Insurance policies are often expensive and unpredictable because insurance providers decide how much to charge for a cover based on several variables. Consequently, it is often a challenge to navigate your insurance bill to find ways to reduce them. Here are some ways to cut the amount you remit for your insurance coverage.
An excellent way to save on any insurance policy is to shop around. Premiums vary widely among insurance providers, even for the same coverage. Some insurers have higher costs than others do for a particular policy or age group. Get quotes from various policy providers and compare their rates. However, cheap does not always translate to a good deal; check other factors like creditworthiness and the insurer’s financial strength.
Raise Your Deductible
Deductibles refer to the money that one pays before the insurance provider begins to insure. Choosing a higher deductible on your insurance can significantly lower your premium expenditures. However, you will need to set aside enough money to pay the higher deductibles. Thus, if you are in good financial shape, increasing your deductibles will lower your premiums but retain your cover in case of significant damages.
Paying for your auto insurance in a lump sum is cheaper than paying monthly payments. When you pay monthly, it becomes a loan with interest. Due to the significant upfront cost, it is sometimes impossible to pay the annual amount in one go. An excellent solution would be to pay on a zero percent credit card and clear the balance before the end of the interest-free period.
Weigh the Pros and Cons of Guaranteed Issue Policies
Some insurance companies offer guaranteed issue policies for a higher premium. For instance, life insurance without a medical exam is likely to cost more than a conventional policy. Due to the ease of getting coverage, a guaranteed issue policy may appear like a good deal. However, insurers often assume that those who apply for this cover may have existing medical issues. If you are healthy, a conventional cover with medical underwriting would be a good deal. The guaranteed issue policy may be the only option if you have health issues.
Smoking can reduce your life expectancy and raise your insurer’s risk of having to compensate for a death benefit. Consequently, the life insurance rate for a smoker is usually twice or thrice more than that for nonsmokers. Policy providers often check for evidence of nicotine in the bloodstream during a medical examination. You can get a lower coverage rate by quitting smoking. However, you need to quit smoking for over a year for insurers to consider you a nonsmoker.
Bundling insurance means purchasing more than one policy from the same insurance company, often at a discount. If you have a life or homeowner’s policy, check with the company how much you would save by including all your policies under one roof. Bundling your policy can save you as much as ten percent or more. However, just because a policy provider offers a bundle discount does not imply they are the best option. You will still prefer that the company you already hold policies with will offer the most affordable bundled cover.
Buy a Car with Lower Premiums
While buying a high-end SUV or sports car may sound exciting, insuring these cars is more expensive than insuring a lower-cost commuter vehicle. Insurance providers have different rating classes based on the type of vehicle you drive. This may mean buying a new car or replacing your current high-end vehicle with one that will attract low premiums. Some insurance coverage providers will give a discount if you purchase a hybrid or an alternative fuel automobile.
Do Not Over-Insure Your Home
Do not insure your home for the amount you paid during purchase; insure for the cost that it would take to rebuild the home. The amount you pay when purchasing a home includes the price for the land and the house. Depending on your home’s location and the time of purchase, the price could be relatively higher than the rebuilding cost. You will pay too much if you insure for more. On the other hand, you do not want to under-insure your home. Inadequate coverage may lead to crippling expenses in case of damages.