Smart Money Podcast: Money Saving Tips On Car & Home Insurance, plus Budgeting for Conventions and Hobbies at Comic Con

Welcome to NerdWallet’s Smart Money podcast, where we answer your real-world money questions. In this episode:

Get budgeting tips for conventions and cosplay straight from New York Comic Con, then learn about car and home insurance.

This Week in Your Money: Having just returned from New York Comic Con, host Sean Pyles discusses what he learned about budgeting for conventions, hobbies and cosplay outfits. He also shares an interview with Kayden Phoenix, a Los Angeles-based comic book writer known for her Latina superheroes. Kayden shares her experiences attending Comic Con and other conventions, including the costs associated with attending such events and how she has managed to minimize expenses for her business. Following their interview, Sean highlights the strong sense of community and shares his overall impressions of the event.

Today’s Money Question: Insurance Nerd Ryan Brady joins Sean to help answer a listener’s question about car and home insurance, breaking down important elements to consider and what different coverages mean and how to save money in the process. He first explains the different types of car insurance, including liability insurance, comprehensive and collision insurance, and uninsured and underinsured motorist coverage. He and Sean also discuss how to save money on car insurance by shopping around, asking about discounts, and raising deductibles. Ryan then moves on to home insurance and explains the different types of coverage, including dwelling coverage, personal property insurance, personal liability coverage, and loss of use coverage. He discusses the importance of insuring your home and the risks of not having insurance or being underinsured. The Nerds also provide tips for shopping for home insurance, such as comparing quotes and considering the coverage limits.

Check out this episode on your favorite podcast platform, including:

• Apple Podcasts

• Spotify

NerdWallet stories related to this episode:

Car Insurance Renewal: What It Is and How It Works

Car Insurance Agents: What They Do and How to Find One Near You

How to Get Home Insurance Discounts

Have a money question? Text or call us at 901-730-6373. Or you can email us at [email protected]. To hear previous episodes, go to the podcast homepage.

Episode transcript

Sean Pyles: Finding the right car and home insurance policies can help save you a lot of money each month. But shopping for insurance can be confusing and boring. So, this episode, we'll help you understand how to choose the best insurance for your needs. Welcome to NerdWallet's Smart Money Podcast, where you send us your money questions and we answer them with the help of our genius Nerds. I'm Sean Pyles.

Sara Rathner: And I'm Sara Rathner, and I'm back from my maternity leave. What's up everybody?

Sean Pyles: Hey. Welcome back, Sara.

Sara Rathner: Thank you. I'm here, I had a legitimate human baby. And then I was gone for a while to spend time with that legitimate human baby, and now I am working again.

Sean Pyles: Well, I'm so happy to have you back with me on Smart Money.

Sara Rathner: I'm glad to be back, and I'm ready for your money questions everyone, so send them our way. You can email a voice memo of your money question to [email protected], or leave a voicemail on the Nerd hotline at (901) 730-6373. That's (901) 730-NERD. If you prefer written communication, you can text your questions to the Nerd hotline or write an email to [email protected].

Sean Pyles: This episode, we're going deep into insurance, both car and home insurance, to help you know how much coverage you need or don't need. But first we are going to Comic Con.

Sara Rathner: Did you do cosplay?

Sean Pyles: No, I didn't do any cosplay unless you consider me being a podcast host as a form of cosplay.

Sara Rathner: Well, I guess that's something you already have experience in. So, what were you doing at Comic Con? Was this the big one in San Diego? And follow-up question, why was the host of a money show covering a comic convention?

Sean Pyles: So first of all, I was at the New York City Comic Con. I was there to talk with people about the financial aspects of fandom, and record a bunch of social media content about it. So, folks should check out the videos on my social media channels. I'm @SeanPyles_NerdWallet on Instagram and TikTok. If you go to my channels, you'll see me talking with a lot of people in some very impressive costumes.

Sara Rathner: But what people will not see is you in an impressive costume. That's a shame. That's a real missed opportunity, Sean.

Sean Pyles: I know. I was there with some journalistic pursuits and I figured that being dressed up in a strange costume might be a little bit distracting and maybe blur the lines between interviewer and subject, because Sara, I'm trying to keep it professional here, okay?

Sara Rathner: All right, fair enough. Maybe next time you could do a little embedded journalism and go a little deeper, but for your first go around it's totally fine to keep it separate. I would want to know though, if you did wear a costume what would you want to be?

Sean Pyles: So, I would probably be the prince from Katamari Damacy, which is my favorite video game. He is a little green guy with a big cylindrical head, and he rolls around the planet collecting junk to make stars.

Sara Rathner: All right. Well, I have no costume idea to counter that with at all because that's just not my thing. I'm really bad at costumes.

Sean Pyles: That's fair.

Sara Rathner: Yeah, it's not a thing that I excel in and that's okay. I know that about myself and I accept it. So, tell us about the trip and who you talked with.

