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Earlier this year, the Federal Reserve lowered interest rates in response to the COVID-19 crisis, and mortgage rates quickly followed suit. My wife and I decided the time was right to join a large number of homeowners in locking in historically low interest rates. Then, we turned our attention to our homeowners insurance.
My original mortgage and homeowners insurance
When my wife and I bought our home in 2017, we signed up for a 30-year mortgage with a fixed 4.25% interest rate. That rate was very competitive at the time and we were happy with how the loan came together.
We also signed up for homeowners insurance, choosing a policy through Select Quote with Stillwater Insurance Group. Because we live in an earthquake-prone area in Southern California, we added on an earthquake insurance policy through Stillwater as well.
Our homeowners insurance and earthquake insurance, including some jewelry we have listed on the policy, was set to renew in March 2020 for $4,653 plus $30 in fees.
Lower interest rates led to refinancing during the pandemic
When the pandemic struck, we refinanced our mortgage loan with the same lender with a rate that was a full 1% lower. Instead of getting a new 30-year loan, we opted for a 25-year mortgage that would trim a few years off of our loan while lowering our monthly payment by about $40 per month.
Refinancing a mortgage is less work than buying a new home with a loan, but there's still plenty of paperwork involved in getting approved. I had to pull up our insurance papers to send in for the refinancing, and I took some time to read the policies while getting them ready for the mortgage.
I thought I should check around and see if I could save money with a new insurance company. After a poor claim experience left me unhappy with Stillwater, I definitely wasn't motivated to stay where I was.
Shopping around for homeowners insurance saved me money
I searched around and went back to some of my own insurance reviews to shop around for new rates. I decided to try out Policygenius myself, as I'd read about it but never used the service. I put my own home security in their hands and applied for new insurance at the Policygenius website.
Policygenius came back with a money-saving offer for my home and earthquake policies through two different insurers.
My main homeowners insurance is now issued by Hippo Insurance Services and backed by Topa Insurance Company. At the same time, I decided to increase coverage on my home by $100,000. This policy came out to $1,305 per year and didn't include the jewelry we insured with the old home policy.
Our new earthquake policy is issued by Palomar Specialty Insurance Company and has an annual premium of $2,772 plus a $35 policy fee.
While I was busy redoing my insurance, I also shopped around for jewelry-specific insurance coverage to see if we could save money there. It turned out we could! A new policy from Jewelers Mutual Insurance Group cost us a little bit less compared to including it in our homeowners insurance, so I signed up for a dedicated jewelry insurance policy there that costs $532 per year.
Adding everything up, my new insurance costs are $4,644 per year. While that's only $39 less per year, it also includes an additional $100,000 of property coverage for my home. After seeing some neighbors struggle to rebuild after the Thomas Fire struck just up the street, the extra coverage helps me rest easier.
My experience with Policygenius
While I've visited the website and even met the CEO of Policygenius in the past, this was my first time trying it out as a customer. I was very impressed with the experience.
Part of the application process asked me to upload insurance documents from my current policies. Based on that, the site was able to find me something with similar coverage at a lower cost. That's a big win for my budget and saved me time compared to picking out each option individually.
I was so impressed that I tried out Policygenius again for my parents' home and auto insurance. This time, Policygenius came back and said the deal my parents have is better than anything they can offer, so we're better off sticking with that. Few companies turn you away because you can save money elsewhere.
It's never a bad time to save money on insurance
Unlike many services that lock you into annual contracts, you can usually cancel your insurance at any time and get a prorated refund on any prepayments. That means you can cancel your current insurance and get some money back if you find a cheaper deal elsewhere.
In a time when many American families are looking at ways to cut spending and improve savings, it's a great opportunity to shop around for insurance to see if you can save. After all, every dollar counts!
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