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Insurance Money Saving Strategies

A basic premise for insurance is that you should only buy it for those situations that you can't save enough. Between the insurer's cost of processing claims and profit, the expected return on your money is low or negative. But, it is better than being wiped out by a castastrophe.

Also see the car insurance strategies if you are interested in saving money on your car insurance.

  • Review your insurance and eliminate duplicate coverage. If you are covered through work, usually medical, why buy extra insurance? You can't get paid twice for the same expenses. If you want are concerned about liability and want lots of coverage, you are usually best buying umbrella.
  • Raise your deductibles(medical, home, car, etc.) to the appropriate level, usually $500 or $1000($1000-$2500 for medical). Put the premium savings aside to cover the amount of the deductible for when you have a claim. You can also keep a no annual fee, low interest rate credit card in a safe place to pay for the repair until you have built up your premium savings. Check to see if you are eligible for a MSA.
  • Don't file insurance claims for under $500. Because of the cost for insurance companies in processing claims, they will normally increase your premium enough that you would have been ahead to pay for the claim out of your own pocket instead of the new increased insurance premiums.
  • Shop around for insurance. You can easily save 25% and sometimes up to 50% by shopping around.
  • Carefully evaluate any "extras" in the insurance policy. In most cases, they aren't worth it.
  • Ask what discounts are available. Possible discounts include: multi-car, driver training, good driver, anti-theft, senior citizen, passive restraints.
  • For homes, only insure what you need to. If it never freezes, insurance for frozen pipes will never be used.
  • If you have expensive items like furs, jewelry or collectibles, make sure they are covered by your policy. Add on a floater/rider if needed.
  • Videotape your valuables and keep the tape(s) in a secure off-site location.
  • You probably want replacement coverage instead of market value coverage on your home and valuables. Check with your agent.
  • Check with your agent the percentage of replacement cost that will cover you for 100% of the loss. Some companies will cover the whole loss if you have only 80% of the replacement value covered.
  • Don't buy loan/mortgage/credit life coverage. Unless you are otherwise uninsurable, it will be less expensive to buy term than insurance for a declining balance.
  • If you are healthy, either don't buy disability insurance or increase the waiting period to save money on premiums. If you are injured at work, you should get workman's compensation. Again, put the savings aside in case of need.
  • Speciality, e.g. cancer/veterans/supplemental medicare, insurance is usually very pricey. Only buy with careful consideration.
Places to get on-line quotes
  • Answer Financial - Home, Auto, Life, Renter's, Condo, Travel (Trip cancellation), Health, Vision, Dental, Long Term Care, Home Warranty.
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