Sean Pyles: The trip was a total whirlwind. I mean, first of all the convention itself was massive. There were thousands of attendees in all varieties of cosplay. There was a very sultry Pennywise, and there was also a guy who is a hybrid of a Sith Lord from Star Wars, and the Witch King from Lord of the Rings. So, deep cut nerdom for all of the people listening to this podcast. And I talked with dozens of people on the floor, people in elaborate costumes, people who were there to scoop up as much merchandise as possible, and also some industry insiders who gave me the scoop on the current state of comic book publishing. They each had their own story about the intersection of finance and fandom, including how they budget for these events, ways to save money at Comic Cons, and also opportunities to make money from these events.

Sara Rathner: Did anyone stand out?

Sean Pyles: Yeah, I talked for a while with Kayden Phoenix, a comic book writer based in Los Angeles. I met up with Kayden at the booth where they were selling their comic books about Latina superheroes.

Sara Rathner: Oh, I love that because I'm half Cuban and I'm from Miami, like one of the characters in those comics. So, I think it's really awesome that Kayden's helping readers see their own stories, which it's so fun.

Sean Pyles: Yeah. Kayden's universe of superheroes, A La Brava, centers female and queer narratives in a way that you just don't typically see in comics, which was really cool. She had all of her books spread out on the table and they have titles like Jalisco, Bandita, and Santa. Here's some audio from our conversation.

Tell me about what we're seeing at your booth here.

Kayden Phoenix: I have so many books. I have pins, I have stickers, and shirts and whatnot. But I have my Latino superheroes, A La Brava, first Latina superhero team in comic book history, first Latina and Native princess team called The Majestics as well.

Sean Pyles: And how much do these books sell for?

Kayden Phoenix: They sell for $15 each.

Sean Pyles: Okay, and what about the pins and stickers?

Kayden Phoenix: Pins are $10 each, stickers are $2 or buy three and it's $5.

Sean Pyles: And talk with me about how you got into comics in the first place.

Kayden Phoenix: I accidentally fell into comics, but it's okay. I come from screenwriting, independent screenwriting. I wrote out a feature length screenplay called Jalisco. It's my first Latino superhero, and it's really just I was like, "If I can see a big movie, a movie on the big screen, what would it be?" And my first thought was Latino superhero, and that's it. So, I wrote out the script and the screenplay, I shot a short film because I also direct, I did my pitch deck, and everyone I showed it to said, "This should be a comic." And so I was like, "Okay." And I pivoted into comics.

Sean Pyles: So, you wanted to bring your perspective to the world of comics because you didn't see that previously.

Kayden Phoenix: We don't have our perspective literally in any form of media.

Sean Pyles: You're also a queer woman, right?

Kayden Phoenix: I am, yes.

Sean Pyles: And so, considering your background, talk with me about how you being a woman, a queer woman, a Chicana woman in this space influences how you interact with New York Comic Con as a business owner.

Kayden Phoenix: It's been very well received. I'm very fortunate. I've been having a lot of press, I just have a lot of people coming up, new people who never heard of me, return customers. This is my second year at New York Comic Con. And so, I'm just really fortunate that I can be here, that I'm lucky enough to be even allowed to come here because it’s so hard to get in itself, but I've had a great time.

Sean Pyles: Well, talk with me about some numbers here. How much do you expect to make over the course of this weekend?

Kayden Phoenix: I'm hoping for 7K again.

Sean Pyles: $7,000 again. So, you made that last year?

Kayden Phoenix: I did, yes. And that's gross, definitely not net.

Sean Pyles: Yes, gross. So, let's talk about some of the expenses that go into this. You have to bring all of these books out here from where you live in Los Angeles. How much does that cost?

Kayden Phoenix: It's a bunch, it's a lot of books. I dwindled down a little bit, but I have more books now at the same time. But I brought one box of each book, every box is $25 roughly. I ship it to the hotel, so I got to pay them a little bit. It's just obviously the hotel costs as well, food-

Sean Pyles: Flying out here?

Kayden Phoenix: Flying out is horrible. It's just all the little extra things, the table itself. So, it all adds up. The taxi drives from airport into town.

Sean Pyles: So net, what do you think you'll be bringing home after this?

Kayden Phoenix: That's actually not too bad. I've dwindled it down, I'm trying to be tight on it. Little allowances on food as well because they have great food here, and that's going to be roughly $5,500.

Sean Pyles: Speaking of how you minimize expenses, what are your tips for that when you're here as a business owner?

Kayden Phoenix: If you can, food is the main thing, you always need food and energy so if you can get food in L.A. or in Grocery Mart, it's cheaper than buying convention food. Or your food trucks outside. I paid $20 for a burrito yesterday.

Sean Pyles: It's a lot for a burrito, which probably costs them $2 in materials to make for you.

Kayden Phoenix: Yeah. I know it's great, but it's like it's $20 for a burrito that I can get anywhere.

Sean Pyles: So, you're bringing some granola bars maybe, some fruit snacks-

Kayden Phoenix: Snacks, anything. At my hotel we have breakfast, so I bring my bananas, my apples, little things that I can save a little bit here and there.

