Making Smart Savings Choices
In today's unsettled economy, many people are looking for ways to stretch their money—but sometimes this includes altering insurance coverages to dangerously low levels or eliminating coverage entirely. If you’re thinking about changing your coverage to save money, consider these key issues below — and give us a call. We can help make sure you’ve got the right protection at a price you can afford.
- Make sure you’re getting the appropriate discounts and credits: Most insurers offer a variety of policy credits and account discounts that can translate into significant savings — without endangering the level of protection you need for your home, autos and other valuable property. And often, if you purchase multiple policies through the same insurance company, you’ll receive further discounts. People who own motorcycles or boats and who complete approved safety courses can qualify for discounts, and families with teen drivers who earn good grades in school may qualify for auto policy discounts.
- Increase deductibles for cost savings: Only a small percentage of homeowners have claims in any given year, so you might consider increasing your deductible. The higher the deductible the lower the insurance premium. The savings between a $250 deductible and a $1,000 deductible can be several hundred dollars depending on your insurance carrier.
- Specialty lines coverage options: Own a classic car or RV? If their use is seasonal, you can typically reduce your coverage to liability only during the off-season, then add full coverage only when you are actually using the vehicle
- Full payment on policy: Depending on your financial circumstances, you may be able to make lump-sum payments instead of partial premium payments, such as monthly or quarterly. Partial payments often include small transaction fees, so paying the full amount can eliminate those extra costs.
- Consider Your Car Choice: You may have to pay higher insurance premiums for vehicles that have high theft rankings or low safety rankings. You will also pay more for newer, more expensive vehicles.
- Maintain a Clean Driving Record: If you have a clean driving record, you will have lower insurance rates because you will be considered a low-risk to the insurance company.
- Bundle Packages: Many insurance companies will provide a discount for combining your car insurance with your homeowners insurance. Also, you may receive discounts if you own more than one vehicle or recreational vehicles as well.
- Maintain a Good Credit Rating: The better your credit score, the lower your insurance premiums will be.
- Older Vehicles: If you own an older car, you might want to consider what your rates will be if you drop collision and/or comprehensive coverage. If your vehicle is worth less than 10 times your insurance premium, you might want to save money by dropping collision and/or comprehensive coverage.
Some decisions to avoid
It is just as important to understand what notto do as you look for cost savings. Here are some scenarios you should avoid:
- It may be unwise to carry only the minimum state-required amount of uninsured/underinsured motorist coverage on auto policies, or to cancel it entirely if it is not required in your state: According to the Insurance Research Council (IRC)*, the correlation between the percentage of uninsured motorists and the unemployment rate is high — when the economy is struggling, more people go without insurance. You want to make sure you’re protected in this instance.
- Ignoring renters insurance: This coverage is often overlooked no matter what shape the economy is in. Landlords’ policies generally only cover the structure, not the individual renters’ contents. Imagine having to replace furniture, clothing and other personal property out of pocket because you excluded this essential, affordable coverage and then suffered a devastating loss from a burglary or other covered event.
Saving money is important, but so is making sure that what you’ve got is protected. If you’re looking for ways to save, or want to review your coverages, give Carriage Insurance a call!
*Insurance Research Council, January 21, 2009