This article provides tips for lowering insurance premiums. Insurance premiums can contribute to a significant portion of a household’s budget. Although prices are set by individual insurance companies and states’ regulations, consumers should take extra steps to save money when looking for the best policy for their needs.
1. Consider Higher Deductibles for Lower Premiums One of the most effective ways to reduce insurance premiums is to increase the deductible. A deductible is the amount of money a policyholder must pay out of pocket before coverage kicks in. The higher a policy’s deductible, the lower the monthly premium payments. Before choosing a higher deductible, analysis should be done to make sure the savings is worth the risk of having to pay the higher amount if needed. For example, if a policyholder needs to file a claim for $1,500, and the deductible is $500, they will only be responsible for the $500 and the policy will cover the $1,000 difference.
2. Bundle Home & Auto Insurance Insurance companies offer discounts if a policyholder has multiple policies with them. Many companies offer bundle discounts – discounts for those who have home and auto insurance with the same company. Bundling policies could lower annual premiums between 10 to 25 percent. Consider the total costs of the policies and make sure there is a good balance between the cost of monthly payments and the coverage offered.
3. Stay Insured with the Same Company Remaining with an insurance company for the long term is another cost-saving tip for reducing premiums. Insurance companies often reward customers for being longterm policyholders. Additionally, they might also offer discounts for simply staying with them for extended time frames. Carefully consider all policies available and look out for discounts offered for long-term customers.
4. Improve Credit Score Having a good to excellent credit score could be beneficial for insurance premiums. Many insurance companies believe a higher credit score means people will be more likely to pay their premiums on time. As a result, they may charge lower premiums for policyholders with better credit. However, since credit score policies vary from insurance company to insurance company, it is important to speak to agents about the pending premiums prior to signing a policy.
5. Pay in Full Discounts Some companies will offer discounts if policyholders choose to pay their annual premiums in full. Before taking advantage of these discounts, it is important to consider one’s actual budget. Paying in full could be convenient, because a policyholder will not have to worry about paying bills throughout the year.
By following these tips, a policyholder can potentially lower their insurance premiums, retain a quality policy for their homes and auto needs, and save money in the process. Consumers should check with their state’s department of insurance for more information on regulations, consumer protection, and additional cost-saving tips.