Sean Pyles: So, thinking back on your experience running this business so far, you started this in 2020, correct?

Kayden Phoenix: Yes.

Sean Pyles: What do you wish you knew back then about running this kind of business that you do know now?

Kayden Phoenix: I don't know, I think I come from business. I'm going to say not that I knew it all already, but it's fun. Just take the bigger chances, I guess. I only go to the big cons nowadays, and the medium ones I'm invited to, which is nice so I don't pay for those. I don't do any local ones unless it is free.

Sean Pyles: It needs to be worth the money, and the time, and the effort.

Kayden Phoenix: Absolutely. It has to equate, you have to get profit at the end of the day.

Sean Pyles: What advice would you have for other creators looking to start a similar business to yours?

Kayden Phoenix: Pretty much do the research, learn business, business is extremely important. Marketing, sales, accounting a little bit as well. But it needs to make sense for you, and then also do the research like I was saying in regards to your industry. Know about what's your favorite comic book and why, know what the best comic book is that ever sold. Why does everyone love Alan Moore's stories? And it's the truth, it's subjective but overall at the end of the day he knows what sells.

Sean Pyles: And you work with many collaborators. You have an illustrator who does your

artwork for you. Can you talk about that process and how that's shaped your business too?

Kayden Phoenix: I'm really fortunate I got really amazing artists that I can afford within my price bracket. I try to keep the same ones to keep the same tone within all my series of books, because then they're cohesive and eventually they all meet. All the superheroes, I have five origin stories, they all meet at the team one. So, they all have to have the same look, and same tone and feel, even though they're all separate artists.

Sara Rathner: So, Kayden comes away with $7,000 minus expenses, which isn't too shabby. What did you hear from other participants about the kind of money it takes to attend these conventions?

Sean Pyles: So, if you're going to a Comic Con, either as a regular attendee or a vendor, you can expect to spend hundreds, maybe even thousands of dollars on everything from tickets, to foods, to collectibles and other merch. It can be hard to reel yourself in from impulse shopping. That's something I struggled with when I was there.

Sara Rathner: Yeah. Was there anything that surprised you while you were there?

Sean Pyles: Yeah, I was really impressed by the huge range of costs that can go into cosplay. Some people I talked with spent maybe a hundred dollars on an outfit that looked incredible, others spent several thousand dollars on theirs. And truth be told, more money doesn't equal more impressive costumes. It's really all about being creative with the materials and the money that you have on hand.

Sara Rathner: Did you buy anything cool?

Sean Pyles: I don't know if people would call this cool, but I did buy a Tamagotchi.

Sara Rathner: Oh, they still make those?

Sean Pyles: Just for nostalgia's sake. Yes, they do. They are selling the original Tamagotchi, and I scooped one up and I'm hoping I can keep it alive for more than a day. Something I could not do when I was a child.

Sara Rathner: Well, if I remember correctly from being a child, they just come back to life if you accidentally neglect them.

Sean Pyles: Yes, until the battery dies and then it's garbage. Yeah.

Sara Rathner: So overall, what were your impressions from your very first trip to a Comic Con?

Sean Pyles: So, I'm a complete outsider to the world of Comic Con, and I was really blown away by all of the creativity, passion, and community on display at New York Comic Con. People were cheering each other on, they were trading tips for how to save money on their outfits, or how to save money while attending a con. And this might sound really weird, but it was a very beautiful, sweet sight to behold. I felt like I was joining a new community.

Sara Rathner: That sounds like such a joyful experience.

Sean Pyles: It was.

Sara Rathner: Well next time, and I'm sure there will be a next time now that you've been there once, I expect some cosplay from you, Sean.

Sean Pyles: Okay, I can do that for you, Sara.

Sara Rathner: All right. And better end up on social media too.

Sean Pyles: Definitely will. All right. Well, that's all for this episode’s This Week in Your Money segment. But before we move on, a couple of important housekeeping notes. First, a reminder that we are running another book giveaway sweepstakes ahead of our next Nerdy book club episode.

Sara Rathner: Next month we're speaking with Farnoosh Torabi, author of the book, A Healthy State of Panic, which is about learning to use your fear as a superpower and to make better decisions when it comes to your finances, career and life. To enter for a chance to win our book giveaway, send an email to [email protected] with the subject “book sweepstakes’ during the sweepstakes period. Entries must be received by 11:59 p.m. Pacific Time on November 29th. Include the following information: your first and last name, email address, zip code and phone number. For more information, visit our official sweepstakes rules page.

Sean Pyles: Also listener, think about the best thing that happened to you financially this year and then share it with us. We're putting together a special end of year episode about your financial wins. So, whether you paid off some debt or bought a house, we want to hear about it.

Sara Rathner: Leave us a voicemail of your money win on the Nerd hotline at 901-730-6373. That's 901-730-N-E-R-D. You can also text it to us there if you'd like, or you can email it to us [email protected]. The money question is up next, stay with us.

