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How You Can Pay Less For Insurance

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When people are trying to save money the first step they usually take is to eliminate anything they feel is an unnecessary expense. Unfortunately insurance policies, like renter’s insurance and life insurance, are the first to go when push comes to shove. Even if you understand the importance of your insurance policy and the premium is 50 dollars a month, if you don’t have that extra 50 dollars you have to make a cut.

However, most people simply let policies lapse out of financial frustration instead of looking at ways that they can save on their monthly premiums and keep the piece of mind that their policy provides.

But don’t think this is only for people who are facing dire straits. Anyone who is looking to save a bit of money each month should consider the following tips to see which ones can help them keep more money in their pocket.

How To Save On Insurance

  • Shop around: It sounds simple but how many times do we buy something without comparison shopping first? Not to mention the fact that things may have changed since you last looked at the different policies competing agencies may have to offer.
  • Pay your premiums all at once: It may be tough to do on a strict budget but if you can pay a year’s worth of premiums at once, or even at six month intervals, your insurance company will most likely give you a nice discount. Plus, that’s one less thing to include in your monthly budget.
  • Be low risk: Insurance is all about risk. Ask your insurance company what you can do to put yourself in the lowest risk category available. Simply adding a deadbolt lock or keeping up to date fire extinguishers in your home may help you save some extra cash.
  • Higher deductibles = lower premiums: By increasing the amount you are responsible for in the event of a claim will lower your monthly premiums but be careful. Don’t increase the deductible to a point that you will never be able to meet it on your budget.
  • Reduce your insurance: Sometimes, less is better. Assess what you really need and make sure those items are covered leaving out the stuff that you can really get by without.

By doing a little extra homework when it comes to your insurance policies you can save a little extra money each month and avoid putting your back up against the wall and having to make tough decisions.

This is a guest post by Jeff Orloff.  Jeff writes for the Renter’s Insurance Blog

15 Simple Tips For Cheaper Car Insurance Rates

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Saving money on car insurance is easier than you think… with a little bit of self education. Here are 15 simple things you can do that will save you money, while better protecting your car and its occupants.

So have at it – become a confident, educated consumer and make sure you pay the lowest possible price for your car insurance!

15 Tips To Get Better Insurance Rates

  1. Understand insurance companies – The auto insurance industry is divided into three types of businesses: Direct Agents, Independent Agents who sell the insurance of various companies, and Exclusive Agents who work on commission and can only sell one brand of insurance. If you have a good driving record, it’s likely you’ll get the best deal from a direct agent because they remove the middle man.
  2. Shop around – This is easily one of the most important factors to consider. Don’t take quotes from just a couple auto insurance companies. Instead, really look into what each has to offer and which discounts they can give you.
  3. Ask for insurance advice at your body shop – Your local body shop works with insurance companies and their adjustors nearly every day. Ask them which companies they prefer and which have the smoothest claims process.
  4. Check with your state’s insurance department – Depending on which state you’re in, many publish consumer complaint data and complaint ratios that show how many consumer complaints have been made against each company. Make sure you choose a company that you’re comfortable with and has gotten good reviews.
  5. Slow down – If you’ve had several speeding tickets, you’re much less likely to get discounts for safe driving.
  6. Etch your VIN – Studies have shown that cars with an etched-in VIN are much less likely to get stolen. By avoiding a stolen car, you’ll avoid a claim.
  7. Verify the accuracy of your policy – If you haven’t done so, take a minute to browse through your policy to make sure everything is correct. You’d be surprised at how quickly small charges can add up.
  8. Avoid lapses in coverage – Even a few weeks’ lapse in coverage can make you ineligible for discounts. If you’re in the process of switching carriers, make sure you don’t quit your previous carrier until the new coverage takes effect.
  9. Don’t claim small amounts – If you often make small claims (less than $500), you may have to pay a higher premium when it comes time for renewal. If you make a significant amount of claims in one year, your insurer may not want to cover you at all. Next time you have a claim, make sure it’s worth it in the long run.
  10. Limit the number of people who drive your car – The more people you have listed as drivers, the higher your premium will be. Teenagers and young adults under 25 are among the most expensive drivers to add to the policy.
  11. Verify the accuracy of your VIN – Most drivers are unaware of this, but an inaccurate VIN (even if it’s off by just one digit) can affect your auto insurance quote. Double check your VIN to ensure you’re not being overcharged.
  12. Mind your credit score – More and more auto insurance carriers are considering credit scores when giving you a quote. Sometimes, having bad credit can end in you paying up to 50 percent more. So, make sure to pay your bills on time and check that there are no items on your credit score that aren’t yours.
  13. Evaluate insurance costs when purchasing a new vehicle – When considering a new car, get a quote on your insurance rate, as the year, make, and model can make quite a big difference. Newer, sporty cars will be significantly more expensive to insure than used, family-style cars.
  14. Purchase a low profile car – Similar to the above, know that cars that are expensive to repair or have a high theft rate will end up costing you quite a bit more to insure.
  15. Don’t “pimp your ride” – Research has shown that adding modifications to your car, like a rear spoiler or lowering the suspension, can nearly double the cost of coverage.

