Today, I want to talk to you about another way you can lower your automobile insurance premiums, or the rates of any insurance for that matter. The keyword here is what we call bundles.
How Bundling Lowers Your Premiums
When you buy something, obviously, the more of it you buy and the more you increase the volume, the lower the price will get. That’s because the company is getting a lot more from you, so they can lower the price of everything. And in auto insurance, it’s no different.
So try to find an insurer that writes homeowners, disability, health, as well as auto insurance, and have all those policies with one company. That way, you can get lower prices on everything.
The Problem Since Katrina
However, one of the problems we’ve had since Hurricane Katrina is that a lot of companies no longer write homeowner’s insurance south of I-12 or I-10. So when you talk to these folks, make sure to ask them if they write all these different types of insurance.
If they do not, it may be a good idea to get with an independent insurance agent and let them know what you’re trying to accomplish. They can then price it out with several different companies on a bundling basis to see who can give you the most attractive rate.
Now, I understand that nobody likes to pay for insurance. They think it’s a soccer bet. But it’s not a soccer bet when something catastrophic happens and you need it. So don’t the only factor in the price, but also look at what the coverage is.
For different prices, insurance companies may offer different kinds of coverage. Some may be better than others, and it just has to be a matter of what you’re willing to live with.
How The Right Deductible Can Lower Your Price
The second biggest factor, once you can bundle with a company, is to look at what your deductibles are. Insurance companies have this down to a science. They use actuaries or what we call bean counters to look at what the average claim is.
And whatever that amount may be, try to place your deductible at an amount that you’re willing to live with, should something happen.
Obviously, the higher the deductible, which is the amount that you pay in the event of a claim, the lower your premiums are going to be. That’s because the insurance company is going to shift the cost of the burden to you.
What I Did
So, for example, with my automobile insurance policy, I changed my deductible from $1,000 to $2,500. That lowered my premiums by $3,000 or $4,000 a year. So, if I don’t have a claim for one year, I’m already ahead.
And then, for each successive year, since I’ve been a good driver, knock on wood, those savings will continue to increase for me. Now I know that it’s different from person to person, and from family to family, so find out what you’re comfortable with. If you have any questions, just email me at [email protected]