Sean Pyles: This episode's money question comes from a listener who wrote us an email. Here it is. "Can you break down what we need to know about car and home insurance, all the different coverages and what they mean?" So, to help us answer this listener's question on this episode of the podcast, I am joined by NerdWallet insurance writer Ryan Brady. Welcome to Smart Money, Ryan.

Ryan Brady: So good to be on, Sean, thank you very much for having me.

Sean Pyles: Great to have you, especially because insurance is such a complicated and annoying topic to deal with. So, I'm excited to have your insights to help make this a little more accessible for our listeners. So, let's start with auto insurance because it can be really complex and confusing to navigate. So, can you start by please breaking down different types of auto insurance?

Ryan Brady: Yeah, absolutely Sean. So you're right, insurance can be incredibly complex. And part of the reason why car insurance could feel so complicated is that there are lots of parts to it, as our listener alluded to. I like to compare insurance almost to an onion. There's lots of layers to it, and like onions are to a lot of dishes, insurance is actually really essential to your overall personal financial well being even if it makes you cry sometimes.

Sean Pyles: Is this onion reference also a Shrek reference?

Ryan Brady: Actually it is not, but I'm curious now. It's been a while since I've seen that one.

Sean Pyles: Ogres are like onions, they have layers. I may be butchering the quote, but that's a key part of the first movie that struck me as a child. So anyway, back to insurance having layers.

Ryan Brady: Yeah. So, liability insurance is actually a really great place to start, and that's because it's required by nearly all drivers in the U.S.

Sean Pyles: Okay. And so, what do you get with liability insurance?

Ryan Brady: As the name suggests, liability car insurance covers you when you're liable or responsible for other people's injuries or property damage that you cause with your car. Let's say you're driving and you get a text message. In that moment of distraction, you crash into a minivan. And let's say you total that minivan and two of its passengers have to go to the hospital, you're responsible to pay for all that. And this is where liability car insurance will step in and pay for those damages so that hopefully you don't have to.

Sean Pyles: All right, I noticed that you said hopefully there.

Ryan Brady: Yeah, I did. So, liability car insurance, it only pays up to the maximum amounts, or limits they call it, that's specified in your policy. So, if damage from an accident surpasses those limits, you're responsible to pay for the rest out of your own pocket. That's liability car insurance in a nutshell.

Sean Pyles: Okay. Well, now let's turn to comprehensive and collision insurance.

Ryan Brady: Yeah. So, these are two other types of car insurance that trip a lot of people up, and these often come as a package deal. And what they do is they pay to fix or replace your car after it's damaged even if the damage was your fault. So, if you crash into another car, or a guardrail, or a deer or whatever, your car is covered. It'll also pay for things like floods, riots, hit and runs, fallen objects, car theft and more. So, you just can't cause damage to your own car on purpose, that's called fraud and insurers frown on that sort of thing.

Sean Pyles: Yeah, they might sue you for that.

Ryan Brady: Yeah. And something I want our listeners to keep in mind is that collision and comprehensive coverage often come with a deductible, and a deductible is just the amount of money that you pay before your insurance kicks in for anything for repairs or replacement. And $500 is most common, but deductibles can stretch to $2,000 or higher. So, if you just have a minor scratch or dent, it's probably not worth filing a claim for.

Sean Pyles: All right. Well Ryan, what else should people know about comprehensive and collision insurance?

Ryan Brady: So, another thing to know is that insurance companies only pay up to the fair market value of your car. So, if you drive an older car and you have plenty of cash on hand to repair or replace it if you had to, you probably don't need collision or comprehensive insurance. After all, it wouldn't make much sense to have if you're paying more for the coverage in a year than your entire car is worth. But before our listeners go out there and try to drop collision and comprehensive insurance, they should know that lenders and lessors require you to have these coverages if you're financing or leasing your car.

Sean Pyles: Okay. Well, now let's turn to uninsured and underinsured motorist coverage. What's the deal with these?

Ryan Brady: Yeah, so this is another important coverage type. Again, these are usually a package deal and they pay you for medical expenses or damage to personal property caused by an at-fault driver who's uninsured or underinsured. So, you can kind of think of this as liability insurance but in reverse. And the things this coverage type pays for are fairly expansive. For example, it could pay for you or your passenger's medical bills, pain and suffering, and even lost wages. This applies whether you're hit while driving your car, riding in someone else's car, or if you're just walking on the sidewalk. It could even pay you for repairs if an uninsured or underinsured driver plows into your car or your house so long as your coverage includes property damage. And right now 20 states require drivers to have this coverage, but even if you don't technically need uninsured or underinsured motorist insurance, it's still worth looking into because there's a lot of uninsured drivers out there. The latest stat that I've seen is something like one in eight drivers across the U.S. doesn't have car insurance, and in a handful of states it's more like one in four. Yeah, it's a lot.

Sean Pyles: That's kind of scary.

Ryan Brady: It is. And that's not even mentioning underinsured drivers. So, think about everyone that's just got their state's minimum insurance requirements. So yeah, this insurance coverage can really come in handy in a pinch.

