Insurance is designed to reduce your financial risk, and that’s a good thing. But auto, home and life insurance premiums can cost thousands of dollars a year and really tax your wallet. Still, that doesn’t mean you should resign yourself to paying expensive insurance rates. Instead, look for options to save money, including bundle policies to get a discount. According to a 2021 insurance rate analysis by Insurance.com, you can save an average of 17% or $730 per year by bundling your home and auto insurance policies.
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“Bundle by insuring your home and car (even boat) with the same company because you may be able to save money if you have more than one type of policy with the same insurance company,” said Joe Meisinger, chief underwriting officer and head of national personal products products. insurance at Travelers. “Also, consider bundling your valuables and umbrella liability policies to save.”
But bundling is not the only way to save. Check out these helpful tips to get more out of your car, homeowners, and life insurance companies — all while paying less.
Car insurance: increase your deductible
“Most people opt for a low deductible when they sign up for insurance, but this will make your monthly payment higher,” money-saving expert Andrea Woroch said. “If your goal is to lower your premium, increasing your deductible is a quick fix. Increasing your deductible from, say, $250 to $1,000, can have a significant impact on your premium. Just be sure to stash the amount you save until you have enough to cover the deductible, and keep it in a separate account so it’s out of sight and out of mind.”
Car insurance: opt for usage-based insurance
You can save up to 50% on your auto insurance premiums by signing up for usage-based insurance.
“Safe drivers with low mileage who have consumption-based insurance can get discounts,” said Felix Maberly, the manager of Tiger Supplies. “Some insurers have programs to track your driving through a telemetry device installed in your car in exchange for potential discounts. If you drive less than 10,000 miles a year, this kind of program can save you money.”
Homeowners Insurance: Reduce Your Personal Property Insurance Coverage
“A good tip to save money is to make an inventory of your belongings at home, estimate the cost it would be to replace each item,” said RJ Weiss, Certified Financial Planner, Licensed Insurance Agent, and founder of The Ways to Wealth. “It is standard to include personal property insurance in a homeowners policy of at least 50% of the amount you carry to rebuild your home. Therefore a $500,000 home would have $250,000 in personal property insurance. For many homeowners, especially younger ones, who have not acquired much possessions, they can save 5%-10% by asking their insurance to cover the amount of personal property up to the amount they have determined in their home stock.”
Homeowners Insurance: Improve Home Security and Safety
You may be able to save about 10% on your homeowners’ insurance premiums if you install a home security system.
Look for opportunities to improve home security and safety,” Meisinger said. “If your home has certain types of fire alarms, burglar alarms, locks or smoke detectors, see if you qualify for a credit as you have reduced your risk Smart home technology can also qualify you for a discount (e.g. Ring, smart thermostats or water sensors), which is easier to install and more affordable than ever.”
Life insurance: share your activity and fitness data
“An often overlooked way to get discounted life insurance rates includes sharing your activity and fitness data,” said Matt Schmidt, co-founder of Diabetes Life Solutions. “Certain life insurance policies providers allow consumers to voluntarily purchase their FitBit or Apple view data. Depending on the consumer’s activity level, you can: qualify for discounts ranging from 3%-6% per year. while this discounts may seem small at first, over the lifetime of your life insurance policy you could have to potentially save thousands of dollars.”
Life insurance: buy a term instead of the whole life
Isabella Fitzgerald from Lion life insurance point out that opting for a little bit of life insurance is always better than none. And when you compare the cost of term life insurance to full life insurance, whole life insurance can cost 10 times or more than the amount of term life insurance.
“Instead of wasting an entire life insurance plan that costs the earth, buy a short-term plan instead,” she said. “A 10-year plan is an affordable way to protect you and your family, especially if money is tight. But make sure it’s a convertible plan – this gives the option to switch to a permanent plan in the future when your budget is less limited.
All policies: Pay annually
If you can swing it, you can save money by prepaying your insurance premiums each year. This applies to car, home and life.
“With most life insurance companies, you can typically save between 2% and 5% if you pay annually instead of monthly,” said Brian McHale, CEO and owner of Policy Mutual.
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Last updated: May 27, 2021