How To Lower Insurance Costs Without Reducing Coverage
While insurance is necessary to protect you from the uncertainties of life, you can take specific steps to ensure your overall insurance costs stay within your budget.
Although there are some direct-to-consumer insurance companies whose idea of lowering your insurance costs is to reduce your insurance coverage as a quick way to save money, it’s certainly not advisable. Here are some ways you can lower your costs for insurance while maintaining appropriate coverage.
There are many ways to reduce car insurance costs without sacrificing coverage.
Reduce car insurance costs.
Insurance companies base your car insurance rate on a range of factors, such as what kind of car you drive, how long you have been insured, and your driving history. By becoming aware of the things that can increase your car insurance costs, you can take steps to maintain your coverage without breaking the bank.
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Although auto insurers use similar parameters like the driver’s age, make of the car, driving history, location, etc., to calculate your auto insurance rates, they often assign different weights to the factors.
We constantly see and hear advertisements telling you to shop for your insurance and save. But beware, constantly switching companies can be a way to lower your insurance costs, but it is not always advisable as some companies offer longevity discounts. By constantly switching, coverages can be left off in error, and you may have your coverage canceled for a claim as you don’t have a past relationship with your insurer.
Take advantage of car insurance discounts.
Every car insurance company provides discounts to allow savings on your car insurance premium. Some of the standard car insurance discounts offered are:
- Low mileage discount: Where you are working from home, adjusting your mileage per year can attract a discount;
- Safe driving discount: You can get additional discounts if you maintain a clean driving record;
- Multiple policy discount: You can save on your insurance premium by bundling various policies like home and car insurance from the same carrier.
- Safety feature discount: Having safety features like anti-lock brakes and anti-theft devices can help you get additional discounts.
- Good student discount: Often, it can be expensive to insure student drivers. Getting good grades can allow good student discounts on car insurance.
Only pay for the coverage you need.
To lower your car insurance, remove the coverages you do not need. For instance, if you are driving a car over ten years old, you may want comprehensive and collision coverage. Check your policy to see if you have duplicate or irrelevant coverage to lower your auto insurance costs.
Get an insurance-friendly car.
The type of car you drive can affect your overall car insurance rate, particularly your comprehensive and collision coverage costs. Expensive cars, EVs, sports cars, and cars with a high theft rate are more costly to insure than lower-cost or low-tech vehicles. Before buying a car, ask how much it will cost to insure and determine if the cost of coverage fits your budget.
Sign up for a safe driving program.
Completing a defensive driving program can reduce your risk of car accidents which can, in turn, lower your car insurance coverage. Many car insurance companies offer discounts on their insurance after you complete a certified defensive driver’s course and submit confirmation of such completion.
Consider usage-based insurance.
It’s called Telematics. This is when you allow the insurance company to track your driving behavior; you can consider pay-per-mile or usage-based car insurance. To participate, you need to install a small device or an app that will transmit your driving behavior to the insurance company.
The usage-based insurance can track your mileage and also safe driving behaviors like speeding and braking. If you drive safely and do not commute daily or drive for long distances, this option can lower your car insurance rates.
Check for any “working from home” discounts as well.
Take these steps to review the factors behind your home insurance cost.
Ensure property facts are accurate.
If you have home insurance, taking the following steps can lower your insurance costs.
- Ensure the square footage of your home, the year of building, and the year of construction are accurate. That would help your insurer to make an accurate estimate of your replacement insurance coverage.
- Ensure to prepare an accurate inventory of precious items, like jewelry, art, or other valuable items, and get them approved to determine the coverage required to insure all these valuable belongings.
Review insurance credits on protective devices.
If you are getting insurance credits on protective devices, such as:
- smart security and detection systems
- traditional detection devices (smoke alarms and fire extinguishers)
- permanently installed generators and automatic water shutoff devices
Make sure they are running properly and in good order to claim the credits.
Only pay for the coverage you need.
To lower your home insurance, remove the coverages you do not need. Check your policy to see if you have duplicate or irrelevant coverage to lower your home insurance costs.
General Insurance Cost Reduction Tips
There are also things you can do across the board to reduce your insurance premiums.
Take advantage of available insurance discounts.
In some instances, you can become eligible for specific discounts on your insurance that can significantly lower your insurance costs.
Some such instances are:
- Paying your bill using electronic recurring payments – potentially up to 5% savings.
- Paying your premium in full – potentially up to 10% savings.
- Paperless billing and policy correspondence – potentially up to 5% savings.
- Multi-policy discounts – potentially up to 10% savings per policy.
- Telematics, using a widget or phone app when driving, can reduce your auto insurance premium – potentially up to 10%.
- Membership and organization discounts – potentially up to 10% in savings.
You need to check with your agent or insurance company to see if you qualify for all or any of these discounts.
Update your policies annually.
Contact your agent before your policy’s renewal and request an insurance review. Your car insurance policy can change with the changes in your circumstances. For instance, when your kids grow up and get their own insurance, you need to update the number of people covered under your insurance policy. You may be over-insured or underinsured. Request an insurance to value estimator.
Increase your deductibles.
Deductibles are the amount the insurance company deducts from your payout when you file a claim. Increasing your deductible will cause an increase in your out-of-pocket costs that will automatically lower your insurance cost.
Make sure you can afford the deductible in the event of an accident before deciding on a higher deductible.
Improve your credit score.
Insurance companies often use your credit score to determine your car insurance premium rate. A good credit score can give you a cheaper insurance rate. If you have a poor credit score, improve it by paying off your debts on time to lower your insurance rates.
Explore other payment options.
Your mode of payment of the insurance premium can also affect how much you pay for your insurance, whether it’s your car or home insurance. If you can be flexible with your payment methods, like offering to pay premiums in one single payment or linking your bank account or credit card for automatic payments, you can lower your insurance costs.
Going paperless on your account statements and other communication can also help you lower your insurance costs while saving the environment.
Almost all insurance companies offer a multi-policy discount when you write more than one policy with them, such as home and auto insurance.
Move to a new location.
Living in a safe neighborhood with fewer cars and lesser crimes can put you at a lesser risk of car thefts, accidents, and collision cases involving injuries, lowering your insurance rates. In contrast, living in densely populated cities with many cars and a higher crime rate can raise your insurance premiums.
Call your agent to discuss ways that you can reduce your insurance costs without reducing or eliminating coverages you need to protect yourself properly. Don’t forget to conduct an annual insurance review and find out what discounts you qualify for.
Contact the Insurance Center of New Jersey to Discuss Reducing Your Insurance Costs Without Reducing Coverage
The Insurance Center of North Jersey (ICNJ) has a rich history of serving clients with personalized attention.
Whether it is property or car insurance, our insurance specialists can assess your requirements and provide a customized solution to all your insurance needs.
To learn more about how our insurance can provide the right kind of protection for your property or how you can reduce your insurance costs without sacrificing coverage, contact us here at The Insurance Center of North Jersey.