Sean Pyles: Good to keep in mind, okay. So, what questions do you think someone should ask themselves when they are trying to decide which type of car insurance is best for them?

Ryan Brady: Yeah, so everyone's personal and financial situations are going to be different, but outside of what your state requires you to have, some questions I would ask are can you afford to pay out of pocket if your car gets badly damaged or stolen? If not, you'd probably want to consider collision and comprehensive coverage if you don't already have that. Another question I ask is do you drive a lot? Are the roads where you drive busy? If so, the risk of getting into an accident is probably going to be higher so you might want higher liability limits and other coverage types, like uninsured or underinsured motorist coverage. Another question I'd ask is who's on your policy? Is it just you, or do you have young and inexperienced drivers in your policy? We all know teenagers aren't the best drivers in the world, so you may want to dial up your coverage if you have young drivers living with you.

Sean Pyles: Yeah, okay. So Ryan, you just did a great job explaining a few different types of car insurance and what people should be thinking about as they're shopping for car insurance, but I think the amount of information that we just went through outlines why it's so confusing to navigate. And so, that's why some people will actually hire licensed insurance agents or brokers to help them with this process. What do you think people should know about working with a licensed insurance agent or broker?

Ryan Brady: Yeah, so I think they could be a really valuable resource and can save you a lot of time shopping around for quotes. You just want to keep in mind that these people are often paid by commission. The best thing people could do when shopping for car insurance, whether they work with an agent or not, is really just to arm yourself with knowledge. And I'll put in a quick plug here if I can, that NerdWallet's got a really great article that summarizes the basic types of car insurance and what they pay for. So, I encourage our listeners to check that out as a jumping off point.

Sean Pyles: Okay. Well Ryan, I realize that some people might just want to buy the least expensive car insurance they can get, but that can sometimes be a risky decision. Can you discuss the pros and cons of going this route?

Ryan Brady: Yeah, so buying the cheapest car insurance possible can be incredibly risky, and here's why. You risk being underinsured. When you buy the cheapest car insurance, it basically means that you're buying your state's minimum requirements needed to drive, and those requirements could be quite low. For example, in Florida where I live, drivers must have a minimum of $10,000 in property damage liability insurance to drive. And that's not a lot when considering the average cost of a new car today is nearly $50,000. So in this scenario, if you live in Florida and you have minimum coverage, and crash into someone's new car, and let's say you total it, you'll have to cough up a lot of money to cover what your insurance doesn't. And that's just for one car. What if you cause a three car pile up and also sent seven people to the hospital? I think our listeners get the point, but I just want to emphasize that costs could really stack up in nightmare scenarios.

So, by buying the bare minimum car insurance needed to drive in your state, you really just set yourself up. You can be setting yourself up for a serious financial setback, and that's really the biggest con.

Sean Pyles: Okay. Those are very clear cons as to why you might not want to buy the cheapest. Let's talk about why people may think about or want to have the cheapest car insurance. What are some pros?

Ryan Brady: Yeah, so car insurance can be expensive. Not everybody can afford more than the cheapest possible coverage. So, that's really the main pro here is that it's typically affordable for a lot of people. According to NerdWallet's analysis of car insurance rates, we found that the average cost of minimum coverage for a good driver with good credit is about $57 a month. To me, that's pretty affordable I think, for most people. Meanwhile, full coverage insurance, which is just a fancy way of saying liability insurance, comprehensive and collision insurance, and whatever else your state might require, all that equals about $180 a month. So what, about triple the cost?

Sean Pyles: Big difference.

Ryan Brady: Yeah, so getting the least expensive car insurance possible could really help a lot of folks who can't afford much else. It could help them still drive to work, pick up their kids, get the groceries, etc. So, it could really be useful for a lot of us facing serious financial difficulties. But we advise that if you can afford it, think about getting more than the cheapest policy out there. You want to protect your assets by transferring more of the risk of a car accident to your insurance company rather than carrying that risk yourself.

Sean Pyles: Okay. But at the same time, car insurance has gotten a lot more expensive over the past few years. Can you talk about how folks can save money on insurance while insuring adequate coverage for their needs?

Ryan Brady: Yes. So, I'm glad you brought that up because car insurance has certainly gotten more expensive recently, and I assume our listeners can relate if they've seen their policy in the last six months or so. Car insurance rates have actually gone up 19% in the past year according to the U.S. Bureau of Labor Statistics.

Sean Pyles: Sheesh.

Ryan Brady: Yeah. And that's compared to the current overall inflation rate of 3.7%. So yeah, it's a lot right now. I'd say the first tip I'll throw out there is to shop around. This is hands down the best thing you could do. Companies often adjust rates for all kinds of reasons, and usually not in your favor. For example, a lot of insurance companies practice something called price optimization. And what this does is it charges people higher rates based on the likelihood that they won't shop around. So in this case, being a loyal customer can actually be hurting you. And indeed not many people make shopping a habit. According to a recent NerdWallet survey, only about a quarter of vehicle owners shop for auto insurance at least once a year or more.

