Cost of Insurance

Insurance is a necessary but often costly prospect. In most states, car insurance is required before you can register your vehicle, and most mortgage companies require you to have homeowner’s insurance. Health insurance is also an important investment, though too often it becomes a casualty of tight budgets.

There are ways, though, to bring down the cost of insurance. Some of these methods are simple, and can save you large amounts of money. Spending a little time researching can save you literally hundreds of dollars in the long run, so it’s definitely worth the effort.

Saving Money on Auto Insurance

There are several ways to shave money off your auto insurance premiums. Among these are:

1. Claim all the discounts you can qualify for
2. Keep your driving record clean
3. Get comparison quotes from several different companies
4. Lower your deductible and remove any unnecessary “add ons” from your policy
5. Drive a car with safety features that qualify you for additional discounts

While most of us are perfectly willing to shop around for a good price on the car itself, we drop the ball when it comes to shopping for the best prices on insurance. There are many sites online where you can submit your basic information and receive quotes from multiple insurance providers. Taking advantage of these tools can help reduce your payments a great deal.

Evaluate your policy periodically to see if you really need the level of coverage you’re paying for. Policy “extras” can also be money-wasters. For example, don’t buy towing insurance if you already have AAA or another form of coverage. Scour your policy for these kinds of additional fees, and don’t be afraid to ask for more information if you don’t know what part of your policy means, or what exactly you’re paying for.

In an even more basic approach, be careful when you’re behind the wheel. Usually, when your rates are increased, it’s because you’ve gotten a ticket or been in an accident. So just being a careful, law-abiding driver can help you keep those premiums down.

Saving Money on Homeowner’s Insurance

Shopping around can help you save on your homeowner’s insurance, as well. Other money-saving tips include:

Raise your deductible. If you can afford to contribute $1,000 or more to emergency home repair, raise the recommended $500 deductible. It’ll save you money in the long run.

Insure your house, not your entire property. The appraised value of your home reflects the value of the property. The replacement value, which is how you want to calculate your insurance, covers the house alone. Don’t misinterpret these values and end up buying more insurance than you need.

Use a single provider. Most insurance providers will offer a discount if you purchase auto and homeowner’s insurance from the same provider.

Take advantage of insurance credits. Many providers offer discounts if you have an alarm system, a smoke detector, or if you’ve upgraded your house to better weather storm damage or, in applicable areas, earthquake damage.

Saving Money on Health Insurance

The best way to reduce your health insurance rates is to subscribe to a group plan. The majority of people with health insurance subscribe to group health insurance plans that are partially subsidized by their employers. With this kind of plan, you have a number of options for coverage and deductibles, and can usually find an affordable option that fits your needs.

But what if you’re self-employed or your employer doesn’t offer health insurance? More and more of us have to face this situation as companies, especially small companies, cut back on group health insurance in order to reduce operating costs.

As with any insurance, shop around. Premiums for health insurance vary greatly from company to company and from plan to plan. By increasing your deductible, increasing co-pays, or taking advantage of special programs for those who don’t visit the doctor very often, you can reduce your monthly premiums.

Be careful, though. If your deductible is too high, any condition requiring hospitalization could put an unmanageable dent in your bank account. And if you see the doctor more frequently than once or twice a year, higher co-pays could also be a financial burden.

Other options to consider:

Purchase prescriptions through mail order. Many insurance programs offer this option, with a much lower cost for regular medications.

Avoid the emergency room. Visiting the ER is an expensive proposition, as is riding in an ambulance. Save these trips for absolute emergencies.

Consider a Health Savings Account. A relatively new addition to the health insurance lineup, an HSA provides a different approach. Generally offered with a high deductible plan, it allows you to save money, usually through your employer, to hedge against expensive medical costs. “This lets employees choose,” says Jim Edholm, president of Business Benefits Insurance. “They can pay more for the richer plan or to reduce their premium by choosing the higher deductible HSA plan.”

Join an alternate group. Other groups besides your employer’s group plan can offer reduced rates on insurance. For example, if you’re self-employed in a specialty field, often an organization focused on your specialty provides a group program. For example, the Writers’ Guild West offers group insurance plans. A little research in this area can save you a good deal of money in the long run.

Related posts:

  1. Choosing Insurance Coverage
  2. Paying too much for insurance?
  3. Need Car Insurance
  4. Homeowner’s Insurance
  5. Want a $10 Rolex and a no-closing-cost mortgage?

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