Seven Ways to Save on Insurance

Avoid premium pitfalls and save big bucks.

Are you overpaying for insurance?

A recent survey by insurer ACE Private Risk Services suggests that most of us shell out more than we need to for the auto, homeowner’s and other policies we buy—and might actually get better coverage for less if we purchased more wisely. Here are a few tips to try:

1 Shop Around

Today the Internet makes it easy to compare pre- miums, as sites such as 2insure4less. com and let you plug in your data to request a quote. But be aware that this may trigger a call from an agent, and you should talk with an agent or trusted insurance adviser to make sure you fully understand the terms before you buy.

2 Bundle your Coverage

You can often get discounts if you purchase different kinds of insurance from the same carrier, says Sheldon Fallon, president of the Leigh Insurance Agency in Freehold. “And in some instances you can also save by buying different poli- cies through the same agency, even if different carriers are involved.” Also, if you own a condominium, check out your condo association’s coverage—choos- ing the same carrier may help you save.

3 Pay in Full

Some insurance carriers give discounts to those who pay all at once, rather than in monthly installments, because it spares them the cost of sending out invoices or coupons, Fallon explains. And many companies will take a credit-card payment. Of course, you’ll need to determine if your card’s interest rate is a better deal. Even if you don’t pay in full, look into paying by automatic electronic transfer rather than by writing a check—it may help you avoid a monthly installment fee.

4 Choose a Higher Deductible

The deductible, of course, is the amount you must pay on a claim before coverage kicks in. And you can save big-time on premiums if you’re willing to pay for small losses yourself and use your insurance as protection against a major catastrophe. Insurers seek to reduce the expense and hassle of processing many small claims, and some are willing to share the savings with you if you help. For example, homeowner’s insurance typically features a $250 deductible, but you may save up to 24 percent if you choose a policy that starts at $1,000 instead. “When you go above $1,000, however, the additional savings isn’t enough to warrant the extra out-of-pocket cost,” says Fallon. “Check quotes carefully and consider what you can afford.”

5 Look for Special Auto Discounts

You may save on your auto insurance if you’re retired (insurers figure you’ll drive less), if you’ve passed a defensive-driving test, if your car has safety features such as antilock brakes or an alarm system, or if your licensed- driver son or daughter has good grades or moves 100 miles or more away to col- lege (companies figure they’ll drive less). Be sure to ask about other discounts.

6 Keep a High Credit Rating

Sounds like a no-brainer, but did you know your good credit rating could save you on insurance? On auto policies, for example, different credit scores can make a difference of $200 to $300 year in total premiums for otherwise equivalent drivers.

7 Review Homeowner’s Coverage Annually

You may have made changes during the past year that qualify you for lower premiums. “If you put in a central-station alarm, you can save 10 percent on your homeowner’s policy,” says Fallon. Did you install a backup generator? Put in a leak-detection system? These changes too may make you eligible for credits or reduced rates.

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