 

 

 

 

 

And there you have it! Next time you’re shopping for new auto insurance, keep in mind the above tips – you may be surprised just how much money they can save you in the long run.

This is a guest post from Pam King.  Pam writes on frugality, safety and insurance literacy for Direct General, a provider of cheap car insurance . When not saving money on her insurance, Pam enjoys knitting, NASCAR, family and watching rollerderby! :)

What Kind Of Insurance Do I Need To Have?

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I haven't talked about insurance very much on this site, but I do think it is one of the more under-appreciated aspects of personal finance, and one that far too many people neglect.    Insurance is so wonderful because it takes the monetary risks associated with a catastrophic life event, and transfers the risks of those events to the insurance company.  The insurance company is banking on the fact that most people won't need to use their insurance, but if you're the one who needs it, you'll be glad you have it.

Insurance is your safety net while walking the high wire of life.

My wife and I have had pretty good insurance coverage in all aspects pretty much since we were married.  We've got homeowners insurance, life insurance, auto insurance and of course health insurance.  We're extremely glad that we had the insurance coverage – especially our health insurance as my wife ended up having a major medical situation 2 years ago where she almost died because of a blood clot in her leg.  In the end we ended up spending almost $300,000 on medical care since 2008.  Without our good health coverage, we would have been in a horrible situation where our medical debt could have ruined us.

With So Many Kinds Of Insurance – What Kinds Should I Have?

they types of insurance you carry will depend on your personal situation, how secure you are in your finances, and whether or not you actually need to have insurance.   Some people may be wealthy enough to actually self-insure.  If you're not to that point yet, here are some insurance types that I'd suggest getting:

  • health insurance
  • life insurance
  • disability insurance
  • homeowner’s insurance
  • auto insurance
  • long term care insurance

Health Insurance

As I already mentioned my wife and I have had in excess of $300,000 in unexpected medical bills in the last 2 years.   Since we had health insurance we ended up only paying about $4,000 or so of those bills, and insurance covered the rest.

Before we had my wife's medical situation, I may have been tempted to think that health insurance wasn't really needed by everyone – for example, for someone young and healthy.  But after my healthy 27 year old wife with no history of health issues got sick and almost died, it quickly changed my thinking on this.   I realize that just because you're healthy now doesn't mean you can't have an accident, or have a new health issue crop up.  Better to get the insurance now while you're healthy and the rates are lower!

I now believe that health insurance is one of the most important types of insurance to carry.   The number of people who are forced into bankruptcy or serious financial straits because of medical debt is staggering.  Don't become one of the statistics – get insurance!

So where to get your health coverage?  For us the first place we checked was with our employers.  Since my wife's place of employment didn't have coverage, we were both covered under my work's health care plan.  Since my workplace has a group plan our rates are lower than if we were to buy insurance on our own.

If you don't have group coverage through your work available you might want to think about getting a HSA or Health Savings Account.  A HSA basically will give you a tax-exempt savings account to pay for your own health care expenses – and it is usually paired up with a high deductible insurance plan of some sort.   The insurance plan would cover any major health care expenses that might otherwise be catastrophic – like my wife's situation.

Of course, all of this information surrounding health care coverage could change drastically over the next couple of years as we go down the road of government sponsored health care.  Stay tuned.

Term Life Insurance

I didn't get term life insurance until we were expecting our first child because my wife and I were dual income with no kids – and if I were to pass my wife would have been able to continue paying her bills – same as before. Now that we've got another mouth to feed and someone else to think of and provide for – I bought life insurance to help cover costs in case of my untimely end.

This is one that I’ve thought was a good idea, but didn’t pursue until I found out we were expecting our first child. Now that I know we have  another family member to provide for, it’s way past time that I got life insurance to help them out in case of my untimely demise.

Term life insurance is extremly cheap nowadays, so there really is no reason not to get it.  I was able to get ten times my yearly income in coverage for only around $30/month!

Disability Insurance

Another type of insurance that I don't currently have, but highly recommend (I'm looking for some!)  is disability insurance.  If you’re hurt and aren’t able to work, who is going to pay your bills and put food on the table?

In my opinion it's important to have own occupation long term disability insurance that will allow you to protect your family in case you are injured and unable to perform your normal work duties.

Quite often you can get disability insurance via your employer at an extremely cheap rate, so check into that first.  After that, you can do a search online to find some affordable rates.

Long Term Care Insurance

Once you're over 60 and still in reasonably good health, you may want to consider getting a long term care insurance policy. If you end up having to go to an assisted living facility the costs can be amazingly high – and if you don’t have insurance it can run through your entire life savings in short order. Having an insurance policy will mean you’re covered and your family protected in case you need to move into a facility.  Hope for the best and plan for the worst!

Are there other types of insurance that you think pare important?  What types of coverage do you have? Tell us your thoughts on insurance in the comments!