Reducing Insurance Costs

Over the years my husband and I have worked hard to reduce our insurance costs. I believe wholeheartedly in acquiring insurance, particularly disability insurance, but I sure hate shelling out money for each policy.

In order to reduce our overall insurance costs we built up a sizable emergency fund and waited to change our policies until we knew we could afford the larger out of pocket expenses. Once we achieved a solid financial footing we increased the deductibles on each and every policy. The changes started out relatively small. The first change altered our auto policies from $250 to $500, later we made the jump from $500 to $1000.

In my opinion increasing the deductible on homeowner’s policies is a no-brainer. Insurance premiums are bound to rise anytime you make a claim, so it makes the most sense to avoid claims for minor issues. Of course, in order to avoid claims you must have enough money in the bank to cover the cost repairs, which is why all roads lead back to building a solid emergency fund.

Another big savings came from merging our homeowners and auto insurance policies under one low cost provider. This alone saved us a few hundred dollars a year. There are many ways to search for low cost insurance. I simply searched the websites of most big name companies and used comparison sites like those provided by Progressive Insurance.

The other way to save on insurance is by purchasing used cars and holding on to them for the long haul. At this point all three of our vehicles are at least ten years old. When the blue book value of our vehicles falls below $3,000 we typically remove collision coverage from the policy. This usually puts another $100 or so back in our pockets.

Of course, car accidents and speeding tickets are the fastest way to drive up insurance costs, so my husband and I both do our best to practice safe driving. Although we’ve both been caught by speed cameras, neither one of us has ever been ticketed by the police or been the cause of a auto accident. A clean driving record goes a long way in keeping costs down.

Between our clean records, low cost provider, merged policies, older vehicles and high deductibles I bet my husband and I spend at least 50% less on insurance than most of our friends and family.

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