How to Save Money on Insurance Without Losing Coverage

November 27, 2021

Let’s be honest – insurance is a necessary evil. We all need it, but the costs can really add up. The goal isn't to avoid insurance, but to make sure you're getting the best possible value for your money. You might think you have to accept the premium as is, but that’s simply not true! There are plenty of ways to cut your costs without sacrificing the peace of mind that comes with having adequate coverage.

So, how do you do it? Here’s a breakdown of effective strategies:

1. Shop Around – Seriously!

This is the single most impactful thing you can do. Don't just stick with the same company year after year. Insurance companies compete fiercely for customers, and rates can vary dramatically. Get quotes from at least three different providers for each type of insurance you need – auto, homeowners, life, etc. Online comparison tools can be a great starting point, but don’t rely on them exclusively.

2. Increase Your Deductible

This is a classic savings tip, but it’s worth emphasizing. Your deductible is the amount you pay out-of-pocket before your insurance company starts to cover the rest of a claim. Increasing your deductible will significantly lower your premium. Just make sure you can comfortably afford to pay that amount if you need to file a claim.

3. Bundling Your Policies

Many insurance companies offer discounts if you bundle multiple policies with them. For example, bundling your auto and homeowners insurance can often result in a combined discount that’s greater than the sum of the individual premiums.

4. Credit Matters

Your credit score plays a surprising role in insurance rates. Companies use credit scores to assess risk, and those with better credit typically receive lower premiums. Check your credit report and work on improving your score if possible.

5. Review Your Coverage Needs

Don’t just automatically assume you need the highest level of coverage. Are you underinsured for your auto, for example? Do you really need replacement cost coverage for your home, or would extended replacement value suffice? Talk to your agent about your needs and ensure you're not paying for coverage you don’t need.

6. Discounts, Discounts, Discounts!

There are tons of discounts available. Here are a few common ones:

Safe Driver Discount: A clean driving record is key.
Good Student Discount: For young drivers.
Home Security System Discount: Many insurers offer discounts for homes with security systems.
Affiliation Discounts: Some companies offer discounts through professional organizations or employers.

7. Regularly Review Your Policies

Insurance needs change over time. As your circumstances evolve (e.g., buying a new car, moving to a different location, having children) your insurance needs will also change. Review your policies annually to ensure they still meet your requirements and that you're still getting the best possible rate.

Important Note: While these strategies can help you save money, don’t compromise on essential coverage. Make sure you’re still protected against significant financial risks.

Do you have any tried-and-true insurance saving tips?