According to the Insurance Research Council (IRC), a growing number of people are dropping their insurance coverage in an effort to save money. This financial strategy will undoubtedly loosen a tight budget, but it can also leave the uninsured vulnerable to catastrophe, lawsuits, and other problems that may be financially devastating in the long term. Before canceling your insurance, try employing the following tips to save money and keep the coverage you need.
Let’s Save Money On Auto Insurance:
There is a very good chance that you’re paying more for auto insurance than you really need to. One of the easiest ways to save money is by making sure you are getting all of the discounts you are eligible for. Some of the most common discount categories include:
- Multi-Policy Discounts – If you insure your auto and your home under one policy, you could qualify for discounts as high as 20%. You may also be able to get a discount by insuring multiple vehicles under the same policy.
- Good Driver Discounts – Good driver discounts are often given to drivers whose records are free of accidents, tickets, or other driving infractions.
- Good Student Discounts – Not every insurance provider offers this discount, but it is worth inquiring about if you are enrolled in a college, university, or education program.
- Low-Risk Occupation Discounts – There are some insurance providers who offer special discounts to people who work in a low-risk occupation, such as engineer or teacher.
- Age Discounts – Senior citizens frequently get discounts on auto insurance, as do people in other age groups. You should ask your insurance provider about a discount every time you have a birthday.
- Professional Organization Discounts – Being a member of a professional organization, association, or auto club can also net nice discounts on auto insurance premiums. You can ask your insurance provider about potential discounts or talk to your association or employer about group discount rates.
- Safety Feature Discounts – Your car’s safety features can also help you save money. Features that tend to yield the most discounts include anti-theft devices, restraint systems, anti-lock brake systems (ABS), and airbags.
- Renewal Discounts - Long-standing customers who renew their policy every year or every six months with the same company often receive renewal or loyalty discounts.
Assuming more risk can also help you lower the amount of money you spend on auto insurance each month. You will need to keep the bare minimum of insurance coverage required by the law in your state, but you may be able to drop collision coverage (if you car isn’t worth very much) or increase your deductible. Both alterations can lower your insurance rates by as much as 30%.
If adjusting your risk or searching out additional discounts did little to lower your auto insurance rate, you may want to consider shopping around for a better deal. Every company charges different rates. You may be able to get the same coverage for hundreds of dollars less each year through another insurance provider.
Saving Money On Home Insurance:
Unlike auto insurance, there is no law that requires you to have insurance on your home or property. However, this type of insurance coverage is a smart buy–if your house is damaged by a fire, flood, or another catastrophe, you could lose everything. The same is true if someone is injured on your property. And if you have a mortgage on your property, you will most likely be required to carry some form of coverage on your home.
Fortunately, there are many different ways to save money on your home insurance. Discounts are available if you insure your auto under the same policy as your home. You may also be able to lower your premiums by taking the following steps:
- Improve Home Security – Installing smoke detectors, sprinkler systems, burglar alarms, and other safety features in your home can lower you home insurance premiums by as much as 30 percent.
- Make Your Home Disaster Resistant – Making your home more resistant to storms, fires, earthquakes, and other disasters can also help you save a significant amount of money on your home insurance. Adding storm shutters, reinforcing your roof, retrofitting an older home, and updating electrical systems are just a few of the things that insurance companies often reward with a discount.
- Insure to Rebuild - Consider insuring to rebuild. It will cost less to rebuild your home than it did to buy your home because you do not have to pay for the land when rebuilding. In other words, the land under your house is not at risk. Keep this in mind when deciding how much coverage you need.
- Raise Your Deductible – Raising your deductible from $100 to $500 or even $1,000 can save you as much as 25 percent each year.
- Pay Your Premium Up Front – Paying your premium for the entire year upfront may help you save as much as five percent. Having your payment automatically debited from a bank account could also provide additional savings.
- Boost Your Credit Rating – Many companies take credit ratings into consideration when determining premiums. If you have a good credit score, you will pay less. If you have a low credit score, you will pay more. You can try boosting your credit rating or searching out an insurance provider that does not run credit checks to get a lower premium.
- Buy Insurance from a Private Company - People who live in high risk areas often purchase insurance through government plans, but this may not be necessary. If you live in a high risk area, check with several private companies to see if they are willing to insure you. Private insurers often offer lower rates.
You may also be able to save money by comparison shopping. Home insurance providers offer different types of coverage for different prices. Take time to get quotes from several companies to make sure you are getting the coverage you need at a price you can afford.
Guest post from Bailey Harris.