Find Out Common Questions, Topics and FAQs

Whether it’s for your boat, car, home or life, insurance is a necessary evil. But since its main job is to protect you in the event of a crisis, your insurance policies are probably facets of your budget you don’t pay a lot of attention to or consider when you’re trying to trim some financial fat.

Make this the year you save money on your insurance. These easy-to-implement tips will help you slash your premiums.

The Basics

Before deploying any unusual tactics, experts suggest starting at the beginning with some time-honored “tricks” any savvy shopper should keep in their money-saving arsenal. When it’s time to shop for, or renew, a policy, Frank N. Darras, one of Americas’ top insurance lawyers, says these will help you hang on to your hard-earned bucks.

  • Determine the limits you want on your policy, then get multiple quotes. To ensure you’re comparing apples to apples, ask the agents to give you quotes based on the same or similar deductibles, coverages, etc.
  • Consider purchasing your homeowner, auto and umbrella insurance with the same company, so a multi-coverage discount will apply.
  • Tell your agent about smoke and anti-theft alarms, sprinkler systems and other safety features of your home or auto. These could translate into bigger discounts.
  • Ask for a quote that would pay to replace your belongings or vehicle, rather than pay you based on their depreciated value.
  • Ask your agent what documentation you need to substantiate a claim, in case of damage, theft or fire.

Audit yourself annually

While you don’t want to go through an IRS audit once a year — or once in your lifetime — Byron Udell, chartered life underwriter, certified financial planner, says you should audit your insurance needs annually. “As your needs change, so should your life insurance.” For instance, if you had a new baby, bought a house or even if you’re getting ready for retirement this year, you should talk to your agent to get an insurance-needs analysis.

Read the fine print

Experts agree consumers should do their homework. “Be clear on what you need and make sure the plan you’re purchasing (or purchased) will cover it. Assuming that everything is covered could wind up costing you big bucks in the long run.

Avoid gaps in coverage

We also suggest making sure you’re always covered. “If you have a gap in coverage, you may not be able to qualify for coverage when re-applying for insurance.” That can lead to higher payments when you sign with a new-to-you insurer.

Know your policy

Always read the policy when you receive it and ask your agent to slowly and carefully explain any provisions you don’t understand. Not understanding the fine print can result in you shelling out more than you need to.

Pay up

Many carriers offer discounts of up to $72 a year if you pay your entire premium up front. Some will even slash prices if you go “green” and get your statements online instead of via snail mail.

Beware

Cheap isn’t always cost-effective. Most companies that offer minimum coverage on TV can have maximum premiums. “They just seem lower because of the lower protection they offer. Plus, the minimum coverage could open you up to maximum liability if you’re in an accident.”

Businesses that rent or own property are responsible for that property. Commercial insurance transfers many of the risks associated with that property. Common forms of commercial insurance are similar to types of personal insurance. These include auto insurance, property insurance and liability coverage. If you own and are involved in the day to day affairs of a business you need to make sure the business is protected and your assets are also protected.

Commercial vehicles require commercial insurance. Depending on what types of vehicles the business owns and how many vehicles they own, different types of policies are applicable. If a business owns many vehicles that are essential asset to the daily operation of the company, they will need fleet insurance. Companies that usually require fleet insurance include trucking and transport, taxi and limousine, as well as medical and ambulatory transport companies. An employer, whose employees drive company cars, and sometimes their own vehicle, can use commercial auto insurance to reduce the risk. This can include outside salespeople, executives or pizza delivery drivers. Most personal policies carried by individuals do not cover them when using their vehicle for work purposes, making it necessary for the employer to insure the driver and vehicle.

Businesses that rent, lease, or own property must protect their business from risks associated with the property. Much like commercial auto coverage, commercial property insurance resembles homeowners’ coverage but provides coverage focused on the needs of businesses. If a business is affected by storm damage, fire or water, losses can quickly mount and commercial property insurance protects against this risk. Property insurance protects the owner’s building, outdoor signs, furniture and equipment, inventory, fencing, landscaping, and others’ property. If a business is renting or leasing space property insurance is also available to protect the businesses assets. For example, rental property insurance protects the company’s physical assets against the risks of fire, water or storm damage.

Liability protection protects the company against the negligent behavior of an employee or damages caused by the normal business operation. Liability protection covers medical expenses, attorney fees and damages when you are legally responsible. Commercial insurance companies offer liability protection for professional liability, fire liability, medical payments, premises liability, products and completed operations, employer’s liability, employee benefits liability and employment-related practices liability, and errors and omissions. Commercial insurance needs vary from business to business.

The average monthly cost of homeowners insurance depends on several factors, including the amount of crime, building costs and the likelihood of natural disasters in your area. Other factors include the size of your home and additional structures; the distance from your house to a fire hydrant and fire station; the condition of the electrical, plumbing and heating system; and the features, materials, and construction of your home. Although you cannot change some of these factors, you can still save on home insurance.

Quote for Discounts

Check with the insurance company to see what discounts they offer and determine whether you qualify for them. You may be able to obtain a bundling discount by transferring your car insurance over to the same company that holds your homeowner’s insurance, for instance. Loyalty discounts may be available for customers who stay with the company for a certain period.

