How can I save money on my insurance premium?

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How can I save money on my insurance premium?

The costs of insurance can really add up month to month. Even if you don’t need to use your insurance, you can find yourself paying a mint in monthly premiums. If you do need to use it, you can wind up spending even more money on deductibles and coinsurance.

If your insurance is a financial burden rather than the financial help it’s supposed to be, you may not have the right policy for your needs. Fortunately, it is possible to lower your insurance costs to make sure you’re getting the most benefit from your policy.

Let’s take a look at how you can lower your monthly premium cost.

Picking the right insurance policy for your needs

Whether you’re talking health insurance or automobile insurance, you don’t want to be paying for more insurance than you need. The more coverage you have, the higher your monthly costs will be.

As an example, let’s look at health insurance:

If you visit the doctor often, you’ll want a plan that makes it affordable to do so. However, if you are in good health and only visit the doctor once a year, you might only want health insurance coverage in case of emergencies.

In the case of the former plan, you’ll have reasonable copayments for office visits and prescriptions; but for the latter plan, you may have to meet a moderately high deductible before you get any coverage.

With the first plan, your monthly premium costs will be fairly high, but your insurance covers a lot of the cost of your medical care. With the second plan, you are relying on insurance for an “in case of emergencies” situation. Your monthly premium costs will be lower, but you will be paying day-to-day medical expenses out of pocket.

Balancing your monthly premium with your deductible is the crux of insurance pricing. You want a monthly premium that is affordable without being a burden. However, you also need to be sure you are getting the amount of coverage you need, and with a deductible you can afford to pay in case of an emergency.

Reducing your benefits and raising your deductible will always result in a lower premium. Going back to the example of healthcare, you need to make sure you are not lowering your benefits too much, because a lower monthly payment won’t do you any good if you can’t afford to pay more costs out of pocket for essential medical care.

Be sure to shop around

Whatever type of insurance you need, you have options on where to get it from. Be sure to shop around at different insurance agencies to compare prices and plans. If you have not done any comparison shopping, you may be surprised at just what the competition offers.

Health insurance, especially, is easy to compare on the government’s health insurance marketplace, which will give you quotes from a number of different insurance providers all in one place.

If you’re switching plans, be sure you are getting the coverage you need. Picking up a cut-rate insurance plan won’t help you if you later find you need coverage and can’t afford to pay the deductibles.

Hunt for a discount

Depending on the type of insurance you’re looking for, you may be able to find a variety of deals on offer.

Here are some common discounts to keep an eye on:

  • Bundling. Many insurers will offer a discount if you bundle multiple policies with them, like home and car.
  • Drive safe. Automobile insurance will often offer a discount if you’re a safe driver. If your insurance company doesn’t offer this kind of discount, you might want to look for a company that does.
  • Install security and/or safety systems. You may find you can get a reduced rate on home and automobile insurance if you install anti-theft systems, better locks, or smoke and CO2 detectors.
  • Have a good credit report. This can be a consideration in home and auto insurance rates, so if you can do anything to clean up your credit it may reward you with a reduced insurance rate.
  • Discounts. Contact your insurance agent to find out if you qualify for any discounts or promotional offers. For example, with Liberty Mutual Auto Insurance, members can save up to 10% by mentioning their membership with PenFed.
Posted in: Personal Finance, Saving Money
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