From the Experts: Top Tips for Saving Money on Your Insurance
The bottom line when it comes to expert tips for saving money on your insurance is: do your research and don't be afraid to negotiate.
Let’s face it: for many of us, insurance is getting expensive. Insurance rates have a bad habit of creeping upward every year, even when you don’t file claims or make changes to your policy, which can easily make premiums the highest line item in your budget.
So what can you do about it? We asked insurance agents and experts across the country what they thought were the best ways to reduce insurance premiums. Here are eight of their top tips.
Top Tips For Saving Money on Your Insurance
1. Don't stick with one insurer
When your policy ends, don’t auto-renew: take a step back and see what other insurance companies offer you. “The thing is, insurance rates constantly change,” says Sam Lowy, CEO of Life Insurance Star. “So you’ll have a good chance to jump around and eventually find the best deal that suits you.”
Besides—loyalty to one insurance company rarely pays off. In fact, in most cases, you’ll pay more if you stick to one company.
Why? One reason is “price optimization:” your insurer doesn’t believe you’ll switch insurance companies if they charge you more, so they’ll raise your premium by increments over time.
"It may seem easier with everything else going on in your life to just stay with the same insurer year on year,” says Chane Steiner, CEO of Crediful. “But allocating some good time to researching other insurance companies could help you save a lot of money.”
Read more: How to Pick the Right Insurance Company
2. Get multiple quotes
When you do shop around, don’t settle for the first insurance quote you get. The fact is—insurance rates vary widely between insurers, meaning one company may give you a rate that’s significantly lower than the others. You won’t know, however, until you get multiple quotes and compare them.
“Before you just go ahead and pick an insurance company,” George Birrell, CPA and founder of TaxHub advises, “you need to see what other rates and offerings are out there. Once you find this information, you can decide which company offers the best prices for the best coverage.”
3. Use offers to negotiate lower prices
But what if you like your insurance company? Do you have to pay higher rates to get the service you enjoy?
Not necessarily. In fact, even if you prefer your insurance company to all others, you should still look for a better deal. Then, when you find one, use it to negotiate a lower rate with your current insurer.
"Don't be afraid to leverage offers from other companies,” Jake Hill, CEO of DebtHammer, recommends. "If you know you can get your auto insurance for $70 per month from company A, but you like the policy of company B better, tell them the rate you're getting with company A. Agents are often authorized to give small discounts, and they will be more inclined to do it if they think they'll lose you to another company."
4. Bundle, bundle, bundle
If you have car insurance with one company, home insurance from another, and boat insurance from still another, you may be paying more than if you had them all with one company.
Jimmi Lewis from Voi Insurance Solutions agrees: ”Bundling your home, auto and other personal insurance coverages presents one of the best premium reduction strategies available. Discounts of approximately 25% on each policy may be available when you bundle your coverages with the same insurance company."
5. Choose the highest deductible you can afford
Deductibles can be a tricky business. Set your deductible low, and you’ll pay less when an accident happens, though not without a cost: because the insurer will pay more, they’ll also make you pay more in premiums.
That means, if you want to lower the cost of insurance, one quick fix is to raise your deductible, preferably to match whatever you have in your emergency fund.
“We recommend that clients choose as high of a deductible as they can reasonably afford at any moment’s notice,” says Jimmi Lewis of Voi Insurance Solutions. “Increasing your deductible can help reduce your premium significantly, as well as reduce the urge to file a claim for a smaller amount of damage, thereby ensuring future premiums remain low.”
Another option is to change your deductible throughout the year, as Nathan Sanchez of Sanchez Insurance Group recommends. "Change your deductibles seasonally depending on the risk factors. Ask your agent if you can have higher deductibles during lower risk times. For example, if you are not in hail season, increase your wind and hail deductible during that time of year. This will save you money without putting yourself at unreasonable risk.”
6. Drop coverage you don't need
You don’t always need an insurance policy with all the bells and whistles. For example, if you drive a car that’s as old as time, you probably don’t need to spend extra money on collision and comprehensive, as the cost of having these policies most likely outweighs the value of the car.
“Many people don't review their automobile coverage levels,” says Jason Krueger of Ameriprise Financial. “Often we see cars with full-coverage even though they have depreciated significantly since the policy was taken out. Consider potentially reducing or eliminating collision insurance if your vehicle has lost a significant portion of its value.”
7. Improve your credit score
"A credit score in good standing can help auto rates stay low," says Michael Gordy of Country Financial. "Pay your bills on time and check for sketchy activity on your credit history often."
Read more: Your Credit Score and Your Insurance Premium
8. Ask about new discounts
Insurance companies offer several discounts, everything from anti-lock brakes to alumni affiliates to discounts for signing a few days before your policy kicks off. Other discounts include:
- Defensive driving course completion.
- Accident-free or safe driver.
- Low mileage.
- Employee discounts.
- Academic or professional organization affiliation.
- Military or federal employee.
- Electronic billing.
How do you know which discounts for which you qualify? "Generally, the VIN of your car will pull up all the applicable discounts," says Jennifer Benson from AutoInsureSavings, "However, ask your agent if you are getting all those that apply."
“Don't forget about smart technology,” Aaron Norris of Property Radar adds. “For example, companies like Alarm.com, Ring, SimpliSafe, Moen, and Belkin have rolled out sensors and shutoff valves for water, which, if they detect a problem, can stop it from becoming a high insurance claim. Having smart technology installed and operating can greatly reduce your premium.”
9. Working from home? Tell your insurer
Lastly, if your job is remote, you can probably get a heavy discount on your car insurance. "If you are working from home, be sure to tell your agent," says Jennifer Benson from AutoInsureSavings, "Your premium should decrease because you are driving less."
Your insurance rate isn’t set in stone. While some things you may not be able to change—like your age and where you live—other things can help you cut your insurance costs. If you’re struggling to lower your premium, hop on a call with an independent insurance agent. They can shop for insurance companies for you, find the best deals, and even help you find discounts for which you qualify.