto insurance (and homeowners) insurance rates have soared. We can blame the pandemic and resulting supply line shortages, increased repair costs, and environmental events that have cut insurance companies in some states to the bone. But if I hadn't bothered to find better coverage at a lower rate, I'd only have myself to blame.