During the first half of the month, we’ve created a real livingĀ budget that is built
around your life, not forcing your life to live up to someone else’s idea of a
budget. Now that this budget is in place, we’ll use it to see where we can trim
some of the fat from expenditures. The next several days will focus on a specific
expenditure area, with a discussion of things to think about when evaluating
those expenses, along with some tips for reducing those expenses. This is not a
rulebook. Spend an hour considering these tips, gathering information, and
deciding what works for you, not what works for someone else that you’ll try to
shoehorn into your life.
Everyone who owns an automobile faces auto insurance, and everyone who owns
a home pays homeowner insurance. It’s a fact of life for most of us, so we just pay
it and move on. What we often don’t consider, though, is how much we can save
on this insurance with just a little bit of legwork.
Look at other providers. It doesn’t hurt to shop around a bit. Take fifteen
minutes and get a few quotes on your home and auto insurance from other
carriers. I was surprised how much of a difference there was between various
insurance carriers – depending on the factors they used, the rates varied quite a
bit.
Raise your deductible. The largest slice of Americans have a home insurance
deductible of $500, but they very, very rarely make claims on that insurance. If
you raise your deductible to $1,000, you can save as much as 25% on your
insurance. How often do you make claims on your home insurance? If it’s rarely,
you might consider raising your deductible to reduce your payment. The same
goes for auto insurance; if you don’t make claims very often, look at raising your
deductible to reduce your payments.
Look for package deals. The majority of Americans have different providers
for their home and automobile insurance. See whether or not you can get a
reduction in your premium if you take all of your business to one provider. My
parents did this a few years ago (they moved their home insurance to their auto
insurance provider) and their overall premiums dropped about 18%.
Install a deadbolt and smoke detectors. Call up your insurance provider and
ask for their recommendations for deadbolts, smoke detectors, security systems,
and other equipment that might reduce your premium. If they’e cheap (often,
smoke detectors are a great investment here), go buy them, install them, and get
that reduction in your premium.
Check for other discounts. Many insurance companies offer reduced home
insurance rates if someone works at home (or doesn’t work at all). Auto insurers
will offer lower rates if you have a stable, socially responsible job. Both will offer a
lower rate if you have a good credit rating. Explore these avenues with your
insurer.
If you have an insurer you’e generally happy with, don’t switch. This
is especially true if you’e approaching the three year or six year mark with the
same insurer, as they often reduce rates a bit (5%) at each point. That doesn’t
mean you shouldn’t compare rates on occasion, but insurance companies look for
stability.
You can evaluate all of these points with just a few telephone calls and web site
visits, well worth an hour of your time if you can trim 10% (or more) from your
premiums. If you pay $200 a month for insurance and can see that go down to
$180 every month, you’e suddenly looking at $240 extra per year for an hour of
work.