Keep Good Credit and Pay On Time

Obtaining and maintaining a good credit score shows the insurance company that you are reliable in making payments in a timely manner. When you have a bad credit score, the insurance company views this as a warning and may charge a higher premium to make up for any potential losses due to nonpayment. If you already have good credit and have received a low premium, take it one step further and set up automatic payments. This can save you the monthly convenience fee and is added proof that you will pay on time. If feasible, pay your premium on an annual basis if it means saving.

Choose a Higher Deductible

Instead of having the lowest deductible possible, consider raising the amount from $250 in the event of damage or a disaster to $500 or $1,000. Raising your deductible can save you as much as 15 to 25 percent on premiums, depending on your insurance company and the amount that you raise the deductible by.

Improve Home and Neighborhood Safety

Most insurers can provide a discount of up to 5 percent if you make safety improvements in your home such as installing a smoke alarm, purchasing a fire extinguisher and installing a deadbolt lock. Insurers can give you an even higher discount for major security additions such as high-tech security systems and shatterproof windows. Prior to making any changes, check with your insurance company to confirm the requirements. Although you may not be able to physically make a change to your neighborhood, you can monitor the changes that have been made. Report to your insurer any new storm drains and extra fire hydrants in your neighborhood, for example.

Nobody likes to pay for car insurance, but in the event of an accident, everyone is glad to have coverage. There are some ways to lower the cost of your insurance premiums simply by paying attention to the features available on a car. The following seven features all save money on insurance costs.

1. Age of Car

Old cars break down, and breakdowns cost money. Because of this, youth is beauty in the eyes of insurance companies. For cars younger than five years old, the cost of insurance is generally lower than on older cars.

Insurance companies charge based on risk, and older cars are at a much higher risk of having mechanical failures than younger cars. While there are certainly other factors to consider (as a brand new Mercedes will be FAR more expensive to insure than a ‘92 Grand Am), in a world where all things are equal, newer cars are a cheaper bet.

2. ABS

Though it seems like a common and outdated safety feature, Anti-lock brakes are still the bee’s knees in the hearts of insurance agents everywhere. Not all cars offer ABS standard, and many of the used cars on the road do not come equipped with them.

Because of this, the risk of losing control of a car in icy or high-speed conditions is much higher, and therefore so is the risk of having a serious accident. Aside from the fact that there is no greater feeling than an Anti-lock foot massage when hitting that red light too quickly, this feature also saves drivers money.

3. Airbags

Though driver-side airbags are pretty standard in most cars manufactured today, passenger and side-curtain airbags are still relatively new features that should definitely be added whenever possible. Many drivers don’t think about the fact that insurance claims cover all of the people in the car at the time of an accident.

Because of this, additional airbags for additional passengers, from both head-on and sideways collisions, greatly reduce injuries sustained during serious accidents. Car insurance companies love phrases like “greatly reduce injuries,” which is why adding these features will pay off in the long run.

4. Crash Test Ratings

Crash test dummies are trail blazers, pioneers, and in many cases, insurance God sends. The performance of a car in an accident greatly affects the amount of money required to ensure it. For cars with five-star crash test ratings, insurance companies can rest easy knowing that the passengers will most likely be safe.

For cars that tend to roll over at high speeds, snap necks in rear-end collisions, or spontaneously combust while sitting in traffic, the outlook is slightly bleaker. As a rule; the safer the car, the lower the premium.

5. Anti-Sleep Alarms

An incredibly new development in car safety technology, these sleepy sensors can save lives and money. While the technology behind each system varies, most insurance companies agree that these systems are an amazing leap forward for safety innovation.

Lexus & Saab’s systems monitor the eyes of the driver, while Volvo and Mercedes are activated by changes in the position or performance of the car. Whichever the system, drowsy drivers are jolted awake, kept alive for another day to spend their insurance savings however they please.

6. Alarm/Anti-Theft Systems

To install, give all parts to somebody else

Not all accidents happen while drivers are inside their car, which is why the addition of an alarm system makes insurance companies very happy. Particularly for expensive vehicles, or for vehicles in high-theft areas, adding an alarm to a car will greatly reduce the risk of theft, thereby greatly reducing the risk of an insurance company having to pay thousands of dollars for a new ride.

Plus, it’s an easy way for older cars to upgrade to new features, like remote start and keyless entry. PLUS, it’s a great way to find your car in the parking lot of the mall.

7. Spoiler(less)

Spoilers look cool, and make cars go faster (somehow), but that little piece of fiberglass can cost much more than it’s worth in the long run. Once a car has a racing fin added to its backside, it instantly enters the category of “sports car.” Regardless of how new or safe this car may be, a sports car is always more expensive to insure than a regular sedan.

Because sports cars are often driven recklessly, they carry with them a tremendous amount of risk and therefore are more expensive to insure. While this feature may only cost a few hundred dollars at the dealer, chances are it will add a few hundred dollars to your annual premium as well.

Conclusion:

Although safe driving, a clean record, and experience are often the most reliable ways to enjoy a low insurance premium, checking for these features may be the easiest. By keeping your car safe and protected, even if it means making a small investment in the short run, it will keep your premium low, paying dividends in the long run.

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