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Tis the season for New Year’s resolutions and one of the most popular is to get a handle on personal finances. The challenge is that Americans are increasingly being squeezed with higher living costs and stagnant or lower wages. To make up for the shortfall, we must be look for ways to save in other areas, such as insurance.
Anyone who owns a car and home must carry insurance on these properties. But with some wise decisions, your expenses for these coverages can be reduced significantly in the New Year. Here are some ways to save money on your auto and homeowner’s insurance this upcoming year:
- Drive Less: Most auto insurers use average miles driven annually as a factor in determining your premium. If you drive less than average, you can keep your premium lower. If possible, look into taking public transportation to work and other ways to reduce your annual mileage.
- Ask for Safe Driver Discounts: If you have a clean driving record (no recent tickets, accidents, DUIs), you should be rewarded with a discount on your car insurance. Sometimes, however, you must inquire with your agent or insurer to make sure you are receiving all the discounts you are entitled to.
- Keep Your Credit Score High: These days, most insurers factor in your credit score when calculating your premium. So make sure to pay your bills on time; it is not only wise financial management; it will also help keep your insurance costs down.
- Install Safety Features: Cars with alarm systems and other safety features often qualify for a discount.
- Increase the Deductible: The more claims you file, the higher your insurance rates will be in the long run. For this reason, it is better to pay for incidentals such as scratches and dents out of pocket. A higher deductible can also lower your premium by as much as 40%.
- Reduce Coverages on Older Vehicles: If you have an older car (say 10 years old or older), it is a good idea to check its market value to find out if it makes sense to keep collision and/or comprehensive coverage.
- Keep the Right Amount of Coverage: Many homeowners make the mistake of insuring their house for its real estate value rather than rebuilding cost. These two figures are never the same; one could be higher than the other for various reasons. For example, real estate value is based on the market value at the present time and includes the lot the home sits on. Make sure your home is insured for its actual cost to rebuild so you are properly covered.
- Install an Alarm System: As with auto coverage, many insurers will give you a discount if you have additional safety features in your home. Unbreakable glass windows and alarm systems are two of the best ways to protect your home from burglary and lower your insurance premium.
- Raise the Deductible: Again, filing more claims will lead to higher premiums. For this reason, it is best to set aside money for incidentals such as theft of a small item or a broken window. In general, your homeowner policy should have at least a $500 deductible.
- Bundle Coverage with your Auto Insurer: Many insurers offer multi-policy discounts, so it will often make sense to keep both your auto and homeowner policies with the same carrier.
This applies to your auto and homeowner insurance, so shop around to find the best rates and coverages. Everyone has a unique situation, so you cannot assume that just because your parents saved the most money with one carrier, you will do the same. For example, you may have an imperfect driving record or a lower credit score. If this is the case, you will need an insurer that caters to consumers in your situation.
Shopping online is one way to compare rates from several carriers, but it is not as easy as some may think. Many times, you will need to fill out a form with your personal information and wait for several agents to call you back. A better way may be to speak directly with an independent insurance broker in your area. Independent agents work directly with several of the top carriers in your state. And because they are not “captive” to one particular company, they are free to shop around for you and find the best package to fit your specific needs.
About The Author
Todd Balderson has been protecting families and businesses through insurance coverage since 1996. He is the founder of Balderson Insurance Agency and serves clients in Maryland, DC, and Virginia. Todd is known for reminding people about how “insurance is more crucial to building your wealth than investments because without insurance, it’s easy to lose your assets.” Learn more about Todd and the insurance protection he offers at https://www.BaldersonInsurance.com