Saving Money on Any Insurance

by David Ning · 12 comments

There are some forms of insurance you just can’t live without. Car insurance is mandatory in all states, homeowners insurance is required if you carry a mortgage, and any parent will tell you that medical insurance is crucial. With rising costs hitting all of these necessary protections, it pays to make the most of every dollar.

Car Insurance

Since you have absolutely no choice about having car insurance, you may as well shop around to find the best deal. I know that there are many advertisements trying to entice you to change companies, but before you do that, compare what you are getting right now to what they are offering. Frequently companies “save” you money by providing lesser coverage; in my book that is no savings. Shop around and do it early, insurance companies will almost always match any legitimate offers you find.

The quickest and easiest way to drop those premiums is to raise your deductible. By increasing your deductible from $200 to $500 dollars, you can save 30% on your insurance premiums. Make sure to set aside the money needed if you do have an accident and need to produce the higher premium.

Ask about discounts. Teen drivers usually get a discount for good grades or certain types of driver’s education programs. If you don’t drive much, or your job is just a couple of miles from home, you may be able to get a low-mileage deduction. Also, consult your insurance agent when purchasing a new car so you know in advance which ones cost less to insure. Some companies offer lower deductibles for each year you go without having a claim, so make sure you ask that because it could save you money long term.

Homeowners Insurance

Just like auto insurance, increasing your deductible will decrease your premiums. Many companies will offer discounts to customers who purchase multiple policies with them, so bundle your car and homeowners insurance to save some money.

Only insure your home, not the land for replacement costs in case of disaster. This common mistake costs many people money. You won’t have to replace the land, just the building, so check your policy to make sure you are insuring only what you need.

Another thing to consider is staying with a company for the long haul since many offer loyalty discounts. Improving your home’s security and disaster resistance will generally garner you some deductions as well.

Medical Insurance

Many people simply can’t afford private medical insurance. Before you raise your hands in frustration and walk away, consider that a major medical bill will bankrupt your family, so even something is better than nothing. Many States now offer basic health insurance based upon income levels; call your state offices and ask if you can get insurance that way.

Again, raising your deductible will help if you have insurance but are struggling to pay for it. See what kinds of plans your company offers, and if you can get insurance through work. Compare the plans and make sure you are comparing apples to apples, even with the complicated wording of many policies. Also, take advantage of medical savings accounts that let you put aside money to pay for medical expenses, tax free.

Keeping on top of your insurance costs and options will save you money immediately and in the long run. The key is to comparison shop often so you always get the best discounts.

Taken from the free How to Save Money on Everything ebook, where tips are constantly being added. Get your copy by subscribing to the frugal newsletter.

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{ 12 comments… read them below or add one }

David June 26, 2010 at 8:40 am

On the contrary, you absolutely have a choice about car insurance, just not after you’ve made a choice to drive a car. Some places in this country, this is more or less a necessity, but other places it can be avoided along with a huge pile of expense and headaches.

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basicmoneytips.com June 27, 2010 at 4:41 am

I would just remind people to periodically shop around. Plus, sometimes checking with an independent agent is worthwhile. They can shop various policies with some lesser known companies that are still good insurance companies.

I recently got notice that my homeowners insurance was going to increase. I took all my information to an independent agent recommended to me by a friend. I was able to cut my car insurance and home insurance by about $500 for a year. I was pleased with that.

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Jay June 27, 2010 at 11:41 am

keeping a good credit score will be your biggest money saver in the end. insurance companies place a heavy emphasis on a good score.

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kt June 28, 2010 at 1:02 am

i never have to pay for car insurance because i have never had the need to own a car and i rent. This ccoupled with the fact that i work from home makes me feel very favoured by God. So for the time being, i am saving a load of cash. The thing is that this situation will change in the future and i may be in a situation that i have to pay a lot in insurance; These tips will come i handy them

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Marc June 28, 2010 at 10:43 am

I’ll add another type of insurance no one should be without. Get a liability umbrella of at least $1M (more is better). It’s the cheapest insurance you’ll ever buy, and one, honestly, that you’ll probably never need to use. However, if you need it and don’t have it, it will change your life forever… you will probably never recover, financially. It’s only about $150.000 a year, so lower your auto deductibles and get an umbrella.

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Cd Phi June 28, 2010 at 2:52 pm

I think a small but crucial portion of how much you spend on insurance is ultimately dependent upon you. How willing you are to go and find good affordable insurance is dependent upon how much you want to pay for you and your family. Talking to your insurance providers and explaining your needs will give them a glimpse of what kind of coverage you need.

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lauren June 29, 2010 at 8:48 am

So I know this is about saving money on insurance, I’m all about saving money so I thought I’d also share how I saved money on my auto payments. I read a blog post on AOL’s walletpop the other day about a company called MoneyAisle. It does the online research for the consumer and has banks bid on us online, where we receive the top 3 rates to choose from for auto refinancing. I went through the process and ended up saving $75 a month on my payment, which basically pays off my insurance. Right now the search process for the best rates is such a pain and dealers try to get the highest dollar amount, so this is a super awesome tool. I def suggest taking a stab at going through the process, you will be shocked when you see what you get as a rate compared to what you are currently paying or what you are given by other banks/dealers. Hope this also helps.

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James June 29, 2010 at 1:40 pm

the bundle idea is smart, so is the increasing your deductible. i have never hear about insuring the land for replacement cost, i will have to check the fine print on this one.

all in all this was very eye opening and i will have to make some phone calls to ensure my family is set up for success.

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Tony June 30, 2010 at 5:03 pm

Be careful before you act. I belong to USAA. A company that compares to no other in my humble opinion. They also did not take any tarp money. They were there for me when no one would touch me. They handle everything and even offer towing at $3.00 a pop for six months per vehicle. They are my bank, broker, home lender, Personal and Auto Insurance Policies. They are my bank and handle multiple accounts for my kids and wife. For you loyalty you receive a subscriber savings account. If the company is profitible you recieve a check every year. Leave them and they leave you. Your no longer considered loyal. Go ahead jump around and save 20 bucks here and there. I bet if I average my costs along with the quality of service and year end checks I receice switching from a company like this after 26 years is nonsense.

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car insurance July 13, 2010 at 4:49 am

I’ve often seen people go to the first company that gives them the lowest quotes, only to regret bitterly when it’s claims time. Great tips up there, but I’d also like to add, look around and ask others about their claims handling experiences before you take the leap. A few dollars saved here might cost you manifold when you need to claim if you do not choose your insurance companies wisely.

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Esteban Dupont September 26, 2010 at 10:37 pm

Here’s another: typically combining your home and car insurance with the same company gets you a good multi policy discount which can save you anywhere between 10-15% on each.

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Settlement February 27, 2011 at 6:01 pm

Compare quote from insurance companies’ website is another way to get competitive offer.

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