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.
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.
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.
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.”