There is a good chance that we are overpaying for our insurance policy if we don’t pay close attention to it. In this case, we should follow up with any positive suggestions and read everything carefully. It is obvious that insurance matters are quite tedious and hard to understand. In this case, the insurance agent may try to cause us to slightly overpay for the insurance policy, saying that it will provide with complete coverage, although there’s one or two excess components that we don’t need.
Although many insurance agents are honest and very nice people, they are still salesmen who want to maximize their profits. This can be a big problem for consumers who are already struggling to pay for their monthly bills and debt repayments.
It is important that we are able to save every dollar we could. There are things that we can do avoid overpaying for our insurance policies:
1) Reduce the monthly premiums:
We may set our deductibles low and when bad things happen, we could afford to have our house or cars repaired. However, over time, the accumulated savings in the deductible would cost us. For a lower $600 deductible, we may pay $40 per month more. After one year, we will spend our $600 savings. We should be able to put some money back in our pocket by raising our deductible. However, we should make sure that we have just enough money for any emergency fund, for our deductible can be covered if there’s an accident.
2) Avoid doubling up insurance coverage:
If we already have a proper life insurance, disability and health insurance policy, it is a good idea to have only minimum injury protection on our car or homeowner’s policy, based on what required by the local authority.
3) Insure cars where the house is insured:
It is a good idea that car and house are insured with the same insurance company. The discount shouldn’t apply only to our car and house, but also the content of our house and even our medical and life insurance policies. In order to reduce costs, we may need to obtain separate quote for each of the component. In this case, the rate of the car insurance could be somewhat higher, but the overall insurance costs can be much lower. In this case, we should take the deal and keep everything insured with the same insurance company.
4) Portray an image of low-risk customer:
Portraying ourselves as a risky customer is a sure of losing money when dealing with insurance companies. As an example, we shouldn’t show to the insurance company that we are irresponsible financially. This can be indicated by our shaky credit history. If we ever allow our insurance policy to lapse in coverage, it is quite likely that we will face higher premiums in the next year. So, we should never allow our policy to lapse, even only for a week. This can be seen as a liability and it will result in higher premium.