We all like to cut down our expenses here and there, perhaps most notably on our insurance premiums. Whether it’s car, home, life, business or health insurance, for most households usually that’s one of their biggest monthly expenses
So, its natural that when you are trying to save money, you look at what you pay for your insurance premiums to see if there is anything you can do to give your wallet a break.
1. Understand that Insurers Don’t Think Alike
Take note that individual insurance providers have their different ways of assessing the risk to insure you. The equation involved could get even more complicated with big-ticket items such as homes, cars, boats and the like.
So, when presented with exactly the same factors — cars, drivers, driving records, etc. — different insurance providers would come out with wide ranging insurance premiums.
The ways the insurance companies are assessing risk, even the exact same risk, vary greatly from one another, and this results in significantly different pricing on their products.
2. Consider Car Insurance Costs Before You Buy
When people buy cars, regardless of new or used, they often overlook the insurance related expenditure, which can greatly influence the total cost of ownership.
It makes sense to factor in the insurance cost as auto insurance premiums can swing wildly subject to specific characteristics of that particular vehicle; that could include its pricing, safety record, average repair costs as well as the risk of theft.
3. Compare Insurance Carriers
As auto insurance providers price their products very differently, it is prudent on your part that you do some shopping before you nail down your desire to insurer. Generally, it makes sense to inquire from at least three separate providers and get at least three different insurance quotations.
There are many
ways to compare insurance carriers; getting touch with the insurance companies directly, check around with friends and family on their respective insurance providers or go online to opt in insurance quotes.
All of these measures would be helpful to find the insurance provider that is just right for you.
You may also want to check your
state’s department of insurance. It is a good place to compare rates, evaluate customer ratings and complaint ratios, and to find contact information for a variety of major carriers.
4. Combine Insurance Policies with One Carrier
A wide variety of insurance providers actually offer multi-policy products, which allows you to combine auto coverage and home insurance into one. Since such products come with decent discount, why not take advantage of their money-saving feature.
For example, you can consolidate all the family cars coverage into one single insurance plan, or you could include all driving-age family members within one single insurance policy.
But before you make any decision, make sure you do your research, after all, you could even achieve greater savings as you spread your policies across multiple providers.
5. Comparison Shop When You Renew
While you may congratulate yourself on getting the best bargain this year, there is no guarantee that the same deal will continue to promise value for money when it comes to your insurance renewal.
I would always advise that you look over the whole policy if there has been any change in rate, and look around the competitions are offering better deals this time round.
The emergence of Internet makes it super easy task to get various online quotes from a wide variety of websites; especially those that have previously stored your profile so that they could generate instant quotes for your comparisons.
6. Drive Safer, Save More
As you become a more competent driver, there is even greater chance for more savings in your insurance coverage. If your driving record is clean, meaning that you have not been involved in any accident or moving violations over a specific number of years, you are entitled to safe driver discounts.
There could be even more saving if you do decide to take on a defensive driving course.
7. Match Your Coverage to Your Needs
While unlimited protection could be appealing, don’t do it. Think of it this way, if your investment on your car is just about modest, why would you want to expect enormous liability ceiling on your car policy.
On the other hand, never dismiss the real and practical risks associated to your vehicle.
8. Don’t Leave Discounts on the Table
Multiple discounts are possible especially when you have a number of policies from just one single insurance provider. Many companies are beginning to offer discounts if you’re a paperless customer.
Others will provide a discount if you’re willing to make payments electronically instead of by check.
9. Raise Your Deductible
Sure, you could incur more expense if you happen to get into an accident. However, by simply increasing your deductible in the region of several $100s, you could potentially cut 15% to 40% from your collision and comprehensive coverage costs.
Just make sure that you save some resulted from this saving in your monthly car insurance premium so in case of a claim, you can actually afford a
higher deductible.
10. Maintain Good Credit
Your
credit score does effect your insurance rates. Auto insurance providers often have this logic; if one has an established and stable credit records, he or she will tend to have less accidents. That seems to be a trend among auto insurance companies as more take into consideration of credit scores as they calculate rates.
Since this is the case, it makes sense to maintain reasonable, if not impeccable, credit score to save on auto insurance payment. So make an effort to regularly review your credit report so that it does not inadvertently capture items that are not attributed to you.
The internet is full of services that facilitate checking on your credit. And advices are aplenty if you need them to improve your record.
11. Reduce Insurance Coverage on Older Cars
For older vehicles, always check their Kelley Blue Book values. If you are paying over 10% of the current value of your car on your annual comprehensive/collision insurance premiums, probably dropping the cover makes sense.
On average, claims happen only every 11 years. Naturally, there is always this risk that whatever claim payment comes your way might be less than the total comprehensive/collision premiums you had paid.
12. Consider a Health Savings Account
Many groups as well as individual health plans do offer these accounts. One can fund an HSA (
Health Savings Account) with pre-tax dollars, oversee their investment in a 401(k)-type account, and then utilize the funds tax-free, provided these form parts of the approved medical expenses.
Additional plus point of HAS is that it allows funds to be rolled over every year in case you don’t need them. So, you will be effectively building up a major emergency fund in anticipation of big healthcare bills in the future.
With all these talks on health reform, there is a good chance HAS would have to come to an end. So if you like the scheme, do something about it now!
13. Young Adults Should Shop for Cheaper Health Insurance
In the group market, employee health plans invariably cover everyone, independent of their health status. This results in healthier employees having to pay higher rates. In the individual market, insurers are at a liberty to provide coverage to only the consumers they want.
As a result, lower rates are possible for healthy young consumers, whose chances of becoming ill and file claims are considered relatively low.
The new health reform law stipulates that young adults (age 26 below) should be guaranteed coverage under their parents’ family health plans. But there have been arguments that things could be cheaper for the family if an individual policy could be in place for the young adult.
By the same reasoning, cheaper individual coverage could apply for an employee’s spouse, instead of the more expensive group plan.
14. Consider a Health Maintenance Organization
Normally, Health premiums for
HMOs are way cheaper than stand alone policies that may allow you to choose your own doctors.
16. Do Your Homework
Insurance is never straight forward; some liken the planning involved to that of a root canal or even a funeral. A good place to get some tips and advice on how to go about choosing an insurance company is
USA.gov’s insurance tips page.
By no means, this is an exhaustive list, but the advices here would give you a good idea on how to start saving money on insurance. Don’t lose track of the goal, the objective is to find the best final price, vis-à-vis the biggest discounts.
And remember, it is possible that a provider who offers the least discounts just happen to provide the lowest insurance rates, saving you more money on your insurance in the long run.