While commercials for the nation’s largest insurance companies will tell you that shopping for insurance (and preferably with them) is your best bet toward saving serious money, there are other, less-difficult ways to save more than a few dollars.
It’ll take understanding how insurance works, knowing what risks you are willing to assume and reading over your policies.
1. Look for discounts, discounts, discounts. After my insurance agent retired last year, I was surprised when the new agent revealed that I was eligible for some discounts I hadn’t been receiving. Insurance companies not only offer discounts for multiple policies (like home and auto), but they also might give you a break for, say, installing smoke alarms, hooking up a security system, maintaining a safe driving record and focusing on good grades in school. One big surprise? Don’t assume that having all of your insurance policies through a single company is your best option. When I was a financial advisor, I found many clients saved money by foregoing the multiple-policy discount and instead focused on finding companies that quoted the best rate for only the home or auto.
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2. Manage deductibles. By raising the amount you’ll pay out of pocket, you can seriously drop the amount you’ll pay for coverage. On car insurance, think about your driving record. If you have a clear record, why pay for insurance you won’t use? Remember though, that the deductible is the portion you’ll pay if something bad happens, so build your cash reserve before raising any deductible. Because homeowners claims are relatively rare, your best opportunity might be to raise the deductible on that policy.
3. Eliminate duplicate coverage. Do you have towing or car rental insurance through an organization or auto club? Read through your auto insurance policy to ensure you don’t have the same coverage listed through your insurance carrier.
4. Verify your coverage levels. Sometimes people carry unnecessary levels of insurance on cars that aren’t worth covering, or on structures that might not exist anymore on your property. If you have money in the bank and would replace your vehicle if it were in an accident, why would you have more comprehensive coverage? Similarly, with your home, why cover more than the structures are worth? In general, it’s a great idea to read through both your auto and homeowners coverage levels. For example, if you have an umbrella liability policy, you may be able to cut back the amount of liability coverage on both insurances.
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5. Call around on your birthday. While you might not score deals by randomly shopping around, there are specific times and events when reviewing your carrier makes sense. A reliable insurance agent once told me that different insurance companies price products to chase target demographics. While your current insurance company might be aggressively competitive with 25-year-olds, it might be the most expensive option for 60-year-olds. So as you age, move or buy a new car or home, ensure your insurance company is competitive by calling around to see what competitors offer.
6. Ask the insurance company what you’re missing. Whether you’re working with a phone agent or local person, the expert on your insurance policy is the woman or man selling it. While you may want to avoid a sales pitch by not talking to an agent, you also might miss out on some good savings. Insurance agents know which organizations provide discounts, they know the best way to handle claims and they can also point you in the right direction when it comes to coverage levels. If an insurance agent can’t do any of these things, it might be time to shop for a new company.
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Here’s something to watch out for: Sometimes what appears to be a good deal really isn’t your best deal. Sometimes insurance agents will present deals that really aren’t. Because insurance agents understand their product, they can often lower coverage levels to make you believe you’re receiving a better quote, when in reality you’re just buying less insurance. Buying less insurance might be a good move, but if you’re going to shop insurance companies, first shop apples to apples and then ask the agent how you might be able to get a lower rate.
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How to Find Hidden Deals in Your Car and Homeowners Insurance Policies originally appeared on usnews.com
