How To Save Money on Your Homeowners and Auto Insurance

by Pauline Milner
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Most of us have no choice but to insure our home and auto. A former insurance agent spills the secrets for how we can save.

Insurance policies covering vehicles and property are a necessary product most consumers own. During my years as a licensed insurance agent, one question from clients far outweighed all others. Can I get my insurance any cheaper? In many cases, the answer is “Yes.”

It is important to ask about available savings as agents are not obligated to tell you about specific discounts unless you ask. Since many earn their income from commission on both sales and renewals, they may use discounts that you do not know about in order to offer you a better premium when you advise them you have found a better price elsewhere.

Take advantage of the following suggestions and you may find instant savings. Please note that the percentage savings estimates, shown in parentheses, are average amounts calculated by comparing those offered by various insurance companies. Premium reductions reflected as a dollar amount have been determined by comparing actual savings realized by policy holders.

Increase Your Deductibles

Most insurance policies are issued with standard deductible amounts. If this is the case with your policies, increasing the deductibles will save you money ($120).

See If Can Be Rewarded for Safe Driving

Drivers who have no tickets and students who maintain a minimum average in school or university can be eligible for reduced rates. New drivers who have taken driver training will also benefit from lower premiums.

Drivers who have speeding tickets or other driving related convictions account for more accidents. If a driver in your household has a poor driving record and you agree to not let them drive, your insurance company may offer you a better rate (No tickets/Good student – 15%).

Shorten an Increased Premium Following and Accident

At fault accidents can cause you to pay increased premiums for up to six years.

If your insurance policy is due for renewal and the accident will be six years old within the next six months, ask if the company offers a semi-annual policy, so you can take advantage of the premium reduction sooner. Insurance companies are unlikely to change your driver rating part way through a policy period ($900 annually).

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Save as a Multi-Policy and Long-Term Policy Holder

Companies regularly offer you a discount if you have more than one policy with them. They also reward insureds who have not had claims or are long-term policy holders. Even being a senior can cost you less (Multi-Policy, 15%, No claims, Seniors, 10%).

Look Into Group Discounts

Discounts may also be available if you are a member of groups such as the AAA, AARP or are a university alumnus. Current and retired military personnel can also enjoy special rate reductions.

Also, be sure to ask if your insurance company participates in reward programs like Air Miles (Group membership, 10%, usually limited to one membership discount, Military, $500 annually).

Save as a Low-Mileage Driver

How you use your vehicle can affect your premiums. If you drive only for pleasure, do not travel back and forth to work, or if you have low annual mileage, you may find yourself paying less ($250 annually). 

Let Safety Features Help You Save

Car alarms and safety features such as rear view cameras and traction control as well as monitored home security systems lower the amount of claims in addition to decreasing your premiums.

Some insurance companies will install and monitor GPS in your vehicle. Drivers who stay within the speed limit and avoid erratic driving can enjoy lower rates.

Hybrid discounts are also becoming popular (Car and home safety devices, GPS, Hybrid 10%).

Consider Whether You Need Collision Coverage

If you drive an older vehicle, consider removing the collision coverage. Insurance companies are not going to pay thousands of dollars for repairs when they can give you a lump sum payout equal to the value of the vehicle for much less.

When purchasing a new vehicle, remember that premiums can vary widely between models. Also, claim statistics play an important role when companies are determining what premiums to charge. For example, taking the time to research which vehicles are most often targeted by thieves can reduce your comprehensive premium.

Pay in One Lump Sum Instead of Installments

Instead of dividing your insurance payments into installments, paying them all at once can save on finance charges. Also, insurers have begun offering discounts for policies purchased online (Finance charges 5-8% annually, Online policy purchase, 5%).

Keep an Eye on Property Insurance Limits

Property insurance limits can increase automatically when your policy renews. Insurance amounts are based on the cost to repair or replace your home and not on market value. You can ask to have the amount recalculated, which could result in the limit being lowered.

If your home has additional aspects that can reduce the likelihood of claims such as a septic or sump pump, specific heat sources such as electric as opposed to wood and brick construction, ask about specific discounts for those features.

Ask for a Discount Match

Even if you are eligible for all available discounts, insurance companies will have a maximum allowable amount. Though they have set premiums and discounts, if you find a better price, certainly ask your existing agent if they can match the amount.

With a lot of competition in the insurance market, companies are becoming more flexible. Discounts are limited to between 25% and 40% off the policy premium. Due to the wide margin, this can translate into significant savings making this information crucial to your bottom line.

In an economy where every dollar counts, a call to your insurance agent is a time investment that may translate into additional funds you never even knew you had.

Reviewed October 2022

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