The recession stemming from the COVID-19 pandemic is unlike any other in United States history. Many have found themselves un- or under-employed and more circumspect about their economic future, leading them to look for ways to save money on essentials.
During this challenging time, it’s wise to review your insurance as rates change and policies come up for renewal. Many companies are also offering rebates on auto insurance. But whether you’re shopping for a new policy or updating an existing one, make sure you’re trying to save smartly — and not in a way that’s likely to backfire down the line.
There are many ways to save on insurance, but one of the best methods is simply to shop rates. Compare quotes with at least three different companies. The best and most efficient way to shop your policy is to work with an independent agent who knows your market and your individual needs. The agent can then translate that to an apples-to-apples comparison of policy types and coverage from various carriers.
Make your decision based on price, value, the reputation of the insurance provider, and your comfort with the agent. Think about the big picture because you’ll be working with this person to help you complete future claims should they arise. The lowest price is not the best option if you’re sacrificing coverage, service or reputability.
Bundling your insurance or sticking with one provider across multiple policies can be a strategic way to capture savings of 5 percent to 20 percent. But sometimes using separate providers might be more cost-effective. Again, the best way to find out is to comparison shop and not assume you’re getting the best deal with your current insurer. And one of the easiest ways to do that is to have an independent, knowledgeable We Insure agent that has access to top-rated carriers and some of the most competitive pricing in the industry do the legwork for you.
Evaluate Policies at Least Once a Year
Insurance premiums may increase after the policy period ends, so it’s always smart to evaluate your coverage and shop your policy to ensure you get the best rate. Most policies like homeowners and life insurance generally have one-year terms, but auto insurance usually renews every six months. In addition, many auto insurers are currently giving rebates to their customers because of the hardships from COVID-19. Be sure to check with your insurer to verify if you’re receiving a rebate, or ask for one if you aren’t.
These major life changes should trigger a re-evaluation of your insurance needs:
- A change in employment that reduces your mileage (e.g., working from home)
- Starting a new business (or side hustle)
- Pending retirement or job loss
- New addition to the family
Additionally, if you can answer yes to any of the following five questions, you may be able to reduce the cost of your insurance premium:
1. Did your credit score improve?
Depending on the state you live in, insurance companies may use credit-based insurance scores to predict how likely you are to have an insurance loss. They’re like regular credit scores but only use select elements of your credit history. This score is only one factor that influences your premium.
2. Did moving violations fall off your driving record?
Good for you! Most states allow moving violations to remain on your record for up to 10 years. Safe driving over time can remove these splotches and lead to a better rate.
3. Do you qualify for a low mileage discount?
Low mileage discounts vary by insurer, but some insurers advertise a price break of up to 20% if you drive less than 8,000 miles per year.
4. Can you reduce optional insurance on an older vehicle?
Collision may no longer make sense on an older vehicle that you’ve paid off. A common rule of thumb is to drop collision when the cost of comprehensive and collision together is greater than 10% of your vehicle's value. But speak with your We Insure agent to see if this makes sense in your specific situation.
5. Have you made improvements to protect your home?
Adding smoke detectors, sprinkler systems, burglar alarms or deadbolts to your doors can keep you safer and decrease your insurance premium.
Proceed with Caution with These Savings Strategies
Raise your deductible to lower your premium — but only if you can afford to pay it. On things like a wind policy, for instance, a higher deductible could mean many thousands of extra dollars out of pocket after a big storm. And many folks probably have less in their emergency fund or a lower salary than before. Also, be wary of signing on with a poorly rated carrier just to save a few dollars. You may find that the savings aren’t worth the cost of poor service in the long run.
If you’re ready to save money on your home, auto, business or life insurance policies, contact your local We Insure agent. Our agents have access to top insurance carriers and specialty insurance providers and can help you get the coverage you need at competitive rates.