Insurance is one of those things most of us dread paying for, but we never want to be caught without it.
While you do need it, there are ways you can save on all of the different types of insurance you need to carry, and the following tips can help you.
Auto Insurance
One of the best things you can do to save money on your insurance policies is to shop around regularly. Even if you have coverage, take the time to make sure you can’t get a better price elsewhere.
This, of course, includes shopping around for auto insurance and making sure you’re getting the best rates.
If you have good credit and good driving history, you can save more than $100 a month on average if you go with the cheapest insurer in your state versus the most expensive.
What if you’ve recently had an accident? Premiums may increase up to 73% after an accident, but there are still things you can do to save money.
You might actually be able to save more than $200 a month if you were recently in an at-fault accident, as long as you shop around for the cheapest insurer in your state.
Don’t think that one company across the board will offer the cheapest rates no matter what either. For example, in one state, a company might have the cheapest rates and in another they may be the most expensive.
There’s not necessarily any consistency between companies when it comes to insurance prices, which again highlights the importance of shopping around.
Make sure you’re only paying for coverage you need as well. If you drive an old car, for example, you probably don’t need comprehensive and collision insurance. Do the math to make sure your car isn’t worth less than your deductible plus whatever you pay for your yearly coverage.
Many people don’t realize their credit score also affects their car insurance rates, so clean up your credit history if possible.
Health Insurance
Health insurance is for many Americans their biggest expense. The costs are always going up, and the average family in 2017 paid more than $7,100 in health insurance premiums. That doesn’t include out- of-pocket expenses.
The total medical costs for the average American family of four included premiums paid by the employer and employee, and out of pockets come to $27,000, with the average employer-sponsored plan.
So what can you do?
First, make sure you truly know what your options are at work. If your workplace offers health insurance benefits, start there. If you’re self-employed or your employer doesn’t offer workplace benefits, you need to learn how the different plans work.
A lot of people aren’t that knowledgeable about health insurance, so they may choose the wrong plan, which can cost them more money than they need to be paying.
For example, there are four types of networks: HMOs, PPOs, POS, and EPOs. There are tiered plans, and there are high-deductible plans.
Again, get to know what each offers and what you and your family truly need.
You can also take advantage of a Health Savings Account to save money. An HSA lets you contribute money to a savings account that can be put toward health care costs tax-free.
You can take advantage of tax-free contributions, and also lower monthly premiums will help you save money. You can also roll your contributions over year-to-year and you can grow your funds through investment.
If you can stay in-network when you do receive health care, that’s an important way to save money.
You might consider working with a health insurance broker too. They can help you understand the implications of different types of insurance and also compare plan options. An expert will show you how your costs will be impacted by deductibles and co-pays and help you figure out what’s in your best interest.
Other Tips To Save On Insurance
Other general tips to save on insurance, including homeowners’ insurance, include:
• Always make sure you’re buying what you need. This tip has been repeated above, but it’s a mistake a lot of people inadvertently make. You don’t need to be over-insured when it comes to your auto insurance, your home, or your life insurance. You will pay more in premiums and that doesn’t mean that you’ll get a bigger payout if you make a claim.
• Combine coverage when you can. Insurance providers want to incentivize you to purchase multiple policies from them, so take advantage. For example, you can combine your home and auto insurance in many cases, and you may be able to add your life insurance into that as well.
• Pay yearly. Yes, you’re going to pay more, but you’re going to save money. When you make monthly payments, the insurance company is going to charge you fees. If you can pay all at once, you’ll avoid having to pay that.
• There are safety features you can have on your home and car that will lower your insurance costs. For example, on your car, having certain driver safety features will be helpful, and at home, things like a home alarm system may help you save money.
• If you’re a member of any groups, such as professional groups, you can see if they offer you insurance discounts or preferential rates.
• Try to find insurance with longer terms for lower premiums. Typically you renew car and home insurance annually. Other types of insurance have different terms, and if you go for a longer term, you can save money. An example is life insurance. A 20-year life insurance plan can help you save money as compared to a 10-year plan.
If you’re getting close to renewal date, it’s a good financial idea to do some shopping. There’s almost always an opportunity to save money on insurance if you take the time to look.
