Insurance Savings
Insurance savings ideas are a little more difficult to explain than some of the other household savings ideas that impact your daily life, but when implemented properly, these tips can save you a tremendous amount of money.
First, let me state that I'm not an insurance agent, and therefore do not know every single solitary thing there is to possibly know about insurance savings.
In fact, there's quite a bit that I do not know about insurance.
I do know, however, much more than the average person probably knows, due to my experience in the financial world.
For your specific situation, or if you have complicated detailed questions about insurance, I would suggest that you try to find a good, reputable insurance agent with a solid, reputable company.
Please ensure that the agent is looking out for your best interests, and not simply trying to earn a commission from your policy's premium. Unfortunately, as is true with almost every profession, there are good insurance agents and there are not so good insurance agents.
If you'd like, please contact me using the form at the bottom of this page, and I'd certainly be happy to provide you with a few referrals of insurance agents that I know and trust.
I'd like to suggest that insurance is a completely different animal than some of the other expenditures we incur on a daily basis.
On one hand, we pay for insurance in hopes that we NEVER have to use it, but it's there just in case we need it. On the other hand, we become frustrated paying for insurance all the time, especially when we never have to use it, or use it so infrequently that it doesn't seem like the benefits are worth the costs.
So with all of that being said, here are my suggestions for saving some money on insurance.
Homeowner's Insurance Savings
Most people make the mistake of purchasing a policy with too low of a deductible.
In most cases, raising your deductible can significantly reduce your home insurance premiums, thereby saving you additional money.
In the event your home is slightly damaged in some way, you probably wouldn't even file a claim, as you would be out of pocket an amount up to your deductible amount anyway.
In cases where the damage is a little more extensive, the insurance company would cover the costs of repairs over and above the deductible amount, and the insurance company would then probably raise your rate because you filed a claim.
I would suggest that you raise your deductible as high as you feel comfortable, save the money on the insurance premiums, and realize that you are still covered in the event of a major fire, storm, tornado, theft, etc.
In my opinion, that's what your insurance is really there for anyway...not for the relatively minor instances where your home is slightly damaged in some way, but rather for the major occurrences of theft, fire, storms, and other "acts of God".
Also, please keep an eye on the amount of coverage you have on your home.
With some of my rental properties in the past, I experienced situations where the insurance company was arbitrarily raising my coverage limits on an annual basis, creating a situation where I was carrying tens of thousands of dollars more coverage than was actually needed to insure the house.
Renter's Insurance Savings
If you are renting, make sure you purchase renters insurance.
This insurance is usually very inexpensive, and it protects you in the event that your house or apartment is destroyed, and you lose everything.
The building's owner is covered by the insurance he/she holds on the structure itself, but his/her insurance does NOT cover your personal belongings.
Automobile Insurance Savings
Raise your deductibles on your auto insurance.
Similar to your homeowners policy, you'll save a significant amount of money on the premiums, but still be covered in the case of a major accident.
Please do not go lightly on liability insurance, as you wouldn't want to lose everything if you are ever sued.
Also, make sure that your current policy covers you in accidents that are not your fault, where the driver at fault has little or no insurance coverage.
Finally, in instances where your car isn't worth much money anymore, it may make sense to only carry liability and uninsured motorist insurance on the automobile, and realize that you will have to purchase a new vehicle, without any insurance proceeds, if you are ever in an accident and the car is severely damaged.
Umbrella Insurance Savings
Umbrella insurance, sometimes called excess liability insurance, is also something you should definitely consider.
Umbrella insurance is designed to give you added liability protection above and beyond the limits on your homeowners and auto insurance policies.
These policies are relatively inexpensive when compared to your homeowners and auto insurance policies, and basically cover your liability when the homeowners' and auto insurance polices' liability limits have already been used up.
Everyone thinks that "it will never happen to me," but we live in such a litigious society nowadays with all kinds of lawsuits running rampant, some justified and some unjustified, that you just never know when something like this may happen...so it's nice to be protected.
If you don't believe me on this one, please see my story included on my automobile savings page about the "ambulance chasing attorneys" in today's litigious society.
Life Insurance Savings
In my opinion, I'm a fan of Term Life Insurance over the other types of life insurance.
Again, I would suggest that you seek the advice of a good life insurance agent for a more detailed discussion of life insurance, but if you are young and in decent health, term life insurance will be very affordable for you.
Most people are advised to purchase term life insurance in the amount of 10-15 times your annual income.
And to keep costs down, ask your agent about 10-15 year terms.
A good term life insurance policy should provide sufficient coverage in the event of your death, plus you get to choose the beneficiary, who can use the money any way they'd like.
Accidental death benefit coverage, credit life insurance, and disability insurance savings
I'd never encourage anyone to buy accidental death benefit coverage or credit life insurance, and very rarely would I encourage someone to purchase disability insurance.
Statistically, if you were to die early (hopefully this does not happen!), you will die from an illness or disease of some sort, not from an accident...thus, accidental death benefit coverage is very rarely used.
Credit life insurance is sometimes offered when you buy a car, obtain a mortgage, or finance other items such as furniture, equipment, etc.
Credit life insurance is very expensive, and protects the lender when you die, by paying off the balance you still owe the lender at the time of death...plus, oftentimes this insurance is also financed with your loan, meaning that you are paying finance charges on these insurance premiums as well.
Again, as long as you have sufficient life insurance coverage, accidental death coverage and credit life insurance shouldn't be necessary.
Statistics also prove that most of us won't become disabled early in life, again leading to a situation where disability insurance is rarely used.
Disclaimer: Again, heaven forbid any of the above situations happen to you, in that you die an early accidental death or become disabled...if you are that concerned about these types of things happening to you, please, please speak to a good insurance agent that you know and trust, so he/she can lead you in the right direction.
In my opinion, worry about getting your auto, home, life, and possibly umbrella insurances taken care of first, before worrying about these more specific types of insurance.
Again, as I mentioned above, I am not an insurance agent, so please seek the advice of a trustworthy, competent, reputable insurance agent who is looking out for your best interests, and can answer the questions as they relate to your specific personal situation.
Health Insurance Savings
Health insurance is perhaps even more important than life insurance, since we are all currently living, and get sick and injured from time to time.
If you do not receive coverage as an employee benefit from your current employer, you should probably do your own due diligence to find a good, reputable health insurance company.
Once again, insurance savings can be considerable if you obtain higher deductibles...especially beneficial if you very rarely get sick and do not run to the doctor with every little ailment.
In my opinion, an excellent health insurance solution is the Health Savings Account, which I wrote about extensively and you can read by clicking here ==>> Health Savings Account.
Lastly, with respect to health insurance, I would suggest that you use generic drugs instead of the name brands whenever they are available...in my hometown, many generic prescriptions are available for only $4.00 at the local grocery store's pharmacy.
Furthermore, many of the "store brand" over the counter medicines are much cheaper than their "name brand" counterparts, and if you compare the active ingredients, they are exactly the same.
Why pay more for a "name brand", when the "store brand" does the exact same thing?
Shop around
Similar to other areas of savings, shopping around for your insurance needs may save you a tremendous amount of money...for similar or better coverage....and the internet makes this process so much easier nowadays.
Also, you may recognize additional savings by having all of your policies with the same company.
In addition, you may discover even more savings by lowering your liability limits and purchasing an umbrella policy referred to above.
Overall, insurance is a matter of personal preference, but by implementing some or all of the above mentioned strategies, your insurance savings will really add up...keeping you well protected, yet not wasting your hard earned money.
To Your Success...
David Jesse, Your Fellow Average Joe