Sean Pyles: Yeah. I mean, I understand because shopping for any kind of insurance is not very fun. I personally have had this on my to-do list for about six months now. So, I'm hoping that this conversation is the kick in the butt that I need to finally do that.

Ryan Brady: Yes, definitely do it and let me know. Let me know what you find too, with-

Sean Pyles: I will.

Ryan Brady: ... quotes and stuff that you get out there. The second tip I'll give is to ask your insurance company about discounts. And this is because many insurance companies, they offer a host of car insurance discounts, like for being a good driver or paying your policy in full. So, it's good to periodically ask about discounts, especially after you've experienced a big life event, like maybe being a first time homeowner or getting married. And Sean, a lot of us are working from home now so we're driving less, we don't have to do those long commutes anymore. So, if you call your insurance company and let them know, they may be able to get you a low mileage discount.

Sean Pyles: Okay. And so, really the key would be just calling them up like you said, and saying, "Hey, do you have any discounts for me?" The worst they can say is no, right?

Ryan Brady: Absolutely. Yep. It might take, I don't know, 10 minutes out of your day.

Sean Pyles: Yeah. Okay, great. So, what about raising your deductibles to save on costs?

Ryan Brady: Yeah, that's a great call. And just to reiterate what a deductible is, again, that's the amount of money that you pay before your insurance company kicks in the rest. So by doing that, by raising your deductible, you're actually assuming more of the risk yourself. So your premiums, the money that you pay for your insurance coverage, those should go down to reflect that. You just want to make sure that you have the cash on hand to cover a higher deductible if you ever need to make a claim. So, the third and last tip I'll include here is just to make sure that you're not paying for insurance you don't need. We talked about being underinsured earlier, but people could actually be over-insured too.

For example, if you have an older car and it's not worth a whole lot, you may be able to drop collision and comprehensive coverage if you own your car and you have some cash on hand. Or if you have gap insurance and your car loan is less than the current value of your car, you could drop that since gap insurance only covers the difference between what your car is worth and what you still owe on it. And then if you live in a household with a lot of cars and you work from home, you may be able to drop rental car reimbursement coverage for your car, and rental car reimbursement coverage, that would actually pay you to rent a car if your car is in the shop for a covered claim. So yeah, if you have a lot of cars available you probably don't need that one.

Sean Pyles: All right, and one last thing I'll add on is that driving safely can help you keep your car insurance affordable too, because rates can jump dramatically after a speeding ticket or a DUI. So, make sure you're following the rules of the road, stay alert. I know Ryan, you recently wrote a piece about the rise in traffic deaths in the U.S., which is pretty scary too.

Ryan Brady: Yeah. And in the article I found that a lot of the causes for those accidents and those deaths were because people were speeding, or they were getting DUIs, and surprisingly a lot of people weren't wearing seatbelts either.

Sean Pyles: That's scary. I mean, I have a bit of a lead foot but I always wear my seatbelt.

Ryan Brady: Yep, that's a good call.

Sean Pyles: All right, cool. Well, anything else people should know about car insurance?

Ryan Brady: Yeah, I just think something else worth pointing out here is that there's a lot of different factors that go into how insurance companies price their policies. I don't think most people realize all the personal and non-personal factors that go into it. It's almost like a black box. I feel like most people think that it's just based on their driving record or the car they drive. But a lot of things actually go into it. One of the things is your age, and maybe that's not much of a surprise to a lot of people, but yeah, if you're in your early 20s you're probably going to be paying more for car insurance. Also, where you live could come into play here. If you live in a highly congested area or in a city somewhere, maybe theft rates are higher, you might be more prone to getting in an accident because there's just more people around you. Even your credit history could come into play. If you have a low credit score, sometimes that could negatively impact your rates.

Sean Pyles: And that depends on the state that you live in as well.

Ryan Brady: That's correct.

Sean Pyles: Some states don't allow credit to be considered.

Ryan Brady: That's exactly right. And of course, cars and medical costs too are becoming more expensive, so that doesn't help either. And every company weighs these criteria differently, and that's one of the reasons why it's so important to shop around with different companies when buying car insurance.

Sean Pyles: All right, Well Ryan, that was a great overview of car insurance. So, now let's get into the second part of our listener's question, which is about home insurance. Can you give us an overview of the different options here?

Ryan Brady: Yeah, I'd love to. So like car insurance, homeowner's insurance also has a lot of different parts to it. And really the big one here is going to be your dwelling coverage. And this pays to repair or rebuild your home and structures attached to your house. Think of hardwood floors, kitchen cabinets, a porch or a garage, but there's a catch and that's that dwelling coverage typically pays for damages caused by sudden or accidental events only. So think fire, lightning, wind, hail, explosions, even riots. In contrast, it typically won't cover things that happen slowly over time or things that you technically could have prevented on your own through maintenance. So, these are going to be things like a slow roof leak, rodent infestations, a water backup from a failed sub pump. You're likely going to be on your own to cover those costs.

