As Inflation Ravages Budgets, How Can Your Car and Home Insurance Save You Money?

Couple with Insurance agent.
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As Americans grow more worried about an impending recession, people may be looking for ways to save money without cutting back on the things that matter most. Surprisingly, only 20% of Americans polled in the recent Country Financial Survey Index have checked in with their home and auto insurance companies to see if they could reduce their rates.

However, often all it takes to save money on car and auto insurance is to switch carriers or ask your insurance agent if there’s a better deal available. “That is the value in having a trusted insurance representative who helps you assess your needs and make sure that coverage is right-sized for you,” said Jeremy Brewer, director, National Property Product at Country Financial.

Besides shopping around for a lower cost policy, there are several ways you can save money on your home and auto insurance.

Only Pay for the Coverage You Need

Whether you’re evaluating your home or auto insurance, it’s important to make sure you have the right coverage. “Often, the simplest way to reduce rates is simply to limit the coverage you pay for. However, it is important to understand what that might mean at the time of loss,” Brewer said.

You may be able to reduce your insurance bills by increasing your deductible, but make sure you have money in the bank to cover any losses. You don’t want to be on the hook for an expensive deductible that may prevent you from getting the repairs you need.

Make Your Money Work for You

Also review your home insurance policy and decide if there is coverage you don’t need.

Coastal Insurance, an insurance agency on Long Island, N.Y., lists mechanical breakdown coverage, water back-up of sewers and drains and identity theft coverage as three endorsements, or add-ons to your policy, that could be a waste of money.

Identity theft coverage, for instance, is often available through your credit card company for free.

Emphasizing that your home insurance policy is designed for catastrophic loss, Coastal points out that it’s typically better to pay for minor home repairs and mechanical breakdowns out-of-pocket rather than to file a claim.

Choose the Right Car

“Key factors that influence the cost of insurance [are] where you live, what type of vehicle you drive … your prior claim history and the choices made around your policy coverage,” said Brewer.

If you’re in the market for a new or used vehicle, make sure to consider auto insurance costs when you’re comparing the overall cost-of-ownership. Remember, if you’re taking out a loan for your vehicle or leasing a new car, you’ll need to pay for collision insurance as well as liability, which can significantly increase your premiums.

Be a Safer Driver

You can’t go back and change your claim history to enjoy lower insurance rates, but you can make an effort to be a safer driver in the future. Ask your insurance company about a defensive driving course that could save you money on your car insurance. According to QuoteWizard, some states offer a defensive driving course discount worth as much as 20% off your premiums.

Make Your Money Work for You

Brewer said that avoiding speeding tickets can also help you keep your auto insurance rates low.

New technology makes it easier to prove that you’re a safe driver. Country Financial offers its customers an auto telematics app that tracks your driving behavior. “Some of our clients are seeing discounts of up to 25% by using our auto telematics app, DriverIQ,” Brewer told GOBankingRates. “It’s a win-win. You might become a safer driver and save money.”


Ask About Discounts

While a good insurance agent should steer you toward the coverage levels you need and can afford for home and auto insurance, it helps to take a proactive role in seeking out discounts, too.

“Consumers can tip the scales by paying their insurance upfront, taking advantage of discounts through bundling multiple products with the same carrier and taking actions to reduce their risks,” Brewer said.

For instance, ask about discounts for monitored home alarm systems, upgraded electrical, plumbing or heating systems and water-leak and fire-prevention systems, including alarms and sprinklers.

If your insurance agent doesn’t mention these discounts — including savings for paying upfront — make sure to ask about additional ways you can save money, Brewer said.

Bundle Policies for Even More Savings

There are several advantages to bundling your home, auto and life insurance with one company. Having one point of contact for all your insurance needs can save time and help you build a relationship with one broker for better service. Having a single bill to pay also saves time and reduces the risk of late payments. Finally, there may be significant cost savings in bundling your policies.

Make Your Money Work for You

“Many insurance companies will offer discounts if you bundle both your home and auto insurance together along with any other insurance product that you might need,” Brewer said.

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