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How to Save Money on your Home and Auto Insurance

How to Save Money on your Home and Auto Insurance

If you haven’t taken the time to sit down with your insurance agent recently, there’s a good chance that you could be paying too much in premiums. Here are some tips for cutting your home and auto insurance costs.

1. Before you buy a car, compare insurance costs

Auto insurance premiums are based in part on how much the vehicle costs, how much it costs to repair it, how safe it is, and how likely it is to be stolen. Many insurers give discounts for vehicles that have features that increase safely, such as daytime running lights, or features that reduce the chance of theft, such as an alarm system.

2. Higher deductibles cost less

If your auto insurance policy still has a $50 or $100 deductible for comprehensive or collision coverage, it’s probably time to increase your deductible. Increasing your deductibles from $100 to $250 can save you around 15 percent, and raising them to $500 can save as much as 30 percent. It’s the same story on your homeowner’s insurance policy. By raising your deductible to $500 or $1,000, you can save on your premiums. Many companies allow you to have a split deductible, which pays one deductible for wind and hail losses, and another, usually lower, deductible for other losses such as fire and theft. Before increasing your deductible, make sure you have enough money set aside to meet the higher out-of-pocket expense associated with a claim.

3. Does that older vehicle need full coverage?

If you are paying for full coverage on an older vehicle, it may be time to just carry liability insurance on that vehicle. A ballpark guide for determining if your vehicle is worth enough to justify the cost, is to multiply the annual premium times 10. If your vehicle is worth less than that amount, it may be time to drop the full coverage.

4. Package your home and auto insurance for a discount

One of the best ways to decrease your insurance premiums is to insure your home and auto with the same company. This can save as much as 20 percent off each policy. Some companies give discounts for longevity, so staying with a company for a longer period of time can earn you discounts as well.

5. Keep your credit rating in good shape

Almost all insurance companies now use some form of credit scoring to help determine the premium you pay. A high credit rating can reduce your premiums as much as 50 percent or more. Check your credit on a regular basis and rectify any problems that may be apparent.

6. Stay Insured – Don’t let your insurance policies lapse

Never let your insurance policies lapse. Customers who let their insurance policies lapse are statistically a higher risk, and companies may charge more.

7. Buy a longer term policy or pay your policy in full

If you are financially able to pay your entire policy amount with one payment, you will save money over paying in installments. Some companies give discounts for a policy that is paid-in-full, and most companies charge an installment fee for paying monthly or quarterly.

8. Drive safely and don’t get tickets

Insurance companies try to determine the likelihood of future claims by your driving history. If you have had an accident in the past 3-5 years, you will likely pay a higher premium than if you were claim free. Even if you forget to tell your agent about a claim, it will be discovered because most insurance companies subscribe to a service that tracks poliyholder claims for all participating companies. The same goes for speeding tickets and traffic violations as those appear on your permanent driving record.

9. Make sure you accurately determine mileage driven per year

Many companies give a discount for autos that are driven less. Make sure you calculate the miles driven accurately so you can obtain this discount, if you qualify.

10. Improve your home security

Most companies give discounts if your home has deadbolt locks, a fire extinguisher and smoke alarms. Added discounts are available for homes with a central station monitored burglar alarm or a sprinkler system. These disounts can be as much as 15-20 percent of your homeowners insurance premium.

11. Pay attention to where you buy your home

If you are shopping for a home, be sure to check to see if your home is located in a Missouri flood zone. If it is, you could be required to obtain a federal flood insurance policy before getting financing. The premiums on flood policies is high, even if you don’t insure the contents. It could pay to look for a home in a different location.

Homes that are farther away from the local responding fire department pay higher premiums than those that are closer. If you home is outside the city limits or more than 5 miles from the nearest fire station, expect to pay a higher homeowners insurance premium.

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