Insurance, whether automotive, home, health, life or any other variety of the product is a way of life these days.
In the event of a loss, good insurance coverage can be priceless. It does, however, come with a price tag of its own.
To ask, “How much does insurance cost?” isn’t a whole lot different than asking how much a brown dog weighs!
In pricing insurance, there are many variables involved which take into account what you’re insuring, to what extent you wish to insure it and how much you’re willing to pay to insure it.
How much?
A less ambiguous answer would be; the least amount possible to get the coverage you need!
I saw a comedian recently do a bit on insurance, labeling it as ‘legalized gambling’.
His routine involved him wagering with an imaginary agent saying;
“I bet this much you will eventually crash your car.”
“Bet I don’t.” He replied.
He slyly grinned and mimed licking his thumb and slowly peeling a bill at a time from his imaginary handful of money.
When it comes down to it, in a sense, insurance could be viewed as a wager; and, as with casinos, insurance companies don’t like to lose!
Regarding most types of policies, let’s examine some ways of hedging your bets and spending less for insurance.
Straight from the horse’s mouth
Okay, maybe not the horse, but a fourteen year veteran of the business as the proprietor of a successful independent insurance agency, and incidentally, my spouse! She states:
- A policy paid in full, rather than segmented into payments is worth significant savings right off the top. In some cases as much as a 25 to 30 percent discount!
- If a payment plan is necessary, automatic electronic withdrawal, aka: a paperless payment system, is worth some savings also.
Not only does it save the company billing expense, it saves the policyholders thetime and effort of making their payments.
At the same time, it also eliminates forgetting to send it in!
- ‘Bundling’ multiple policies also creates discounts across the board.
If you insure all of your vehicles, your home, your boat, the whole kit & caboodle with the same company, that too, is consideration for yet further savings.
- More vehicle specific, certain factors figure in.
Home ownership
Companies typically interpret that to indicate stability and responsibility.
Married verses single is a plus and one’s driving record is obviously considered.
The type of vehicle to be insured, the anticipated mileage and usage of the vehicle factors in, as well.
The vehicle’s safety equipment such as airbags, anti-lock brakes, anti-theft measures, especially GPS tracking equipment, are all certainly considered aspositives to lower the cost.
Age is also a consideration. *Youth, as well as seniority are factors.
With most companies, regarding youth, a good grade point average is a consideration for a discount! (Not to mention very beneficial in many other aspects!)
*Without harping too much on age, I personally disagree with the statistics that dictate the highest risk drivers are males under the age of 25!
MANY more times than not, while driving, if I’m cut off, hacked off, flipped off, or have my doors blown off, it’s some cutsie little gal in a zippy little ride who one can only believe, truly thinks she owns the road!
For seniors, there are driving safety courses available that some companies view favorably in offering discounts.
- She also strongly recommends that you not be shy about asking an agent if every possible discount has been applied!
Are there possibly any others?
**Available discounts, though not always presented at the time of the sale, arenumerous! Make the agent think about it by letting him or her know that you are very discount conscious (and savvy) and you don’t want to miss a thing!
Clark Howard, syndicated consumer advocate and my undisputed favorite‘Consumer Warrior’ reinforces this concept.
“An insurance company will let you pay a higher premium unless you ask for applicable discounts!”
Don’t believe it? Let your agent know you’re dissatisfied with your premium and you’re going rate shopping. You will likely be amazed at the results!
On-line insurance vs. a store-front:
While some people still believe that face-to-face is better, purchasing on-line is certainly a viable option.
Storefront agents definitely side with the old-schoolers on this one!
The truth is, however, that while somewhat less personal, the on-line insurance stores do typically offer lower rates by eliminating the middle-man.
No frills, just insurance.
Now, flip the coin. Dealing with an agent does allow for one-on-one communication regarding discounts and other variables that may not be addressed on-line.
Having a live agent who is familiar with you, and you they, whom you can call to discuss any issues that may arise is always nice.
And, a pleasant conversation, a comfortable environment and a friendly smile are pluses for the storefront.
No bias here, just making objective comparisons!
When shopping rates, on-line or through a storefront, two things are very important…
First, be sure that each quote is for the identical coverage; line for line, apples to apples.
Second, be aware that if, for what ever reason, you don’t have insurance in force at the time, you can expect to make a large down payment and suffer higher rates.
