An insurance plan can seem like an unnecessary expense, draining your bank account every month without anything to show for it. That is, until something bad happens. An insurance policy for all major purchases in your life is more or less essential to your financial stability. Thankfully, there are ways to prevent overpaying for insurance so you get the most out of your policy.
When it’s all said and done, insurance policies can end up costing thousands per year. Just like any other big-ticket item you’re looking to buy, do as much research as possible before committing to a policy. The Insurance Information Institute recommends getting at least three quotes from different agencies for every policy you are considering. And while you naturally want to save as much as you can, price shouldn’t be the only factor. If you find an insurer that fits your budget, your next step should be finding reviews of that company or policy. You can find these easily enough online, or ask friends and family for their preferences. Some key questions to ask when conducting this search: Is the company financially stable? Do they have a good reputation? If going through an agent, is that person helpful and answering any questions you have? Take control of the process and work to find the best deal.
Car insurance is one of the few kinds that is not optional, since every driver is required to be insured. So while you may not be able to skimp in this category, there are still plenty of ways to reduce the overall cost. AARP has a list of possibilities1 for lowering your monthly payment, most of which include taking advantage of hidden discounts. Many insurers offer rebates for bundling multiple types of insurance, like auto, home and life policies, for a smaller total cost. You can also take advantage of discounts offered when you take a safe driving course, or if your monthly mileage is under a certain amount. There are often plenty of discounts available depending on your plan, so be sure to research the options available and find which ones make the most sense for you.
You should also be aware that car insurance rates will vary depending on what type of car you drive and how old it is. Fast sports cars usually fetch higher premiums than a midsize sedan. If your car is particularly old, you may want to forego higher-priced comprehensive or collision protection plans, as the premiums on these policies may be significantly higher than the car’s value.
A life insurance policy will protect your family from worst-case scenarios, and is something that’s hard to put a price tag on. There are still ways to save on these policies, and every little bit helps. Before buying a plan, you should make sure you are living a healthy lifestyle. Consider exercising more and eating healthier in order to lose weight and lower blood pressure. This will make physical exam numbers better, and therefore lower your premium costs. Nonsmokers also get much more value out of their life insurance plans than smokers. Take this into consideration before purchasing a life insurance plan.
Unconventional insurance plans
As Forbes contributor Jessica Downey notes, there are a bevy of nontraditional insurance plans2 out there, including pet insurance, wedding insurance and even protection against hacking. The question of whether or not these niche policies are worth the cost generally comes down to how much the thing being insured matters to you. And in some cases, the math just doesn’t add up to make them worthwhile. There is something to be said for per-mile auto insurance,3 which has gained steam among younger drivers who may also commute via public transit and want to save. A survey by insurance agency Towers Watson suggests many would even change their driving habits in order to utilize these plans for low-mileage car owners.
Ultimately, picking the right insurance policy comes down to balancing your budget with what’s important to you. Just like any other major purchase, you should pinch pennies when you can, but not if it prevents you from getting quality coverage. Become an educated insurance buyer by doing your homework, and you may be surprised at what you find.
The views expressed by the articles and sites linked in this post do not necessarily reflect the opinions and policies of Cash Central or Community Choice Financial®.
1(2015, Apr). Retrieved from: https://www.aarp.org/money/budgeting-saving/info-06-2010/insurance_ways_to_save.html
2Downey, Jessica. (2015, Sept 1). Retrieved from: https://www.forbes.com/sites/learnvest/2015/09/01/are-these-5-trendy-insurance-policies-really-worth-the-money/?sh=6924d96c185b
3(2015, Sept 3). Retrieved from: https://www.insurancejournal.com/news/national/2015/09/03/380660.htm