Want to pare down insurance costs? Think before you cut.

You can save money and still have the protection you need

Today’s uncertain economy combined with high unemployment is leading many to put off purchases and search for ways to spend less.  Some are intrigued by the possibility of cutting expensive insurance costs. This article hopes to illuminate methods to save on insurance without putting yourself at risk.

The Insurance Information Institute estimates the nation’s average home insurance costs $764 a year; additionally the institute estimates that it costs $831 a year to insure a vehicle. Substantial insurance costs may tempt many to scale back on insurance in the short-term.  However, doing so may cause those who do so to pay the price later for their penny-pinching today. 

Deborah Fester of QBE Regional Insurance recommends looking for savings in your policies that will not leave you short-changed, or even bankrupt, in the event of disasters or accidents. Unfortunately being uninsured when an unexpected event happens can wipe you out financially like in the case of a major auto accident or if your home goes up in flames.  Fester, also points out that canceling your insurance polices to save money is a bad strategy in the long run:

“We’re seeing so many people choose to just not pay their insurance premiums because they’re strapped for cash,” says Fester. “This only makes it worse when you try to reinstate insurance after letting policies lapse. Many companies look at how long a customer has gone without insurance, and the result could be rates double or triple what they were before.”

Rather then letting your coverage lapse Ms. Fester offers five tips that you should discuss with your insurance agent in order to keep your home and vehicles protected while keeping extra cash in your pocket:

1. An excellent way to save is to bundle multiple policies together.  For example purchasing home and auto coverage with the same insurance company. Some insurance companies will reduce premiums by 5 to 15 percent if two or more policies are purchased.
2. Raise your insurance deductibles. By raising your homeowners deductible from $500 to $1,000 you could save as much as 25 percent annually, says Fester. This savings often covers the increased deductible costs.
3. Reduce coverage on older cars. Consider reducing or removing collision or comprehensive coverage on older or seldom driven cars.  Especially if the vehicle is worth less than 10 times the amount you are currently paying for insurance.  Additionally, it might also be worth while keeping a less expensive comprehensive coverage policy to pay for windshield replacement or similar repairs.
4. Take inventory.  Regularly review your possessions to make sure you are not paying for insurance you do not need.  For example, if you have sold a lot of your gold jewelry, or your antique radio collection is worth much less than it was, reduce or cancel your  floater. A floater is additional insurance to pay full replacement value if the item is stolen, lost or damaged.
5. Dig for the discounts; ask your agent which ones you might qualify for. Investigate additional discounts based on your age or working status.  For example, those 55 years or older and retired may qualify for up to a 10 percent discount at some insurance companies. Also, a strong credit rating can also help lower insurance costs. Some insurance companies like QBE encourage their customers to order free credit reports each year to make sure the information is correct and accurate. Do not be afraid to ask if your company gives breaks for:
   • Good students with a 3.0 grade point average.
   • Taking a driver training or defensive driving course.
   • Low annual mileage.
   • Vehicle safety equipment such as anti-theft devices, air bags and daytime running lights.
   • Home security devices.
   • Hail-resistant roofs.
   • Updated heating or cooling systems or other home renovations.
   • Being a long-time customer.
   • Paying policies in full.

By actively pursing these five strategies you with your agent will hopefully lower your insurance costs today, while maintaining coverage and preventing higher insurance costs for tomorrow.

		Redmond General Insurance Agency, Inc. 16160 NE 80th / P.O. Box 847 Redmond, WA 98073 CA License #0B01381 Ph:  800-429-4144        425-885-2283 Fax: 425-885-6631