Whether it is car insurance or business insurance, the average insurance buyer has a major goal in mind; and that is getting the best coverage at the cheapest rates.
We have discussed a lot in previous articles; we have discussed topics ranging from how to buy insurance policies, how to avoid scams and i even revealed some of the secrets that insurance agents and brokers keep away from you. Today, i want to reveal how you can save some money when you are buying insurance coverage. Insurance is pretty much the same everywhere in the world, so it doesn’t matter if you live in Australia or Africa; the tips I am going to reveal today is useful for any market, anywhere in the world.
Insurance involves paying a company to provide protection for your business against catastrophic events that may lead to losses. It is not only designed for business; it’s also designed for personal property and even for life assurance.
How to Save Money on Insurance Policies
1. The first tip to save money on insurance is to have just the right amount of insurance that you need. Don’t just keep giving the insurance company premiums for coverage you don’t need and compensations you would never get. Before you buy insurance, perform risk assessment and let that guide you in buying insurance products.
On your car insurance for instance, you should consider all the things that may go wrong based on previous experiences, intended usage of the vehicle and general information. Some questions you should ask are:
- Is your car prone to damages?
- Are the roads you would be plying good and safe?
- How often do people have accidents on these roads?
- What are the common problems that occur when similar vehicles get involved in accidents?
- Is there a total write-off or is the vehicle strong enough to withstand some hits?
2. Self-Insurance-: Self-insurance is one of the best and safest ways to insure your properties but the problem is that a lot of people lack the discipline required for self-insurance. Self-insurance involves setting aside some amount of money periodically to cover for damages or losses when they happen.
3. Review your coverage-: Don’t just buy insurance and then abandon the whole deal. After purchase, you must continue to review your insurance policy on a periodic basis and strike out things that you do not need while you include policies that you actually need. Take note things like policy changes and ensure that you fully understand the policy contract.
4. Avoid Duplication-: Another way to significantly save money in insurance policies is to avoid duplication. Duplication occurs when you buy two different insurance policies that provide the same coverage. For instance, you don’t need to pay for extended warranties if your credit card doubles the warranties on your purchased items. It is important to constantly check the policies that you already have to see what it covers for before you go ahead to buy new insurance policies.
5. Consolidate your policies-: Instead of buying separate policies for different items, you should consider buying umbrella coverage. Umbrella coverage would contain a little bit of everything and help you to reduce costs of insurance significantly. However, when buying insurance coverage, you must be extremely careful in order to avoid over-coverage or under-coverage. While under-coverage is risky because it would be insufficient when losses occur, over coverage would increase your expenses on items that you do not need.
6. Easy on the claims-: Insurance is not meant for that small brush or scratch on your vehicle, it is for huge losses. If you file claims all the time for little things, insurance companies would find ways to increase your insurance rates. Also, to guarantee settlements, make sure you document all losses-it would really help you when negotiating settlements.
7. Compare Prices-: Another important thing to do before buying insurance products in order to reduce your prices is to ask for quotes from different insurance agents and companies before you commit to one. When you compare quotes, don’t just settle for the policy with the cheapest premium rates. This is because the cheapest rates do not necessarily translate to good coverage. Go for the policy that gives extensive coverage at reasonable prices.
8. Increase your deductibles-: Low insurance deductibles mean higher premiums. Deductibles mean the amount you would contribute to losses when they occur. For instance, if you have a $500 deductible and a loss of $1,000 occurs, you would use your deductible to pay for the balance if your insurance policy cannot completely cover the costs of damage.
9. Ask for Discounts-: Insurance companies’ offer lots of discounts to encourage buyers but a lot of people are either unaware of forget to take advantage of these discounts. Some insurance companies would not offer discounts but would give it out upon requests. So next time you want to buy insurance policies, make sure you ask for discounts from your insurance agent or broker.
10. Maintain a clean credit record-: You have probably heard of it several times; a bad credit history earns you higher premium rates from insurance companies. Not fair huh? I feel the same way too but that’s how the system works. So if you want to save some money on insurance, ensure that you maintain a clean credit record.
11. Talk to the right agent-: The insurance agent you use is also very important. You should look for a good agent that has your best interests at heart and is not all about meeting his sales targets and getting his commission. Look for an insurance agent who would be ready to give you adequate expert advice.
For instance, some insurance agents try to deceive naïve insurance buyers; convincing them to buy some ‘add-ons’ these add-ons are not necessarily needed by the policy buyer or useful for them at that, you would only be helping the agent make more commission if you buy such policies.
To locate the right agent, you need to do a lot of research and investigations, ask friends and families for referrals and when you finally get an agent you wish to work with; make sure you ask for reviews and let the experiences of other people guide your decision.