Most people are always looking for ways to stretch their money and to save a little bit extra wherever they can. When cutting expenses, often times we look to our insurance policies to see if we can save on premiums. Sometimes this includes altering insurance coverages to dangerously low levels or eliminating coverage entirely. If you’re thinking about changing your coverage to save money, please consider and weigh the following cost saving factors and options.
- Make sure you’re getting the appropriate discounts and credits: Most insurers offer a variety of policy credits and account discounts that can translate into significant savings — without endangering the level of protection you need for your home, autos and other valuable property. And often, if you purchase multiple policies through the same insurance company, you’ll receive further discounts. People who own motorcycles or boats and who complete approved safety courses can qualify for discounts, and families with teen drivers who earn good grades in school may qualify for auto policy discounts.
- Increase deductibles for cost savings: Only a small percentage of homeowners have claims in any given year, so you might consider increasing your deductible.
- Consider a Usage-based insurance program (pay as you drive): Auto insurance premiums are determined by how safely, and how much, customers actually drive.Most of the programs involve a small “telematics” device that you plug into your car’s diagnostic port, which is located under the dashboard, usually on the driver’s side, or a mobile app you install on your phone. Read more about the carrier programs here.
- Specialty lines coverage options: Own a classic car or RV? If their use is seasonal, you can typically reduce your coverage to liability only during the off-season, then add full coverage only when you are actually using the vehicle
- Full payment on policy: Depending on your financial circumstances, you may be able to make lump-sum payments instead of partial premium payments, such as monthly or quarterly. Partial payments often include small transaction fees, so paying the full amount can eliminate those extra costs.
Some decisions to avoid
It is just as important to understand what not to do as you look for cost savings. Here are some scenarios you should avoid:
- It may be unwise to carry only the minimum state-required auto liability limits on auto policies. Saving a small amount of money for low limits of liability in the short-term, could cost you up to hundreds of thousands of dollars in the long run if a disastrous accident occurs. Read more about the importance of adequate liability limits HERE.
- Ignoring renters insurance: This coverage is one of the most overlooked insurance policies. Landlords’ policies generally only cover the structure, not the individual renters’ contents. Imagine having to replace furniture, clothing and other personal property out of pocket because you excluded this essential, affordable coverage and then suffered a devastating loss from a burglary or other covered event.
Saving money is important, but so is making sure your property and belongings are protected. We truly want to protect the assets and financial security of our customers and highly encourage you to review your limits and/or call our office to make sure that you are not only saving the most you can, but are also covered adequately. Our insurance team would love to speak with you and assist you with any questions or concerns you may have. It’s our job to make sure our clients not only save money, but are covered properly as well.