- Re-evaluate your insurance coverage for home, contents, life, auto, boat, RV, etc. Determine if you are covered appropriately or not and adjust accordingly. Granted you may find you are under-insured somewhere, but better to find out before you make a claim, rather than after.
- Shop around for insurance: Before renewing your existing policies each year, check out the rates of competing companies (see the website of your state insurance department for for auto and homeowners' insurers). Their annual premiums may well be several hundred dollars lower.
- Depending on your needs it may pay to switch to Term Life Insurance. If your children are now on their own, or if your spouse works and the like, term life is the best bang for the buck. The annual premiums on a term life policy would typically fully fund an emergency savings account. Remember insurance is not an investment and in most cases, any life insurance product other than term, is just not worth the extra cost.
- Raise the deductibles on auto and homeowners' insurance: Being willing to pay $500-1,000 on a claim, rather than only $100-250, can reduce annual premiums by as much as several hundred dollars.
- Consider dropping credit insurance coverage on installment loans. Many consumers don't need credit insurance because they have sufficient assets to protect themselves in the event of death, disability, or unemployment. Terminating this coverage often reduces financing costs by three percentage points, a savings of about $1,000 on a four-year $20,000 installment loan.
- Pass on extended warranties: A $129 two year extension on a $300 product is just not worth it. Warranties are insurance, and we rarely need to insure such a small amount.
- Think before submitting an insurance claim, call your insurance agent to discuss the impact to your premium is if you do file. Consider not submitting a claim on a loss that is less than twice the deductible. So for a $250 deductible on an auto loss, the out of pocket cost is any loss up to $500. Why? The $250 you'd receive from the insurance company is not worth the increased premiums you will likely have to pay.
- Pay car insurance semi-annually. Many companies offer quarterly and semi-annual, as well as annual payment options. The shorter the payment interval, the more it costs.
- Pay your life insurance annually. Insurance companies charge you more if you pay monthly. Again the shorter the payment interval, the more it costs.
Next week we will cover ways to save around the house and with utilities