It’s become a truism that insurance costs too much. Medical costs and health insurance prices have gone straight through the roof in recent decades, increasing at 13x the rate of the cost of living.
Though property, auto, and life insurance hasn’t increased at that rate, insuring yourself, your property, and your family’s well-being in case of tragedy is sometimes outrageous, too. So I wanted to give a list of short tips for saving on your monthly insurance bills.
When it’s time to buy new policies, look at company ratings, the size of premiums, and the deductibles closely. Research policies yourself on your own time, then ask questions you know the answers to already. This way, you’ll learn what the agent knows and what they’re hiding from you. Trust, yet verify–that’s my policy.
Those are general rules for getting better insurance at a lower price. Here are specifics that can save you hundreds of dollars per year and tens of thousands of dollars over your lifetime of being insured.
Raise the Deductibles
This amounts to making a bet on whether you’re going to need your insurance often, but if you have reasonably good chances of avoiding needing to pay the deductibles, you can save hundreds of dollars this way. This is especially true on new cars or renter’s policies.
Comparison Shop on Car Insurance
Competition is fierce when it comes to car insurance these days, so comparison shop yourself. Don’t let your insurance agent do all the work, because you’re accepting what they tell you on faith. That goes double if you decide to shop online; don’t just trust some quote given to you by an online search box.
Check rates for several companies in your area. Even devoting a little time to research reduces the cost of your automobile insurance for months and years to come.
Pay Annual Rates Instead of Monthly Rates
Every time you pay your bill, a transaction fee is assessed. These add up over the course of the year. If you have the financial wherewithal and/or discipline to save up for the yearly payment, pay your insurance by the year–not the month. Avoiding service charges is one way to get ahead in this world.
Store Heirlooms in a Safe Deposit Box
If you have family heirlooms, keepsakes, and other valuables, store them in a safe deposit box in the local bank. When you store in the safe deposit box, the cost of insuring these items is greatly reduced. Also, the home safe is great, but if a fire strikes you home, many of the finer things in the safe still won’t survive–at least in the form you would want them.
Choose Replacement Cost Policies
One way to spend a little bit now and save a whole lot later is getting a replacement cost policy. This replaces your household items and other valuables if something should happen. If fires, flooding, or similar situation causes damage to your stuff, the company pays the full price–not depreciated price–for your belongings. If you go through one of these crises, don’t have to spend your own cash to refurbish your home, too.
Renters Insurance Is Inexpensive
The rental equivalent is the renters policy, where you insure all the home furnishings and other belongings in your apartment or rental home. Get this coverage, because it’s cheap and you don’t want to have to replace eveything yourself.
Avoid Nursing Home Coverage
Many companies scare the elderly into getting a nursing home policy and I think it’s despicable. While this no doubt helps some, most of the time it’s a waste of money. Shame on agents for scary old folks into buying policies they don’t need.
Get Discounts for Alarms and Security Systems
Get the smoke alarms and the security cameras you need and want, then ask your agent about what discounts your provider offers for these installments. Don’t ask beforehand and decide to install based on the amount of discount provided, because you need these helpful home safety devices, either way.
Avoid Dread Disease Coverage
Many insurers offer special high-priced coverage for diseases like cancer or rare scenarios, such as dying in a foreign country. Unless you expect to be traveling in exotic countries a lot–and especially in dangerous locales inside those foreign lands–I wouldn’t worry about it. This is something you can control. Insurance firms often play on fears when they try to sell coverage.
Don’t Buy Air Travel Policies
Another way to waste money is to buy air travel insurance. You might as well be buying coverage for lightning strikes and meteorites. The chances of your flight having trouble are so low it’s a bad bet to buy this type of plan.
Buy from Highly Rated Companies
Finally, if you’re going to be shopping, buy from the highest-rated companies. This used to be an afterthought, but it’s not anymore. In the days of policy proliferation, it’s important you find those reports which rate providers and only use those with healthy ratings. Otherwise, you’re setting yourself up for disappointment–perhaps financial ruin.