10 ways to save on insurance

I believe that thrift is essential to well-ordered living.

~ John D. Rockefeller

Recently, Canadian Capitalist wrote about Auto & Home Insurance Premiums Going Up In Ontario and Rob Carrick lamented the sizable increases in home insurance premiums. Insurers are telling us that they are paying out more in claims and that their costs are rising. There’s not much we can do to get them to lower their premiums, so we might as well control what we can. Here are 10 ways to save on insurance:

1. Bundle & save

Many insurers will give you a discount if you insure more than one asset with them. Ask how much you’ll save if you insure multiple vehicles as well as your home with the same insurer. If you have a boat, RV, cottage, or other insurable assets, be sure to throw them in the mix as well to maximize your savings. If your insurer doesn’t provide these discounts, see #2.

2. Shop around

If you are looking to insure a new car or home, check with your existing insurance provider first, but then call around to other companies to see if they can do any better. We like to repeat this each year a few weeks before renewal. We have been with the same company for a couple of years now, but we only found them as a result of shopping for a better rate than our previous insurer was offering.

3.Raise your deductibles

You can call your insurance company at any time and ask them to raise the deductibles on your home and auto insurance. We have raised our home insurance deductible to $1500 and those on our vehicles to $1000 each. This can add up to some pretty nice premium savings over a couple of years. Just make sure that you always have enough cash on hand to cover the deductibles just in case. We earmark a part of our emergency fund for this purpose.

4. Purchase wisely

If you’re buying a home, it will cost less to insure a newer home as it’s less likely that things might go wrong with your electrical, heating or plumbing systems than if you own a home with antiquated structures. Also, consider the geographical location and construction of the home. Is it in an earthquake, hurricane, or tornado-prone area? If so, you may want to make sure the home is built to withstand those conditions.

When purchasing a vehicle, it makes sense to get an insurance quote before you buy. All other things being equal, you may want to choose the vehicle that is cheaper to insure. The Insurance Bureau of Canada offers information on How Cars Measure Up in terms of insurance claims. The data only seems current up to 2008, but you should be able to get a general idea of how expensive various vehicles are to insure. You may also want to avoid vehicles that are more likely to be stolen.

5. Ask for discounts

Insurance companies offer discounts for a variety of situations and they can vary greatly from company to company, so make sure you shop around for the company that offers the discounts that best fit your situation. Here are some of the ways you might be able to qualify for a discount:

• Have a great credit rating. Yep. That can actually save you money on your premiums with some companies.
• Pay off your mortgage. Make sure you let your home insurance provider know once you do, and you could be in line for a premium discount.
• Seniors discounts
• Good student discounts for teens and young adults with good grades: this group can use all the help they can get, as their premiums (especially for males) are usually a lot higher.
• Alarm or theft deterrent discounts
• Discounts for belonging to professional or community associations
• Over 45/mature driver discounts
• Discounts for good driving record
• Loyalty discounts for remaining with the insurer
• Claims free discount
• Short commute savings: premiums are usually lower if you drive your vehicle less.

6.Pay annually

Check to see if you are being charged a financing fee for paying your premiums more than once a year. If so, save in advance and pay the premiums annually.

7. Pay for smaller claims

If you have a small claim to make, you’re probably better off paying for it out of pocket and leaving the insurance company out of it. For one thing, if you have raised your deductible as suggested, your claim might not be eligible. You will also be susceptible to a boost in premiums and lose your “claims free” discount. Save the insurance for the big problems.

8. Reduce coverage

Be careful with this one. You want to make sure you have the insurance coverage you need when you need it. Still, there are a couple of things to consider that could help save you some money: If you own an older vehicle (some say 5 years or older, and others say 7), consider removing the collision insurance from your coverage. The idea here is that, if your car is damaged in an accident, it will likely cost more than the car’s value to repair or replace it. In this case, you’re better off avoiding the insurance hit and buying a new car. (Just make sure you have some money saved in advance to do so.) One other consideration is that, if you have a loan outstanding on your vehicle, the lender may require you to carry collision insurance. Make sure you check with them before you make a change.

9. Check the details

Each time you receive a policy renewal, it’s good to make a habit of checking to ensure that details like your name, address, policy numbers, and V.I.N. numbers are correct. If you’re insured for the wrong vehicle it could be costing you money. There may be a tendency for your eyes to glaze over when you look at your insurance policies (I know mine do), but it’s worth taking a few moments to review any additions the insurance company has included. Last year, our company added rental car coverage to our policy, so I called and asked them to delete it. That saved us $60 a year for two vehicles.

10. Prepare & prevent

You can keep your premiums low by reducing the likelihood that you may need to make a claim:

• Drive safely. Getting there a few minutes sooner just isn’t worth it.
• Install smoke detectors in your home and check the batteries at least twice a year.
• Install an alarm system and use common sense to practice theft deterrence.
• Have a fire extinguisher at the ready in your kitchen.
• Maintain your home and your car: taking good care of your assets will make them last longer and may prevent more costly problems down the road.

Can you think of any other ways to save on vehicle or home insurance?