Sean Pyles: The joys of home ownership.

Ryan Brady: Exactly, yes. And then some other events too, excluded from dwelling coverage will typically include floods and certain earth movements, like earthquakes and landslides. But if you're worried about those, you should be able to purchase additional coverage to protect against those events.

Sean Pyles: And also with climate change, floods may become more common in your area. So, I recommend folks use tools like Risk Factor, which can show you how likely your property is to face things like floods and wildfire. You can check out the tool that I just mentioned by going to riskfactor.com. Also, we did a podcast series earlier this year about how climate change may affect your finances, including what it might mean for home insurance. So, I recommend folks check that out too. So Ryan, with dwelling insurance, your coverage typically matches the replacement cost of your home and attached structures. That is the money you would have to cough up today if you had to completely rebuild your home from scratch. Is that right?

Ryan Brady: Yeah, that's exactly right, Sean. And that's why I like to advise folks too to make sure that your dwelling coverage is keeping up with inflation and rising building costs by just checking in with your insurance company from time to time. And you also want to let them know too, that if you've made any big improvements to your home, like a renovated kitchen. And for a more hands-off approach, you could also typically add an inflation guard to your policy, and this will adjust your coverage limits automatically to keep up with inflation.

Sean Pyles: Okay, so there's also personal property insurance. Can you talk about what that covers?

Ryan Brady: Yeah. So, personal property insurance will pay to replace the stuff you own if it's stolen or destroyed. So, these could be things like your couch, your TV, clothes, even your vintage Beanie Baby collection, just about anything you could imagine, except for your car or your pet. There's a reason after all why we have car and pet insurance. Your belongings are typically covered on a named perils basis, which just means that coverage applies only for events that are called out on your policy. So if an event is not named, it's not going to be covered. In most cases you'll be covered for things like fire, theft, windstorms, smoke, lightning, and some other things. And then some common exceptions include damage from floods, earthquakes, neglect, or intentional damage.

So, you don't want to throw your remote at the TV, for instance. Also, something to know is that your personal property insurance coverage may have special limits on certain valuable items, meaning that it will only pay up to a specific amount for possessions if they're stolen or destroyed. This commonly includes jewelry, firearms, money you might have stashed under the mattress. So yeah, make sure you keep that engagement ring hidden. Though I'll quickly point out that you may be able to bump up coverage for those valuable items by paying for extra personal property coverage, you just might have to get an appraisal first.

Sean Pyles: Okay. Well, now let's turn to personal liability coverage.

Ryan Brady: Yeah. So, a lot of people don't give this one a whole lot of attention, but it could actually be a really big safety net in case you or someone in your household are held responsible for someone else's injuries, whether it happens on or off your property. And it'll also cover damage you accidentally cause to other people's stuff. So, basically it's like liability car insurance we talked about earlier, but for non-driving related situations. So, if your dog bites someone or someone trips on your pool deck, or you chop down a tree and it smashes into your neighbor's roof and you're found legally responsible for that, then your personal liability coverage can help foot the bill. But similar to liability car insurance, it'll only pay up to a certain limit which you can increase or decrease.

So, you want to consider getting enough personal liability insurance to cover the sum total of all your assets, and that includes your home, savings and investments. The more you own, the more you have to lose in the situation. And you just want to also watch out for attractive nuisances. And these are going to be things that might entice a child to use it unattended, like a swimming pool or a trampoline. And if you don't make them inaccessible to kids, you may be on the hook to pay for their injuries out of pocket.

Sean Pyles: Okay. And now let's turn to loss of use coverage. Can you give us a breakdown of what that covers?

Ryan Brady: Yeah, so this pays for living expenses if your home is unlivable and being repaired after a covered loss, like a fire, let's say, and this might pay for things like hotel expenses, pet boarding, food, moving and storage costs. It won't pay for things you were already paying for before the accident, like your mortgage payments or your normal everyday groceries. But let's say that you're now having to eat out more because the hotel that you're staying at doesn't have a kitchen. So, the extra money that you're paying for food each week will likely be covered. They could even reimburse you for loss of rental income, say if you had a renter living with you but they had to find a new place because yours is unlivable, your insurance can pay for those rent payments that you're missing out on.

It can also pay for living expenses if your home is fine, but you're not allowed to enter it for some reason. So for example, if you were evacuated for a hurricane, and let's say your city won't let you return until maybe the area's cleared out, your insurance may be able to pay for a hotel and other living expenses for the time being. And just an important thing to note here is that loss of use coverage only pays to help you maintain your normal standard of living. So, you probably won't be able to rent out a chateau in the countryside if you were living in a one bedroom condo before.

Sean Pyles: Darn, okay. Well Ryan, we've been hearing about some consumers foregoing home insurance even as climate disasters may pose an ever greater risk to their dwellings. Can you talk about what is changing in the home insurance landscape, and what people risk by not insuring their home?

