Tips to Saving on Car and Home Insurance

Countless ads on television, radio and in your mailbox urge you to choose a new insurance company that vows to save you money on auto and home premiums. While it often sounds too good to be true, the reality is that with some serious shopping and good planning, sometimes you can find less expensive insurance options. It’s easy to get overwhelmed by the offers, but in this day of rapid communication, the process can be relatively easy and efficient. If you have any luck, the savings could be worth it. 

Start by knowing exactly the kind of coverage you have today. Before you call around or check out quotes on the Internet, have your current policies in front of you in order to compare “apples to apples” as you look at the numbers. Make sure a policy at a better price is giving you the same (or better) coverage than you receive now. 

Another preliminary step before pursuing car insurance deals is to check your driving record to make sure it’s accurate. If you’re clear of any recent accidents or tickets, you might obtain a better price than if you’ve had a recent incident. Check with your state’s Department of Motor Vehicles if you have any doubts about your record. 

Where to cut costs on car insurance

Competition for car insurance business is strong, which works to the benefit of consumers. Ask your current agent or insurance company about ways your existing policy could become less expensive for you. Many companies even offer “renewal discounts.” Beyond that, here are different types of discounts that may apply to you that can help reduce your auto insurance expense:

•     Good student – insurance companies may reduce the cost of including a child on a policy if his or her grade point average is at or above a specified level.

•     Senior citizen – seniors with good driving records may qualify for lower rates. In some cases, those who pass a special course (such as defensive driving) may save on their policy as well.

•     Low risk occupation – depending on how you earn your living, the insurance company might consider you a safer risk and offer a lower premium as a result.

•     Professional organization – being affiliated with certain organizations, including auto clubs like AAA, can result in a savings on your insurance.

•     Auto safety features – most policies will adjust rates based on the availability of certain safety features on your vehicle, such as antilock brakes and airbags. On the contrary, certain expensive or high performance cars may come with a bigger insurance price tag. 

Be sure to inquire about your eligibility for any discounts. Also look into whether it would be worthwhile to raise the deductible on your policy. A typical deductible is $500. If you’re willing to take on more risk, you could raise the deductible, for example, to $1,000 and reduce your premiums. Determine if this might make financial sense for you. 

Shopping for homeowner’s coverage

As with car insurance, raising the deductible on homeowner’s coverage is one simple way to reduce your insurance costs, though this can be risky. Make sure your higher deductible is still something you could afford on short notice should something unfortunate happen. Others include:

•     Having proper safety equipment in place, such as smoke alarms, CO2 detectors and even stronger roofing materials to withstand storms.

•     Installing a home security system – reducing the chance of vandalism or burglary may allow for lower premiums on insurance coverage.

•     Estimating rebuilding costs – while it may cost more to replace your home than what you paid for it, remember part of the value you paid for was the land your home sits on. Make sure replacement costs are appropriate for your needs and you aren’t paying for too much coverage. 

Ask your insurance company or those you are pricing for comparison purposes to let you know of other discounts that may apply. 

Most important – get what you need

You need to be sure the coverage you have on your vehicles and your home gives you the peace of mind you desire. Don’t sacrifice the level of security you require just to save a few dollars on your premium. The insurance provider you choose should provide you with the right coverage for your circumstances at the best available price. Consider working with a financial advisor who can help you determine what auto, home and other insurance policies may make sense for you and your family. 

Rob Davis lives in University Place with his wife Lorri and sons Wesley and Parker.  He is a Financial Advisor and CERTIFIED FINANCIAL PLANNER practitioner™ with Ameriprise Financial Services, Inc. in Tacoma, Washington.  Rob specializes in fee-based financial planning and asset management strategies and has been in practice for 34 years.  He is licensed/registered to do business with U.S. residents only in the states of Washington and Idaho. 

Brokerage, investment and financial advisory services are made available through Ameriprise Financial Services, Inc. Member FINRA and SIPC. Some products and services may not be available in all jurisdictions or to all clients. 

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