Homeowners Insurance
Turning once again to Clark Howard, in his discussion on the increasing cost of Homeowner policies being due to factors associated with the down housing market, he says this,
“The fact that your home is down in value is irrelevant for homeowners insurance.”
“The cost to rebuild or replace your home from the ground up in today’s market is still very expensive.”
“So, the problem is that the cost of replacing it is greater than the amount of insurance on most homes.”
“Even in a down market, many homeowners are underinsured and should actually raise the amount of insurance on their home.”
In conclusion he offers some hope;
“Thankfully, you can find big differences among different insurers for the same coverage if you shop around.”
“But one thing to watch out for; If you’ve switched insurers recently, don’t switch again!
“Longevity with an insurer has value.”
RAISE the DEDUCTIBLE?
Huh?
A study shown in Money Advisor magazine states in their example that by increasing your deductible to $1000, if you have a claim exceeding the deductible, you would recoup that $1000 over a four year period in premium savings!
A higher deductible may also prevent one from ‘nickel-diming’ the insurance company into raising your premium.
It happens!
One consideration to make before raising the deductible over $1000 is to check with your mortgage holder and be sure it is permissible under the terms of the contract. In some cases, it isn’t.
This concept holds true for other types of policies also.
Ahh, Life Insurance!
Cash in your Whole Life policy and buy Term Life Insurance! Then, invest the difference in an IRA!
That was the battle cry of the A.L. Williams Insurance Company some years back!
Agents who dealt in the traditional and substantially more expensive Whole Life/Cash Value policies were literally up in ARMS over the new-fangled concept.
Anti-Replacement-Measures…
ARM was developed by the huge insurance companies for battling the very convincing spiel put forth by the hoards of A.L. Williams representatives.
I know this because I was a Williams rep! I still believe it makes sense, but it takes rigid discipline to stash that extra money away.
Accumulating cash value within a Whole Life policy, at a perhaps lesser rate than even a savings account offers, is however, a more sure method of saving a little money for some future date.
Term Life remains the most affordable type of policy.
And, as with any insurance product its rates, terms and conditions are shoppable.
HMO, PPO, POS, FFS, OMG, ROFL, WTH…
.…is up with health insurance in the USA?
I have grubbed and searched for tips regarding the best rates in this segment of the industry and simply put…
Get a good job that offers good group insurance and participates heavily with the premiums!
Staying as far away from politics as I possibly can, healthcare insurance in this country, by whoever’s agenda, needs serious reconsideration!
According to the Insurelane Learning Center, an HMO plan (Health Maintenance Organizations) is the least expensive and consequently, offers the least freedom of who you choose to provide your health care.
On the other end of the spectrum is a plan known as the Fee-for-Service plan.
This is the most expensive, but lo & behold, it is insurance as we once knew it!
You get an x-ray or other medical procedure, the hospital or doctor’s office files the claim and voila!
You get healthy and the bill gets paid!
The PPO and POS plans fall between the HMO and Fee-for-Service plans in cost and efficiency.
I had to see what Clark Howard had to say on the matter and I was pleasantly unsurprised at an idea he had.
By perusing websites that offer coupons for everything under the sun, he has seen coupons for numerous medical procedures!
Not just cosmetic or optometric type services, but serious medical and dental procedures!
He says that while this doesn’t substitute for health insurance, if you can score a deal, do it!
Here’s the list!
As promised, this boils down to a list of tips to help you save money on the various insurances you require.
Here are your ten dos and the five don’ts:
DO!
- If not paying in full at the time of signing, set the payments up for automatic withdrawal.
- Bundle your policies. Make your agent your one-stop-shop.
- Check for new discounts at each renewal period. The industry is constantly changing and new savings can come along that you may never realize unless you ask.
- Youngsters, keep your grades up! (For many reasons!)
- Seniors, check with your insurance company and ask if they will recommend any safe driver courses that will qualify you for a discount.
- Check on-line for the best rates if the personal service of an agent isn’t something you need.
- When shopping rates, be sure the comparison is apples to apples.
- Bump that $250 to $500 deductible up to around $1000!
You’ll save in the long run.
- Consider Term Life Insurance.
- Regardless the product, shop it!
Don’t!
- Be bashful about letting your agent know you want lower rates and will shop if necessary!
- Allow a policy to lapse. Starting over is expensive!
- Nickel & dime your insurance company, they will raise your rates!
- Do things that are detrimental to your driving record!
- Jump from company to company too often.
