3 Ways to Reduce Insurance Cost

When it comes to reducing debt, many people ignore the insurance line on their budget. They need insurance, so it becomes an untouchable expense with which they feel helplessly saddled. Look at your expenses towards insurance coverage, life insurance premium in your paycheck, auto insurance bills, home insurance receipts, etc. They add up to a huge number!

I am not asking for stopping your coverage. That’ll be suicide. Remember, I always say insurance is an important defense for your financial security. Insurance is required but, you can save money on your insurance coverage. You just need to know how. Here are three ways you can reduce your insurance debt with some simple financial “housekeeping.”

Look at What You Must Insure

The first thing you must do to reduce your insurance debt is to look at everything you must insure and write it down. Do you have a car? If so, you must carry auto insurance.

What about your home. Do you rent or own? Jot that down. Do you have any personal belongings that carry significant value?

Notate them. Is your health and life insurance coverage a benefit through your employer? If so, do you bear a portion of the cost? Add that information to your list, and so on.

Once you have completed your list, look at it – thoroughly – and then ask yourself what is necessary. You have to insure your vehicle because it’s the law.

If you’re paying off your home, you must carry insurance to protect the mortgage lender. You can save on mortgage insurance if you save at least 20% of your home price and pay as down payment.

If you rent, however, you might not be required to have building coverage, but if you own valuables, you’ll want it to protect them. How much life coverage do you actually need? Really think about what you must protect.

Review Your Current Coverage

Once you’ve come to an understanding of what you must insure, it’s time to review your current policies to see where you might realize cost savings.

For example, if you are a safe driver and you have a bit of money stashed away, you can save immediate auto insurance costs by assuming more risk in the event of an incident.

What this means is you will pay a higher deductible should you have an accident and your insurance carrier will reduce your premiums.

Another thing to consider closely is your health and life insurance coverages. Unless your employer is paying this benefit in full, you may be able to reduce the amount out of your pocket or omit an amount altogether.

Is there an HMO option that will save you money over your PPO policy? How much money would your beneficiary actually need if something happened to you? Can you reduce your life insurance coverage?

If there’s an HSA policy, explore it. Money to your HSA account is tax free, bets option is to use this account to pay for every medical expense you may have.

Work With Someone Local

Now it’s time to bring in the experts. Contact a local insurance agent and sit down with him or her with your list and notes.

Many people believe that working through an insurance agent costs you more money in the end, but this isn’t necessarily true.

These people not only have the knowledge to help you reduce your coverage where you don’t need it, which will save you money, they also work directly with carriers to get you the best deals, which will also save you money.

Alongside canceling or reducing coverage you don’t need, your insurance agent can also help you combine policies through one company, which will reduce your insurance debt significantly.

In some cases, your best approach to tackling debt is utilizing the expertise of another. This is one of those cases. Also, there are online comparison sites to shop for. Go to the market place and get the cheapest insurance possible without sacrificing on the coverage.