Tips To Get More From Your Insurance Company
Insurance policies are designed to reduce your financial risk, which is a good thing. But auto, home and life insurance premiums can cost thousands of dollars per year and really put a strain on your wallet. Even so, that doesn’t mean you have to resign yourself to paying expensive insurance rates. Instead, look for options to save money, including bundling policies to get a discount. According to a 2021 insurance rate analysis by Insurance.com, you can save an average of 17% or $730 per year by bundling your home and auto insurance policies.
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“Bundle by insuring your home and car (even boat) with the same company, because you may be able to save money if you have more than one type of policy with the same insurance company,” said Joe Meisinger, chief underwriting officer and head of national products for personal insurance at Travelers. “Also, consider bundling your valuable items and umbrella liability policies to save.”
But bundling isn’t the only way to save. Take a look at these helpful tips to get more from your auto, homeowners and life insurance companies — all while paying less.
Auto Insurance: Increase Your Deductible
“Most people select low deductibles when signing up for insurance but this will cause your monthly payment to be higher,” money-saving expert Andrea Woroch said. “If your goal is to lower your premium, increasing your deductible is a quick fix. Increasing your deductible from $250 to $1,000, for instance, can have a significant impact on your premium. Just make sure you stash away the amount you save until you have enough to cover the deductible, and keep it in a separate account so it’s out of sight and out of mind.”
Auto Insurance: Opt for Usage-Based Insurance
You could save as much as 50% on your auto insurance premiums by signing up for usage-based insurance.
“Safe and low-mileage drivers on usage-based insurance can get discounts,” said Felix Maberly, the manager of Tiger Supplies. “Some insurers have programs to track your driving through a telemetric device installed in your car in exchange for possible discounts. If you drive fewer than 10,000 miles a year, you might save money with this type of program.”
Homeowners Insurance: Lower Your Personal Property Insurance Coverage
“A great money-saving tip is to take a home inventory of your possessions, estimating the cost it would be to replace each item,” said R.J. Weiss, certified financial planner, licensed insurance agent and founder of The Ways to Wealth. “It’s standard to include personal property insurance within a homeowners policy of at least 50% of the amount you carry to rebuild your home. Therefore, a $500,000 home would have $250,000 of personal property insurance. For many homeowners, especially younger ones, who haven’t acquired a lot of possessions, they can save 5%-10% by asking their insurance to lower the amount of personal property to the amount they determined in their home inventory.”
Homeowners Insurance: Improve Home Security and Safety
You may be able to save around 10% on your homeowners insurance premiums if you install a home security system.
Look for opportunities to improve home security and safety,” Meisinger said. “If your home has certain types of fire alarms, burglar alarms, locks or smoke detectors, see if you qualify for a credit given you’ve reduced your risk. Smart home technology could also qualify you for a discount (e.g., Ring, smart thermostats or water sensors), which is easier to install and more affordable than ever.”
Life Insurance: Share Your Activity and Fitness Data
“One often overlooked way of obtaining discounted life insurance rates involves sharing your activity and fitness data,” said Matt Schmidt, co-founder of Diabetes Life Solutions. “Certain life insurance providers allow consumers to voluntarily provide their FitBit or Apple watch data. Depending on the activity level of the consumer, you may qualify for discounts ranging from 3%-6% annually. While these discounts may seem small at first, over the lifetime of a life insurance policy you could stand to save thousands of dollars potentially.”
Life Insurance: Buy Term Instead of Whole Life
Isabella Fitzgerald of Lion Life Insurance pointed out that opting for a little bit of life insurance is always better than having none. And when you compare the costs of term life insurance to whole life insurance, whole life insurance could cost 10 times or more than the amount of a term life policy.
“Instead of splurging on a whole life insurance plan that costs the earth, buy a short-term plan instead,” she said. “A 10-year plan is an affordable way to protect you and your family, especially if money is tight. But make sure it’s a convertible plan — this will give the option to switch to a permanent plan in the future when your budget is less restrained.”
All Policies: Pay Annually
If you can swing it, you can save money by paying your insurance premiums upfront each year. This goes for auto, home and life.
“You can save typically between 2%-5% with most life insurance companies if you pay annually versus monthly,” said Brian McHale, CEO and owner of PolicyMutual.
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