How to Lower Your Insurance Costs

States require you to have auto insurance. Life insurance is imperative if you have people depending on your income. Home owner’s and renter’s insurance is also a must. With all these types of insurance, how can we save money? We’ve dug around and found a few ways that you can save some money on your insurance. We hope you find these tips helpful.

General Insurance (Home, Car, and Life)

1. Shop Around

Prices vary from company to company and state to state, so it pays to shop around. Get at least three price quotes from three different companies before you choose one. You can call companies directly or access information on the internet. Your state insurance department may also provide comparisons of prices charged by major insurers. Go online and check out different company websites but be careful not to share too much information.

2. Use an Insurance Broker

Just like a mortgage broker, an insurance broker searches many different companies to find you the best rates. For their trouble, a fee is paid to them, a sort of commission, from the company you choose. You get to shop the rates and get the best price. Plus, it’s all in one place so the rates are easy to compare. You can use an insurance company’s agent but they get paid on a commission-like basis, too.

3. Pick only companies that are financially stable

This may or may not save you money right now but it definitely will in the long run. You don’t want to be paying monthly fees to Joe’s Insurance just to find out that, when you finally need them and file a claim, they have no real money and your investment in their coverage was just a waste of money. Looking at the financial rating should be a good way to check this out. They grade companies like schools grade students: A is better than B, for example. You can check grades at Standard & Poors or at AM Best.

4. Ask for recommendations 

Ask friends and family who they use. My son gave me the name of his car insurance company and I saved hundreds of dollars switching over with the same great coverage. Look online at the Better Business Bureau or on review sites such as Yelp.

5. Ask for higher deductibles

A deductible is the amount of money you pay when you have a claim. The lower your deductible, the higher your insurance payments. The higher the deductible, the lower your insurance rates. Raising a deductible on your car insurance, for example, from $200 to $500 can reduce your payments by 15-30%. Going up to $1,000 can save 40% more than that. The only caveat here is that you know you’ll have that amount in the bank if ever you need to file a claim. Make sure it’s no higher than your savings account’s average.

6. Keep a good credit score

The higher your credit score, the lower your rates. This is because someone did a study that showed people with lower credit scores got in more accidents. It then became common practice for insurance companies to begin checking your score and base your rate on your score. The same is true for people with higher grades. They tend to have fewer accidents. We’ll tell you more about that in a moment.

7. Bundle your insurance

Just like bundling your home phone and internet might save you money, so does bundling all your insurances together. For instance, Geiko offers a multi-car discount as well as large discounts if you get auto insurance and home owner’s insurance with them. Most major insurance companies do, too. Just shop around and ask a lot of questions on how to save more money.

8. Being a Long Time Customer

Some insurance companies give discounts to long-time customers. While this is great, don’t be afraid to, in fact, I encourage you to, go out and shop other companies at least once a year. I had State Farm for nearly 30 years and thought I was getting a great rate. I had called AAA a few times, as well as Progressive. They couldn’t beat my rate. However, to my surprise, Geiko saved me (I’m having dejavu) hundreds on my car insurance (Is there a camera around?).

9. Ask about Group Insurance

Some companies offer group insurance rates to their employees as do some membership clubs and organizations. Ask around at work, at church, or even at the membership club you shop at. There may be a group plan you can join.

10. Be on the lookout for other discounts

There are discounts for student drivers with good grades. There are discounts for people who haven’t had an accident in years. You may also get a discount for taking a defensive driving course. You can get a discount on your car while your child is away at college (not using the car, of course). Just look for discounts and ask about discounts. You would be surprised. Sometimes you get a discount because of the company you work for. The point is, you have to look and you have to ask.

Car Insurance Only Tips

1. Reduce the coverage on older cars

Although I have three boys and I could make some arguments against doing so, other experts advise reducing the coverage for older model cars. While it is true that an older car may only be worth $3,000 in an accident, some people think that they would just rather trash the old and get a new one if they were in an accident. I, however, disagree to a point. I have a son whose car was stolen while parked just off-campus. Luckily, I had full coverage and was able to get the car replaced. I have another son who rolled a car that my husband had lowered the insurance on. That car was totaled and not replaced. So, keep in mind the state minimum requirements and whether or not you need that little, old hunk-a-junk. A good rule of thumb is if the car’s value is worth less than 10X the premium, your coverage may not be cost-effective. Get your car’s value on Kelley Blue Book.

2. There are low mileage discounts

If you work at home or have a car that stays home, that car may not get the mileage that another drive-to-work-and-back car gets. If your car isn’t driven often, ask about a “low mileage discount.” This is great for elderly parents who just like to stay put or get chauffeured around most of the time. Their cars are no longer getting the miles put on them that they used to.

3. Compare car insurance costs BEFORE you buy

We make a decent living, so I’ve had some expensive cars in my garage. However, over the years, I’ve learned to not be as impressed with the make of the car as with the model. I avoid 2-door vehicles like the plague. Why? Car insurance. If you have a little sports car with two doors, you have a high car insurance payment. Not only that, in our state, your tags are based on the value of the car. The more the car is worth, the more you will pay for your tags each year, and the more you will pay for your insurance. So, before I go car shopping, I call my insurance agent and get some quotes on the make, model, and year of car I’m thinking about getting. Then, and only then, do I start shopping around.

Michelle R Russell

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