No one likes shopping for home or auto insurance. Here are tips to make saving less onerous - Star Tribune

Jay Schleicher has seen his fair share of insurance claims during his career as an agent.

Like when a renter fluffed a blanket and tore down a ceiling sprinkler, flooding their townhome unit with $40,000 in water damage. Or when a homeowner came back from vacation to a wet, stinky basement thanks to a backed-up sewer drain. Earlier this month, someone drove through a yard and hit a client's house.

People buy insurance for their home, car, RV or motorcycle because the law requires it. Then they forget about it until something bad happens, Schleicher said.

"'I bought this online awhile ago,' and then they don't know what they have for coverage," said Schleicher, owner of BlueJay Insurance Agency in Minneapolis. "People don't want to talk about [insurance] or think about it, but this is something that you are paying for for many, many years."

Shopping around for insurance has always been essential to make sure you find the best deal and have the right coverage for unexpected emergencies. But as the costs to repair and replace possessions continue to rise — and the prevalence of extreme weather also increases — choosing an insurance carrier and coverage has become an even more important decision.

"The last time you want to find out what your coverage is is when you are submitting a claim," said Grace Arnold, commissioner of the Minnesota Department of Commerce. "It's not always pleasant to think about all the bad things that might happen to you or your property, but it's really important to be prepared and insurance is a way to help you to be prepared."

Here's your guide to shopping for the best insurance for your budget and needs.

Rising costs

You likely have started to notice your insurance premiums rising in the past year. The U.S. Bureau of Labor Statistics reported the price of car insurance increased in March by more than 22% compared to one year ago, the largest annual jump since 1976.

Home insurance has also shot up as insurance companies try to recoup their losses from higher repair costs and extreme weather claims. Minnesota's average annual premium for home insurance is $2,476 a year for a home with a dwelling coverage amount of $300,000, according to a report Bankrate released this month. That's $323 more than the national average.

Minnesota has the second-most extreme weather of any state in the nation, trailing only California, according to the Insurance Federation of Minnesota. Since 1980, Minnesota has experienced about 60 weather disasters — from hail to floods to tornadoes — that have caused an estimated $20 to $50 billion in damages.

"That means more losses that we are paying out," said Aaron Cocking, president of the Insurance Federation of Minnesota.

Cocking said in some other states like Florida and California, there are signs of "insurance deserts" with some insurers leaving areas because of the rising costs of natural disasters.

Present your best

Since last summer, insurance companies in Minnesota have been stricter with their underwriting as they try to limit their losses, said Tom Wertish founder of Chaska-based Options Insurance agency.

Now insurance companies want to inspect houses within the first 60 days of policy signing. Even before inspection, agents check street views and property sites to gather data on homes.

So make sure your home, especially the outside, looks well maintained, almost as if you were listing it for sale, Wertish said. Trim trees that look like they could be overhanging near the house, he said.

Bundling several policies also makes you a better candidate, Wertish said, since currently, insurance companies won't want to take on a customer for just one home insurance policy by itself.

Check for updates

Update your insurance coverage after major life events, like marriage, Schleicher said. But also check it every three to five years, especially if you've had negative dings on your policy like a speeding ticket or accident. Such incidents could impact the price of your policy for years to come.

Let your insurer know of any major renovations to your home so you can increase your coverage. Renovations could also give you a discount if you updated big-ticket items like a roof or furnace.

You can change your insurance at any time. You can also do a quick review of your policy during your 30 to 60-day renewal period before your policy automatically renews.

"That's your time to start think about, 'Do I want to go and look at options in the marketplace today?'" Wertish said.

Take inventory

Assess the valuables inside your house. If you have expensive items, such as jewelry or art, you might want to add a rider for extra coverage.

"If you would have to think about how you would replace something — like the cost is high enough you would have to say, 'We're going to have to figure out how to replace that' — then you should know that it's covered in your policy or decide that it's not covered, and you are going to take on that risk," Arnold said.

It is a good idea to take photos or video footage of possessions for documentation. And store those off-site (or in the cloud) so you have them no matter what happens to your home.

Discount watching

Last year, the Minnesota state legislature passed a law that any roofs built to the fortified standard (using reinforced materials and/or additional structural elements) should come with a discount because it reduces the likelihood your roof will incur storm damage.

Discounts are available for a range of items including security systems. Drivers age 55 and older who take a defensive driving course can qualify for a special discount. Minors who have a high enough GPA can also qualify for a good student discount on their family's auto insurance.

Bundling policies like home and auto with one insurer qualifies people for discounts as well.

High deductible, low coverage

Insurance policies are all about protecting someone from the risk of something bad happening, but you can decide what level of risk you can tolerate.

You can make your deductibles higher so your insurance rate is lower but your out-of-pocket costs are more. Think about how often you might need to file a claim and if you have savings to cover more expenses in the event of a claim.

Cut some of the extras if you want to save money. Maybe you save $30 on the additional roadside assistance and call a tow company directly if you need help, Schleicher said. If you want to save money on your homeowner policy and are open to taking the risk, you can find a separate and higher wind and hail deductible so you would pay more out of pocket if you filed a claim for repairs for that damage, Wertish said.

"The calculation is always what's the risk versus the return to you," he said.

Seek help

Independent brokers like Wertish and Schleicher can connect clients with policies from different insurers and help select the best policy. There are also captive agents that work for particular insurance companies like State Farm or Allstate. The Insurance Federation of Minnesota offers an insurance helpline to answer insurance questions. The Department of Commerce has a Commerce Consumer Service Center to help with insurance claims after a disaster.

Also keep in mind when you might not need insurance. Renters' insurance for college students could be in the parents' policy already, depending on the circumstances. Your auto insurance might already cover the liability insurance of a towed camper. Or your home insurance might if you've parked it on your property, but once it's in a park, you will likely need separate RV insurance.

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