“Insurance poor” is a term one often uses when complaining about the skyrocketing cost of premiums for health, life, auto, and home insurance. The total insurance bill for even a small family can quickly exceed $1,000 a month, putting financial pressure on the best of us–or worse yet, causing those experiencing financial hardship to do without. Here are a few tips for saving money on insurance.
Most major insurers offer discounts for individuals who buy more than one policy through the same company. If you can get at least two of the four basic policies (health, life, auto, home) from the same provider, ask if you qualify for a discount. Other “lifestyle” discounts are also often available, and some policies will offer discounts for non-smokers. Teachers, senior citizens, or members of the military may also qualify for special discounts. You may get discounts on homeowners insurance for adding a security system, or by installing impact-resistant roofing, deadbolts, and outside motion lights.
Consumers also often find that they can save a significant amount of money just by comparing insurers. Consumers too many times tend to buy insurance products from an agent, just because that agent is conveniently located, or has served the family for several years. But are they really serving you well? In most states, there is very little regulation concerning the price of insurance products, and premiums can vary by a surprising amount between carriers. Compare several different companies before you buy. When doing your comparison, realize that policies are usually not standardized in terms of coverage or price. As such, the lowest premium isn’t necessarily going to be the best deal–compare “apples to apples” to determine the best rate for equivalent coverage.
Next, reconsider the amount of your deductible. Carrying the most expensive policy with the most coverage and lowest deductible isn’t always the best way to go. Taking a higher deductible will often yield significantly lower rates. For health insurance, you can combine a high deductible policy with a Health Savings Account for the most benefit. Also, HMOs and PPOs are almost always cheaper than general indemnity health insurance. You must choose your provider from a select group, but you’ll gain a big price advantage. For homeowners insurance, when you are considering buying a new home, take into account factors that will influence the premium, such as proximity to natural disaster areas such as earthquake faults or hurricane zones. You can also obtain a copy of the insurance loss history of the home before making your final decision. Loss history plays a big role in how much a carrier will charge you.
Review your policies periodically. Insurers are notorious for add-ons, which add cost to your premium and aren’t always that useful. Agents will naturally try to sell you everything they have to offer, but don’t assume that you need to have it. Have some of those add-ons removed to decrease your premiums. Also, if you are able to do so, pay your premiums semi-annually or annually, instead of monthly. Carriers do typically offer the convenience of monthly payments, but will add on a “service fee” every month.