Ryan Brady: Yeah. So, this is becoming a big issue. I recently read a survey from the Insurance Information Institute that said about 12% of Americans don't have homeowners insurance. And of that group, roughly half had household incomes of less than $40,000 a year. So yeah, there's a lot of stuff happening in the home insurance market right now, but the gist is that catastrophic events across the U.S., so think wildfires in California, hurricanes along the Gulf Coast, even hailstorms in Texas and the Midwest, those things are all rising both in frequency and severity, and these disasters cost money. And then when you throw in inflation, supply chain snags, labor shortages on top of all that, you have this perfect storm of rising costs. And all these costs are putting pressure on insurance companies, which in turn are placing greater pressure on consumers.

Sean Pyles: While we're also seeing insurance companies jacking up rates in certain high risk areas, or even not renewing policies or leaving states altogether.

Ryan Brady: Yeah, that's right. I mean, insurance companies are losing money. Consumers are facing the brunt of that. I live in southwest Florida, and even though I live about 15 miles from the beach, I'm not in a flood zone, my place was built four years ago, even after all that my homeowner's insurance still went up 30% this year. And that's actually mild compared to what I've been hearing from friends and family in my area.

Sean Pyles: Really? That is a lot.

Ryan Brady: Yeah, it is. I was shocked when I saw it, but at the same time I also wasn't all that surprised, I guess.

Sean Pyles: So, I assume that led you to shop around.

Ryan Brady: It did, yeah.

Sean Pyles: Okay. Well, now let's talk about what people risk when they forego home insurance or are underinsured.

Ryan Brady: Yeah, so if you don't insure your home you risk losing what is, for most people, the most expensive asset you'll ever own. But more than that, you risk being homeless if you can't afford housing elsewhere, or you can't stay with somebody else. And that could be traumatic, especially if you have kids. In my opinion, it's not worth rolling the dice over. I recently read an article about a couple whose home was destroyed by a tornado a month after they let their home insurance lapse. So, it goes to show you that anything could happen.

And that's not even to mention the fact that homeowner's insurance is required if you have a mortgage. So, if you try to go without it your lender will likely buy a policy on your behalf, and that policy is usually going to cost more and it's not going to give you as good of coverage as you typically get. And not only that, but if you let your homeowner's insurance lapse, future insurers could see that as a red flag, which will just make a bad situation worse. But we're starting to see more consumers think about this kind of stuff before they buy a house. I saw a recent Zillow survey that found that more than 80% of home shoppers are now considering climate risks when looking for a new home. So, that's at least promising.

Sean Pyles: Okay. Well Ryan, now let's talk about shopping around for insurance, both home and car insurance. This is one of the least fun personal finance chores, but getting a good deal on the coverage that you need can help you save a lot of money. So, what do you think is a good approach to shopping for both car and home insurance?

Ryan Brady: Yeah. So real quick, I'll say that shopping for insurance is akin to nails on a chalkboard, for myself included. But once you start comparing quotes and you start seeing the sometimes big difference in prices that insurers may quote you, it then becomes fun because you know that you could potentially be saving a lot of money by not just going with the first quote that you get. And besides, the internet makes this so easy these days, Sean. A while back, I remember I changed car insurance companies after sticking with the same company for years, and after about I think it was just one hour of work from gathering quotes from three or four different insurers, I ended up with a policy of similar coverage for about half the price I was paying before.

Sean Pyles: Oh, no way.

Ryan Brady: Yeah, it was definitely worth it. I was pretty happy to see that. And that brings me to another point too, is that when you compare quotes with insurance companies, you want to make sure you do so with as close to the same coverage limits as you can. You want to compare apples to apples, or onions to onions using our previous analogy that we had.

Sean Pyles: I love it. You’va gotta watch Shrek, Ryan, I'm telling you. You'll understand the onion thing-

Ryan Brady: All right. It's on my list, Sean. Another good approach to shopping for insurance is simply having somebody else do it. There are insurance brokers out there whose sole job is finding the best insurance policies for people. So, they could be especially useful if you don't want to do the legwork yourself, or if you have complex insurance needs, or if you're having a hard time finding home or auto insurance in the first place. Just keep in mind, you might have to pay a small fee in exchange for their help.

Sean Pyles: Yeah. And I would also encourage people to double check a broker's work to ensure that it is actually giving you the coverage that you want at the price that you can afford. Because yes, they can help you sift through a lot of different policies, but at the end of the day you are the one that has to pay for and have this coverage.

Ryan Brady: Yeah, that's a great tip.

Sean Pyles: Well Ryan, any final words of wisdom for our listeners?

Ryan Brady: One final tip I'll say is that if you can, shop around for insurance before you make that big purchase. A lot of people don't think about insurance when shopping for that new car or that new house, and who could blame them? It's not the most exciting thing in the world to do, but you don't want to be sticker shocked by high insurance rates after the fact. So, definitely do your research before you buy.

Sean Pyles: All right. Well Ryan, thank you so much for talking with me.

Ryan Brady: Absolutely, Sean. Thanks for having me.