Insurance and the costs associated with all the different types of insurance we need are a constant source of frustration for many people. You’re never sure what the insurer will charge you this time, so you keep hoping that it adds up to a favorable amount.
In addition to hoping that luck smiles on you and gifts you affordable insurance, here are some tips to ensure that you get the lowest insurance rate at all times.
- Ditch the Insurance Agent
You may enjoy the convenience that relying on an insurance agent to take care of all your insurance needs brings, but there is a cost to be paid. Every time the insurance broker acts on your behalf, you pay him a percentage of what you’re paying for the service. The agent’s role is to find customers on behalf of the insurance company. The insurance company then pays him a commission for every client he brings in.
Now, the insurer loves his profits fat, so he is not taking the commissions from his share of earnings. Instead, he transfers the amount to you. After all, you’re the beneficiary of the insurance cover. But the extra cost is not openly indicated in the cost breakdown, so you wouldn’t see it even if you checked. Everybody wins, except you could have saved some money.
- Buy Insurance Directly from the insurance Company
Insurance companies who sell policies directly to the customers can afford to give lower rates because they’ve eliminated the costs associated with a broker. This means more savings for you.
Many of us have been conditioned to rely on the insurance broker so much that we are inclined to be suspicious of any insurance offers that do not involve one. Whatever the insurer is selling to you is as genuine as what you would get from a broker. It also has the added benefit of lower cost, so you emerge a bigger winner.
- Pay your Premiums in a Lump sum
If you can afford to pay your premiums at your go, you’ll do away with the monthly processing charges that increase your premiums. Without the extra fees, your overall insurance cost is significantly reduced.
If you can’t pay the whole amount at once, consider paying your premiums every other month or every two or three months, whatever works for you. Most insurance companies are flexible about this and will customize the terms of the policy to capture this.
- Raise your Deductible
The deductible is like security for your insurance payout. The insurance company subtracts the deductible from the claim payout. A higher deductible qualifies you to get lower premiums. If your aim is to spend the least amount of cash on total insurance costs without being particular about getting a high claim payment, this may be a good strategy to use.
- Keep your Insurance History Clean
Insurers are not very fond of people who file claims often. Of course, they would never say it to your face, but it’s what they live by. If you’re one such unlucky fellow, they’ll sweetly smile at you and promise you the deal of your life, then go ahead and slap you with a high insurance rate just in case you decide to file a claim with them in the near future.
But seriously, a high claims rate makes you undesirable to the insurance company because it means the company will soon enough spend money making a payout for a claim you make. They would rather give the deal to someone who is less likely to file a claim. That way they’ll have more money in their pocket. It’s nothing personal, though. Jut business.
- Buy Bundled Insurance Packages
Most insurance companies give discounts when you buy two or more policies from them. When shopping for an insurer, consider such deals as they can lower your costs considerably.
Most policy pairings involve car and home insurance. If you’re in the market to renew both covers, it wouldn’t hurt to compare the available bundles.
- Don’t forget to Compare Price from Different Insurers
Each insurance company has a unique way of calculating insurance cost. What is considered a high risk factor in one company, and therefore, a justified cause for a high insurance rate may be a low risk factor in another company.
Find out who has the lowest price by comparing the offers from different insurers on a similar policy.
Here are a few extra tips for low insurance cost for specific types of insurance:
- Maintain a clean driving record.
- Service your car regularly as required.
- Add a more experienced secondary driver to your policy. They should also have a clean driving record.
- Don’t add extras to the policy.
- If your car is older, choose a lower amount of coverage. It will be cheaper.
- Buy/renew your insurance early. If you shop for insurance at the last minute, you’ll end up paying more than someone who buys their insurance three months before the date of renewal.
- Buy a home in a safe neighborhood. Check what parameters different insurance companies use to classify neighborhoods as safe, unsafe, or somewhere in-between. Then ensure the house you buy is in a location that’s considered safe.
- Install a security system to boost security in your home and ward off burglars.
- Have a fire alarm and fire extinguisher in place.
Do everything you can to show the insurer that you’ve done your best to safeguard your home against different hazards.
- Maintain a healthy lifestyle. The more you ward off lifestyle diseases, the more you qualify for lower insurance rates.
- Avoid high risk adventures. They attract high premiums.
- Stick to a healthy lifestyle. It lowers your risk for disease and keeps your health premiums low.
Insurance costs account for a big chunk of our earnings. If you’re not deliberately trying to get the lowest cost for your insurance, you may end up spending more than you can afford.
We’re yet to come across someone who doesn’t appreciate a good discount. Why not try the tricks above and see how much you get to save on insurance this year?