Insurance is vital to financial planning, providing a safety net against unexpected events and losses. However, the associated costs, particularly insurance premiums, can sometimes feel burdensome. The good news is that there are several strategies to manage and even lower these costs. With a bit of knowledge and proactive planning, you can make your insurance work more efficiently, ensuring comprehensive coverage that fits comfortably within your budget. Here are a few tips to help you lower your insurance premiums.
Bundle Your Insurance
Bundling your insurance is a simple yet effective strategy for lowering your premiums. The concept involves purchasing auto and home insurance from the same provider. Insurance companies often offer significant discounts to customers who bundle their insurance policies, as it encourages customer loyalty and streamlines administrative processes. Bundling your insurance is also simpler for your budget. You’ll have fewer companies to deal with, which means fewer bills to pay and less paperwork to keep track of.
Maintain a Good Credit Score
A good credit score isn’t just for getting loans or credit cards; it can also significantly impact your automobile insurance premiums. Some insurance companies use credit-based insurance scores as part of their underwriting process. They have found a correlation between a person’s credit history and their likelihood to file an insurance claim. In theory, the better your credit score, the less likely you are to file a claim, which leads to lower premiums. To maintain a good credit score, pay your bills on time and limit new credit applications when possible.
Increase Your Deductible
The deductible is the amount you are required to pay out-of-pocket before your insurance coverage kicks in when you file a claim. Generally, the higher your deductible, the lower your premium. This is because when you choose a higher deductible, you take on a larger share of the risk, reducing the risk for your insurance provider. In return for accepting this higher level of risk, the insurer charges a lower premium. However, while a higher deductible can save you money on premiums, ensuring the deductible is still affordable is essential. You should only choose a deductible that you could comfortably pay in the event of a claim.
Take Advantage of Discounts
A wide range of discounts may be available to you from your insurance provider that could significantly reduce your premiums. However, these discounts are often not automatically applied, so you must ask your insurer about potential savings opportunities. Here are some common types of discounts:
Mortgage Free Discounts – Paying off your mortgage can land you a mortgage free discount.
Bundling Discount – Combining auto and home insurance with the same provider can often earn you a bundling discount.
Telematics Discount– A program that evaluates your driving habits and rewards good driving. You can save up to 25% with this discount.
Non-Smoker Discount – Being a non-smoker can often reduce your premiums for life and home insurance.
Water Discounts- Save on your water premiums by taking preventative measures such as installing a tankless water heater or installing a sump pump with alarm and battery backup.
Loyalty Discounts – Some insurers offer discounts to long-term customers to show appreciation for their loyalty.
Discounts for Paying in Full – Some insurers may offer a discount if you pay your annual premium in one lump sum instead of monthly payments.
Review and Update Your Policy
Just as life changes, so do your insurance needs. Regularly reviewing and updating your insurance policy is crucial to ensure you are adequately covered and not overpaying. Major life events, such as buying a new home, getting married, having a child, or starting a new job, can significantly change your insurance needs. Or, if you’ve made improvements to your home or purchased valuable items, your existing policy may not provide adequate coverage. Review your insurance policies at least once a year or whenever significant changes occur in your life to ensure you have sufficient coverage.
Managing your insurance premiums doesn’t have to be an uphill battle. With informed choices, proactive habits, and strategic planning, you can optimize your coverage while keeping your premiums manageable. Keller & Associates Insurance Brokers can help secure peace of mind, knowing you’re well-covered without overstretching your budget. Contact us to learn more about affordable insurance options that meet your needs.