1. Shop for insurance.
Don’t be afraid to shop around for insurance, especially auto and homeowners insurance. The premiums on these can vary by hundreds of dollars from one company to another. And insurance is one of the easiest products to shop for online.
2. Increase deductibles.
On auto, home and health insurance, increasing your deductibles is one way to lower your premiums. If the deductible on your homeowners and auto collision deductible is $250, ask your agent what it would be if you increased it to $500. This could represent a savings of as much as 10%. Even greater savings can be achieved by increasing the deductible on your health insurance. Remember, however, that you will have to have the financial resources to cover the increased out-of-pocket expense.
3. Buy homeowners/renters and auto insurance from the same company.
Nearly all major insurance companies give a discount when you insure both your auto and home within the same company. In addition, if you insure more than one car, you should receive a discount on your auto premium.
4. Check out the cost to insure a car BEFORE you buy it.
Most people buy a car and then discover too late that it’s a bear to insure. The type of car you drive is a critical factor in determining insurance rates, and if you happen to have teenagers in the household, it is even more critical. Before you buy a particular car, check with your insurance agent to see how much it’s going to be to insure it. An unexpectedly high insurance premium could break an otherwise workable budget.
5. Clean up and maintain a good credit record.
More and more, insurance companies are using your credit report to determine not only IF they want to insure you, but the rate that will be charged based on your credit report. No, it doesn’t seem like one has anything to do with the other, but insurers have data that directly link the possibility of claims to the quality of a person’s credit history. If your credit score is above 680, you should be receiving good insurance rates. You can get a FREE copy of your credit report from the three credit reporting agencies here.
6. Clean up and maintain a good driving record.
Besides the kind of car you drive, nothing affects the cost of auto insurance like your driving record. DUI’s, accidents, speeding tickets, failure to obey traffic control devices can cause insurance premiums to go through the roof. Your best defense against high auto insurance premiums is to maintain a good driving record. Drive the speed limit. Always come to a full stop at traffic signals. Don’t drink and drive. The cost of bad driving habits is usually more than most people can afford.
7. Don’t use your homeowners/renters insurance as a maintenance policy.
Many people think that just because they have homeowners insurance they should use it for every damage claim that comes along. Insurance companies expect you to use your insurance for major claims like a fire loss or a windstorm loss. If you have a $250 deductible and enter a claim for a frozen pipe that cost $350 to fix, your claim record in the eyes of the insurer will look worse than if your whole house burned to the ground. It doesn’t seem right, but unfortunately that’s how insurance companies work. Too many of these small claims will cause the company to cancel your policy. Get homeowners/renters insurance quotes here.
8. Beware Of Dog.
Did you know that the kind of dog you own could be dangerous to your insurance? Pit bull, doberman, rottweiler are all breeds that are red-flagged as aggressive and could cause your homeowners insurance policy to be cancelled or at the least contain an exclusion for anything having to do with the dog. Along with trips and falls, dog bites are on the top of liability claims. Even small dogs that bite are a problem. You may get away with one dog bite liability claim, but not two. Usually after the first dog bit claim, the insurance company with issue an exclusion. Should your policy be cancelled, you may find it difficult to secure reasonable homeowners insurance coverage.
9. Is affordable health insurance an oxymoron?
If you are employed and lucky enough to have company-paid health insurance, count your blessings. If not, there are still some things you can do to save on health insurance. First, make sure you have only the coverage you need based on your health status. Prescription drug coverage is nice, but if you take few or no prescription drugs, you probably don’t need this coverage. Same goes for maternity coverage. Second, increase your deductible to the highest level you can sustain. Put the amount of your deductible in a savings account to draw from as needed. Third, shop for the least expensive policy. With the new Affordable Care Act, you may be able to save a good deal of money, as long as it stays around.
10. Don’t over insure your life.
Unless you’re in the multi-millionaire class, buy only the amount of life insurance and type of life insurance you can afford. It is always good to have some insurance, but most insurance agents will attempt to sell you much more than you probably need. Understand the difference between whole life and term life. There are advantages to both, but whole life costs substantially more than term life. Your life insurance needs will change at different stages of your life. The best way to save on life insurance is to educate yourself.